Bank Of New York Mellon Sorry For Giving Out Internships To Relatives Of Foreign Officials, And Not Just Because They Turned Out To Be "Less-Than-Exemplary Workers"

The violation of the Foreign Corrupt Practices Act hurts too.
Author:
Updated:
Original:

Oh sure, the fact that the bank could've left the positions vacant and gotten the same productivity out of a bunch of empty chairs as the kids it hired was probably slightly annoying. More irritating, in retrospect, is that giving internships to individuals who just happened to be connected to higher-ups at a Middle Eastern sovereign wealth fund is now being viewed as bribery, for which BNY has agreed to fork over $14.8 million.

The settlement by the U.S. Securities and Exchange Commission marked the first time regulators had charged a bank for violating the Foreign Corrupt Practices Act, which prohibits paying bribes to foreign officials. It followed a 2011 industrywide sweep, undertaken as part of a broader foreign bribery probe, in which the SEC sought information about financial institutions' business dealings with state-owned investment funds. The BNY Mellon case is also the first foreign bribery enforcement action in which internships, as opposed to cash, constituted the alleged bribe, SEC enforcement director Andrew Ceresney said.

Bribes aside, the whole thing was a pretty nice way for the kiddies to do some résumé-building with minimal effort!

The SEC said the bank did not choose the interns through its usual, highly competitive hiring process. Instead, BNY Mellon sought to corruptly win or keep asset management and service business from the fund, a client since 2000 with about $55 billion at the bank, the SEC said. One BNY Mellon employee called hiring the interns an "expensive 'favor'" in an email. Another said "silly things like this help influence who ends up with more assets/retaining dominant position." The interns came across as less-than-exemplary workers, the SEC said, with bank employees complaining that two were absent repeatedly and a third "wasn't actually as hardworking" as hoped.

In fairness to the BNY hired-as-a-bribe 'terns, their minimal output was nowhere near as impressive as that of a counterpart at JP Morgan, the son of China’s commerce minister, who was described by MDs as "the worst BA candidate they had ever seen" and "accidentally sent a sexually explicit email to a human-resources employee," but was still offered a gig.*

Anyway, in addition to the fine, BNY has promised to get a lot more hardcore "with respect to [its] internship and hiring practices."

BNY Mellon to pay $14.8 million to settle intern bribery probe [Reuters]

Related: Wait, Is It Not Typical Of JPMorgan To Hire People People Who Send “Sexually Explicit Emails” To HR And Are Described As “The Worst…Candidate Ever”?

*J.P. Morgan has not been accused of wrongdoing!

Related

By VariousThe source code of this SVG is valid.This vector image was created with a text editor. (File:Flag of Libya (1951).svg) [Public domain], via Wikimedia Commons

In The Future, Och-Ziff Capital Management Will Think Twice About Bribing Foreign Officials

Which would be a marked departure from the hedge fund's previous way of doing business.

What Is The Point Of Even Having Interns?

BNY Mellon, JP Morgan, and a bunch of other banks know what we're talking about.

One should be plenty, thanks. Joe Mabel [CC BY-SA 3.0], via Wikimedia Commons

BNY Mellon Downsizing In Advance Of Move To Disused Phone Booth In Jersey City

It took just four years for the custody giant to out-shrink its new digs.