Credit Suisse to Pay $77 Million to Settle Princeling Probes


• Bank hired more than 100 at request of government officials
•‘Princess’ got $1 million, although often didn’t show for work


Credit Suisse Group AG agreed to pay $77 million to settle U.S. bribery probes claiming the lender’s Hong Kong unit attempted to win banking business by offering jobs to friends and family of Chinese officials.

In a seven-year period, the bank hired more than 100 employees at the request of government officials in the Asia-Pacific region, resulting in millions of dollars of revenue, according to the U.S. Senior Credit Suisse managers tracked the success of these “relationship hires” with a spreadsheet that linked them to specific business deals for the firm.

One of the “princesses” allegedly got more than $1 million in compensation even though her colleagues complained she often didn’t show up and when she did she was rude and unprofessional.

“Bribery can take many forms, including granting employment to friends and relatives of government officials,” said Charles Cain, head of the SEC enforcement division’s anti-bribery unit. “Credit Suisse’s practice of engaging in these hiring practices violated the law, and it is now being held to account for having done so.”

Managers at the Hong Kong unit openly discussed how employing sons and daughters of important government figures would add to the bottom line even though they lacked the requisite skills. In 2008, the bank hired the nephew of a senior Chinese government official after a manager acknowledged “most likely he will not be good.”

JPMorgan Settles With U.S. Over ‘Quid Pro Quo’ Hires in Asia

The agreement won’t have any material impact on the lender, spokeswoman Nicole Sharpe said in an emailed statement. The bank has improved its hiring practices and is “committed to upholding the highest standards of integrity and fair business practices,” she said.

The bank agreed to pay a $47 million fine to the U.S. Justice Department and about $30 million to settle related civil allegations from the Securities and Exchange Commission.

“Credit Suisse Hong Kong’s practice of employing friends and family members of Chinese government officials as a quid pro quo for lucrative business opportunities was both profitable and corrupt,” Brooklyn U.S. Attorney Richard Donoghue said.

Credit Suisse is one of several global banks to have been investigated by U.S. authorities over their hiring practices in Asia. JPMorgan Chase & Co. agreed in 2016 to pay about $264 million to settle similar allegations. In that case, investigators described a systematic effort to curry favor with government officials and business executives.

Government investigators outlined several instances of the quid-pro-quo arrangements. In one email, a Credit Suisse employee told another that these hires “have to translate to $” or “the relationship is worthless to our organization.”

One intern that did make money for the bank was called a “princess” by an executive. She was the daughter of a high-ranking Chinese government official whose business the bank was trying to woo.

‘Creative’ Resume

The daughter had her resume drafted by Credit Suisse bankers who had to be a bit “creative” in filling in the details, according to the U.S. One banker warned others not to interview the prospect too many times since she was “a princess [who was] not used to too many rounds of interview.” She got the job.

After she started in July 2010, her colleagues complained about her unprofessional behavior, including bringing her mother to training events, missing mandatory meetings and leaving early. In one test, she received the worst grade in her class. According to an employee: “from the looks of her assessment she didn’t even try (she filled in a pattern of 5As in a row, 5 Bs in a row, etc. on the answer key).”

In 2011, a managing director was “at a complete loss as to what to write for” the princeling daughter’s evaluation. With a colleague, the two proposed feedback: “Pls come to the office more often — we would like to see more of your smiling face,” and, “Come to the office, answer your phone, don’t be rude…”

Despite her lack of performance, she was promoted several times because her family’s government connections landed the bank multiple deals. She was paid more than $1 million in compensation until being let go in May 2015.