The bank agreed to pay a $14.8 million penalty to settle charges that it violated anti-bribery and internal accounting controls provisions of the Foreign Corrupt Practices Act in 2010 and 2011.
According to the SEC ORder, BNY Mellon gave internships in Europe to the son and nephew of one unnamed government official and to the son of another unnamed official. The Middle Eastern country of the sovereign wealth fund was not named by the SEC.
The SEC alleged that the bank gave the internships to the kids because they “sought to corruptly influence foreign officials in order to retain and win business managing and servicing the assets of a Middle Eastern sovereign wealth fund.”
In its order, the SEC published emails purporting to show the importance of the internships being granted:
- An account manager wrote in a February 2010 e-mail concerning the internship request for Interns A and B that BNY Mellon was “not in a position to reject the request from a commercial point of view” even though it was a “personal request” from Official X. The employee stated: “by not allowing the internships to take place, we potentially jeopardize our mandate with [the Middle Eastern Sovereign Wealth Fund].”
- In June 2010, an employee of BNY Mellon with primary responsibility for the Asset Management relationship with the Middle Eastern Sovereign Wealth Fund wrote of the internships for Interns A and B: “I want more money for this. I expect more for this. . . . We’re doing [Official X] a favor.”
- In a separate e-mail to a different BNY Mellon colleague, the same employee stated “I am working on an expensive favor for [Official X] an internship for his son and cousin (don’t mention to him as this is not official).”
- The same employee advised a colleague in human resources: “[W]e have to be careful about this. This is more of a personal request . . . [Official X] doesn’t want [the Middle Eastern Sovereign Wealth Fund] to know about it.” The same employee later directed his administrative assistant to refrain from sending e-mail correspondence concerning Official X’s internship request “because it was a personal favor.”
The three boys allegedly got internships without any meetings or interviews. They also “did not meet these rigorous criteria” and didn’t have “the requisite academic or professional credentials” for the internships, the SEC said.
According to the SEC, the interns were “less than exemplary employees.” The SEC claimed that the son and nephew of the first official missed work frequently. The third intern, the son of the other official, was described by his manager as “okay” and not as hardworking as he would have hoped.
Jeffrey Newman represents whistleblowers