Without admitting guilt or denying charges it was involved in a scheme to grant student internships to the relatives of families associated with a Middle Eastern, state-owned investment fund, Bank of New York Mellon agreed Tuesday to pay $14.8 million in penalties for violating the Foreign Corrupt Practices Act.
The sovereign wealth fund involved was not named in the Securities and Exchange Commission (SEC) administrative order.
“The BNY Mellon case is also the first foreign bribery enforcement action in which internships, as opposed to cash, constituted the alleged bribe. BNY Mellon deserved significant sanction for providing valuable student internships to family members of foreign officials to influence their actions,” Andrew Ceresney, the SEC’s director of enforcement, said in a statement.
The SEC’s inquiry into BNY Mellon’s hiring practices dates back to 2010 when the banking giant deliberately avoided fixed engagement procedures and hired several relatives of foreign officials affiliated with the Middle Eastern investment fund.
Alternatively, BNY Mellon undertook an avenue to influence or reward the families of those with ties to the wealth fund as a safeguard for its substantial business alliance. The unnamed fund has assets in excess of $50 billion with BYN Mellon.
One unnamed BNY Mellon employee described the revelations as an “expensive favor;” another stated: “Silly things like this help influence who ends up with more assets/retaining dominant position.”
According to the SEC, BNY Mellon, along with JP Morgan Chase, Goldman Sachs Group and Deutsche Bank AG, were marked in the probe for similar infractions to the Foreign Corrupt Practices Act. To date, BNY Mellon remains the only firm in violation of federal directive.
One must negotiate the first fence.
Nevertheless, it turns out the three hired for these coveted positions all turned out to be slothful. Perhaps, given their lethargic performance, the interns hired by BNY Mellon will forever remain on the bottom-most wrung of their chosen profession.
Hiring through objective evaluations rooted in principle and tempered by common sense has transformed into une affaire de famille gone awry.
[Reuters] [Photo courtesy Diariobitcoin.com]