Bank of New York Mellon Corp. (BNY Mellon) will pay $14.8 million to settle Foreign Corrupt Practices Act (FCPA) charges that allege the bank gave internships to family members of influential foreign government officials. The U.S. Securities and Exchange Commission alleged that BNY Mellon violated the FCPA in 2010 and 2011 when BNY Mellon employees “sought to corruptly influence foreign officials in order to retain and win business managing and servicing the assets of a Middle Eastern sovereign wealth fund.”
The SEC’s investigation discovered that fund officials requested BNY Mellon provide their family members with highly competitive internships. BNY Mellon provided internships to at least three family members, despite those candidates not meeting the typically rigorous hiring standards for the positions. BNY Mellon employees hired the interns without evaluating them through existing programs and procedures in an effort to maintain the fund’s business. Andrew J. Ceresney, director of the SEC’s Enforcement Division, said in a statement:
The FCPA prohibits companies from improperly influencing foreign officials with ‘anything of value,’ and therefore cash payments, gifts, internships or anything else used in corrupt attempts to win business can expose companies to an SEC enforcement action. BNY Mellon deserved significant sanction for providing valuable student internships to family members of foreign officials to influence their actions.
I have to wonder how much of this sort of thing goes on in the corporate world on a regular and recurring basis. Based on reports, it appears that it’s widespread. We know from our litigation experiences that some of the corporate bosses need a refresher course in business ethics. In fact, it appears some never even took the first course on that subject.
Source: Law 360
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