Deutsche Bank Japan, SEC Whistleblower, Italy: Compliance 

Deutsche Bank AG’s Japanese securities unit entertained officials from 45 funds that manage public pensions, according to a report obtained by Bloomberg News, signaling that the potentially illegal practice was more widespread than regulators disclosed.

Deutsche Securities Inc. spent 22.1 million yen ($217,000) wining and dining fund officials from 2010 to 2012, according to the document prepared by the investigative arm of Japan’s financial regulator and Germany’s biggest bank. Deutsche Securities Chief Operating Officer Bret Dandoy approved expenses for two overseas trips, and Chairman Norimichi Kanari joined in the entertaining on one occasion, the report showed.

A spokesman for Deutsche Securities, said the bank, Kanari and Dandoy all declined to comment. Neither executive has been accused of any wrongdoing.

Japanese criminal law prohibits companies from providing benefits to public servants with the intention of obtaining business from them. Company officials who oversee public retirement funds as part of their assets under management are defined as civil servants.

Compliance Action

SEC Sanctions Fund Adviser for Whistle-Blower Retaliation

Paradigm Capital Management Inc. made prohibited trades and retaliated against the firm’s head trader for reporting the violations, U.S. regulators said.

The hedge fund advisory firm, based in Albany, New York, and its owner, Candace King Weir, agreed to pay $2.2 million to settle Securities and Exchange Commission claims, the agency said in an administrative order filed June 16. Weir and the firm settled the claims without admitting or denying wrongdoing.

The case marks the first time the SEC has brought an enforcement action for retaliation against a whistle-blower since the agency set up the program in 2011 to reward people who report securities violations. The 2010 Dodd-Frank Act gave the agency the authority to pay whistle-blowers and punish retaliation against them.

Chris Kittredge, a spokesman for Paradigm and Weir, said the firm and its owner “are pleased to resolve this matter.”

Hong Kong Probes Firms for Money Laundering, Newspaper Says

Hong Kong’s banking regulator is investigating several financial institutions, including at least one bank, for possible breaches of the city’s anti-money-laundering regulation, the South China Morning Post reported.

One bank has been questioned about its money-laundering controls, the newspaper reported, citing someone it didn’t identify.

The Hong Kong Monetary Authority isn’t conducting investigations into money laundering, which is under the ambit of law enforcement agencies, it said in an e-mailed response to questions from Bloomberg News.

The checks on financial institutions, which follow the implementation of a money-laundering law in 2012, are to identify possible breaches concerning customer due diligence and record keeping, it said.

Regulators from Hong Kong to the U.S. are stepping up efforts to catch risk-management failures at banks. The Monetary Authority said last year that it would double its team of specialists, which mainly comprises examiners for carrying out on-site checks at banks, to 22 people.

Interviews/Commentary

Crackdown on Corruption Is Priority for Italy, Padoan Says

A “crackdown on illegality, corruption, inefficient use of public resources and tax evasion is at the center of government action,” said Italian Finance Minister Pier Carlo Padoan, who spoke at an event near Rome yesterday.

Tax evasion has an impact on the economy, Padoan said. The Renzi government is committed to improving and simplifying the tax system to attract foreign investment, he said. The high tax burden is one reason for widespread tax evasion, according to Padoan.

 

Source: bloomberg

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