Deutsche Bank’s Japanese securities unit entertained officials from 45 funds that manage public pensions, according to a report obtained by Bloomberg News, signalling that the potentially illegal practice was more widespread than regulators had disclosed.
Deutsche Securities spent $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 the 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.
Probes into the spending triggered criminal proceedings against former Deutsche Securities salesman Shigeru Echigo, whose trial for bribing a pension official resumed in Tokyo today with the prosecution seeking a one-year prison term. Echigo reiterated his argument that the entertainment practices were widespread in the company. Regulators ordered the firm to improve internal controls in December, making it the first brokerage in Japan to be censured in the matter.
Takayuki Inoue, a Tokyo-based spokesman for Deutsche Securities, declined to comment. Kanari and Dandoy also declined to comment, Inoue said. 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.
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