Deutsche Bank’s Japanese securities unit will cut pay for five senior executives and increase compliance staff after regulators penalized the firm for excessive spending on entertaining pension fund officials.
Bloomberg reports that Japan’s Financial Services Agency ordered Deutsche Securities to improve operations for providing special benefits to the pension clients, the regulator said in a statement in Tokyo.
The brokerage’s CEO Makoto Kuwahara will receive a 20% pay cut for six months, the firm said in a statement.
Deutsche Securities becomes the first brokerage to be penalized in Japan for breaching rules on client entertainment after the regulator found it spent $61,300 on officials at three pension funds. The order comes a week after an employee at the firm was arrested on suspicion of bribing a manager of Mitsui’s retirement fund.
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