Large Multinational Financial Services Company Settles FCPA Charges Relating to Internships

Settlement Asia BNY Mellon

On Tuesday, August 18, the SEC announced a settlement with a large multinational financial services company over allegations that the company had violated the FCPA by giving internships to family members of government officials working at a Middle Eastern sovereign wealth fund in hopes of retaining or gaining more business from that fund.  The order entered as part of the settlement quoted emails between company employees purportedly demonstrating that the company gave the internships in hopes of keeping and growing the business relationship with the fund.  The SEC also alleged that the company gave the internships to the family members without requiring that they pass through the competitive screening process the company typically requires for interns.  Finally, the SEC alleged that the company had inadequate controls to prevent the improper hiring of relatives of government officials.  The company paid $14.8 million to settle the charges, with $8.3 million in disgorgement, $1.5 million in pre-judgment interest, and a $5 million penalty. The company previously disclosed in January 2015 that it had received a Wells Notice concerning possible FCPA violations in connection with the internships.  The settlement follows earlier press reports of a broad SEC investigation into bank hiring practices in Asia, and appears to be the first settlement resulting from the investigation.