DEEP BLUE GROUP MADRID AND TOKYO BANK FRAUD PROBE, JAPAN REGULATOR PROBING

DEUTSCHE BANK ENTERTAINMENT OF PENSION

CLIENTS: SOURCES

Source :

http://www.reuters.com/article/2013/09/11/

us-deutsche-japan-probe-idUSBRE98A0BJ2

0130911

(Reuters) - Japan's securities market

watchdog is investigating whether Deutsche

Bank AG (DBKGn.DE) employees provided

excessive entertainment to Japanese pension

fund executives in breach of regulations,

sources with knowledge of the matter said.

The bank's 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 the regulator will not pursue public

sanctions, which could range from an order to

improve compliance to harsher penalties, the

sources said.

Given the risk of regulatory and criminal sanctions,

companies should in principle never pick up the tab for

a public official, said Tomoki Debari, a partner at

Anderson Mori & Tomotsune and expert on Japan's anti-

bribery laws. Debari was asked about the law in

general terms without being aware of the names of the

companies involved.

It marked the first time the SESC had sought to

punish a company for excessive entertainment. Based

on that recommendation the Kanto Local Finance

Bureau ordered KTOs to shut down for three months.

In the KTOs case, the SESC invoked a provision in the

financial instruments law that prohibits companies

from providing "special benefits" to clients in

connection with the forging of business contracts. The

"special benefits" can include entertainment that is

considered beyond social norms.