Credit Suisse fined $77M for ‘China racket’

Credit Suisse agreed to pay $77 million in criminal and civil penalties to settle charges that it violated the Foreign Corrupt Practices Act in order to win business in Asia.

The Hong Kong-based subsidiary of the Swiss bank hired unqualified friends and family of Chinese government and industry officials to net at least $46 million in profits over a six-year scheme ended in 2013, the Justice Department said Thursday.

Credit Suisse agreed to a nonprosecution agreement with the Justice Department and to pay a $47 million criminal penalty.

A separate $30 million civil penalty payable to the Securities and Exchange Commission was also announced Thursday.

In one instance, Credit Suisse accelerated the hiring of the daughter of a high-ranking official at a stateowned enterprise to win a contract with the company, according to the Justice Department.

A banker cautioned “not too many interviews” when reviewing the applicant, noting that she was “a princess [who was] not used to too many rounds of interview [sic],” according to e-mails the Justice Department reviewed.

The applicant’s lackluster application required the handiwork of Credit Suisse employees to make it presentable, with employees needing “to be a bit ‘creative’ in filling” in details, according to the Justice Department.

The “princess” received several promotions during her five years at Credit Suisse and earned more than $1 million in compensation despite failing to attend a mandatory boot camp, bringing her mother to training events and leaving work early, the Justice Department said.

Credit Suisse said Thursday that it has implemented several compliance enhancements to its operations and that the settlement “represents no material impact” to the bank.