Deutsche Bank in Japan probe for 'entertaining' pension clients
TOKYO (REUTERS) - Japan's securities market watchdog is investigating whether Deutsche Bank AG employees provided excessive entertainment to Japanese pension fund executives in breach of regulations, sources with knowledge of the matter said.
The Securities and Exchange Surveillance Commission (SESC) found evidence of potential infractions during a regular audit of Deutsche Securities Inc, the German bank's investment banking arm in Tokyo, said the sources, who spoke on condition they not be identified because the investigation is ongoing.
The employees had booked large expenses for entertainment involving pension fund executives, they said. This raised red flags for the regulators because the pension fund executives involved are legally considered public employees, subject to 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, and has stopped marketing directly to such pension funds as part of a review of its sales and compliance practices, sources said.