, Japan

Japan investigating Deutsche Bank for alleged financial misdeed

Deutsche provided excessive entertainment to Japanese pension fund executives.

Japan's Securities and Exchange Surveillance Commission (SESC), the securities market watchdog, is said to have found evidence of potential infractions during a regular audit of Deutsche Securities, the German bank's investment banking arm in Tokyo, according to informed sources.

Deutsche employees’ reporting large expenses for entertainment involving pension fund executives raised red flags at the SESC because pension fund executives involved are legally considered public employees covered by anti-bribery statutes since they handle part of the national pension scheme.

Deutsche had already started its own investigation into the matter before the SESC began its audit in May. Its efforts to address the problem could be a mitigating factor when the SESC makes a decision in coming weeks on what action to take.

It is possible SESC will not pursue public sanctions that could range from an order to improve compliance to harsher penalties.

Details of the alleged expenses, including the amounts spent and the identities of the pension fund executives, were not immediately available. SESC is also checking the entertainment of pension fund clients in a regular inspection at Goldman Sachs that began last month.
 

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