Bank of New York Mellon Corp. will pay $14.8 million to settle a U.S. regulator’s claims that it broke anti-bribery laws in awarding internships to family members of officials with ties to a Middle Eastern sovereign wealth fund.
The bank hired sons of two officials and a nephew of one of them without adhering to its own standards for evaluating candidates, the U.S. Securities and Exchange Commission said Tuesday. The internships were offered as a way to win contracts for servicing assets of the sovereign wealth fund, the SEC said in a complaint outlining its administrative proceeding.
The Foreign Corrupt Practices Act “prohibits companies from improperly influencing foreign officials with ‘anything of value,’” Andrew Ceresney, director of the SEC’s enforcement division, said in the agency’s statement. “BNY Mellon deserved significant sanction for providing valuable student internships to family members of foreign officials to influence their actions.”
One of the government officials described his internship request as an “opportunity” for BNY Mellon and became angry when the bank delayed offers, according to the SEC complaint. The interns were “less than exemplary employees” and were confronted by human resources concerning repeated absences from work, but were retained to influence the government officials.
“We are pleased to reach an agreement with the SEC that allows us to put this matter behind us,” Kevin Heine, a BNY spokesman, said in a statement.
The SEC has made enforcing anti-bribery laws a priority. The agency is pursing high-profile cases, including allegations of favoritism for children of Chinese officials at JPMorgan Chase & Co. and deals in Africa involving Och-Ziff Capital Management Group.