Yesterday, August 18, 2015, the Securities and Exchange Commission (SEC) announced that it had reached a settlement agreement with Bank of New York Mellon (BNY Mellon). The two parties settled charges related to Foreign Corrupt Practices Act (FCPA) violations. The SEC alleged that the bank violated domestic anti-bribery laws by providing internships to family members of foreign government officials associated with a Middle Eastern sovereign wealth fund.
In its investigation, the SEC found that BNY Mellon did not vet the interns through the company’s typical intern hiring process and qualification standards. The bank will pay $14.8 million to settle the charges. In a statement, Director of the SEC’s Enforcement Division, Andrew Ceresney said, “BNY Mellon deserved significant sanction for providing valuable student internships to family members of foreign officials to influence their actions.” The investigation and settlement illustrate the scrutiny banks face when trying to gain access to international business outside of the boundaries of the FCPA. “Financial services providers face unique corruption risks when seeking to win business in international markets, and we will continue to scrutinize industries that have not been vigilant about complying with the FCPA,” said Kara Brockmeyer, Head of the Enforcement Division’s FCPA Unit.
SEC Press Release: