Deutsche Bank will pay $122 million to settle federal charges that it conducted a multiyear practice of bribing people in several countries to try to win business, including Saudi Arabia, Abu Dhabi, Italy and China.
The agreement announced Friday allows Deutsche Bank to avoid criminal charges sought by the Justice Department and settles civil charges brought the Securities and Exchange Commission. Deutsche Bank will disgorge $35 million and pay $8 million in interest to settle the SEC charges.
Civil charges were waived because the bank also paid $79 million to settle the criminal charges. The bank entered a deferred prosecution agreement with the Department of Justice that acknowledges responsibility for criminal conduct.
The SEC charged Deutsche Bank with violating the Foreign Corrupt Practices Act by engaging foreign officials and their relatives and associates as third-party intermediaries to get business.
Part of the SEC complaint focused on insufficient internal accounting controls that resulted in $7 million in bribe payments for undocumented or unauthorized services that were falsely recorded as legitimate business expenses by Deutsche Bank employees.
"While third parties can assist in legitimate business development activities, it is critical that companies have sufficient internal accounting controls in place to prevent payments to third parties in furtherance of improper purposes," said Charles Cain, chief of the SEC enforcement division's FCPA unit in a statement announcing the SEC order.
The SEC said the bank improperly used hundreds of business development consultants and other finders from at least 2009 through 2016, and that the practices were approved by past members of Deutsche Bank's senior management and regional committees.
Deutsche Bank spokesman Dan Hunter said in an emailed statement that since then, Deutsche Bank has invested in technology, controls and other measures and expanded its global anti-financial crime team.
"While we cannot comment on the specifics of the resolutions, we take responsibility for these past actions, which took place between 2008 and 2017," the statement said. "Our thorough internal investigations, and full cooperation with the DOJ and SEC investigations of these matters, reflect our transparency and determination to put these matters firmly in the past. As recognized in the resolutions, we have taken significant remedial actions in response to these issues."
