Banking Industry FCPA Fraud

These FCPA violations can take a different form compared to other industries.   Rather than bribing officials to influence a contract award, financial institutions will instead create practices that allow for the unfair hiring of  relatives and friends of foreign officials in an effort to win business, strictly violating the FCPA.

For example, in 2016, JPMorgan agreed to pay $264 million in sanctions as a result of the firm’s hiring practices. In this case, the hiring program at JPMorgan’s Hong Kong-based subsidiary called the “Sons and Daughters Program,” would bypass the normal hiring process when the job candidates were referred by client executives and influential government officials. The investigation found that 100 candidates during a seven-year period were handed well-paying positions at the request of foreign government officials in exchange for business deals that totaled $100 million in revenues to JPMorgan.

In a more recent case, Deutsche Bank AG paid more than $16 million after the SEC found that the bank had hired relatives of foreign government officials in both the Asia-Pacific region and Russia to gain investment business deals. Deutsche Bank would not only falsify their books and records to hide their illegal hiring practices, but would also falsify some of the qualifications and abilities of the referral hires.

FCPA violations are not limited to a financial institution’s hiring practices. Another violation involves business with sovereign wealth funds (SWFs), employees of which are considered foreign officials under the FCPA. In 2016 Och-Ziff Capital Management agreed to pay $412.1 million for paying bribes of more than $3 million to Libyan government officials in order to secure a $300 million investment by the Libyan Investment Authority (Libya’s SWF).

These hiring practices and bribery schemes committed by international financial institutions create an unfair and unethical playing field, making it difficult for qualified individuals and businesses to compete.  Whistleblowers can play a critical role in maintaining the proper compliance of corrupt financial institutions while protecting consumers, businesses, and capable job candidates.

The majority of whistleblowers are current or former employees of the company committing the violation. Other whistleblowers are individuals who have been harmed by the fraud committed by the defendant, professionals who work in the same industry as the defendant, or individuals who have personal relationships with the defendants.

It is important for these types of people to know they can help stop fraud committed against the government and taxpayers. Whistleblowers can also receive a portion of the recovery. It is recommended that whistleblowers seek the guidance of an attorney in these situations. A whistleblower attorney will be able to help you file your case and help protect your rights.

Our Team

With over 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of an FCPA violation.

Please call (866) 845-2164 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower.  Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.