In the Matter of The Bank of New York Mellon Corporation (2015)
Case Details
- Case Name
- In the Matter of The Bank of New York Mellon Corporation (2015)
- Foreign Official
- Officials from a sovereign wealth fund recognized as a governmental body of an unnamed Middle Eastern country.
- Date of Conduct
-
2010 to 2011
- Nature of Business
- The Bank of New York Mellon is a New York-based corporation whose common stock is registered under Section 12(b) of the Exchange Act and listed on the New York Stock Exchange. BNYM and its various subsidiaries provide banking and financial services, including asset and wealth management services, in North America and elsewhere around the globe, including Europe, the Middle East, and Africa.
- Influence to be Obtained
- According to the SEC, a Middle East sovereign wealth fund, which is responsible for management and administration of assets of an unnamed Middle Eastern country, was a client of BNYM in various capacities since 2000. Between 2000 and 2011, BNYM allegedly held approximately $55 billion of the Fund’s assets. According to the SEC, in 2010 two unnamed officials of the Fund requested that BNYM provide internships to three relatives.
One official, who had authority over allocations of new assets, allegedly requested that BNYM provide internships for his son and nephew and that the request served as an “opportunity” for BNYM. According to the SEC, emails from unnamed BNYM employees indicated that they understood that providing the internships was necessary to retain and obtain business from the Fund. After granting internships to the son and nephew, BNYM allegedly obtained additional assets from the Fund. The second official, a senior official in the European office of the Fund, also allegedly requested an internship for his son in 2010. The SEC asserts that at the time of this request, a number of client service issues threatened to weaken BNYM’s relationship with the Fund’s European office. According to the SEC, a BNYM manager indicated concerns that another competitor would hire the second official’s son and that BNYM would lose market share. The SEC claims that after hiring the second official’s son, BNYM retained, and was able to further develop, its existing business relationships with the European office of the Fund.
The SEC claims that while BNYM had established rigorous criteria and processes for hiring interns, the interns hired at the request of the officials did not meet the basic academic or professional requirements for the existing internship programs. The SEC alleges that BNYM agreed to hire the interns before meeting or interviewing them and that BNYM provided a “customized one-of-a-kind training program.” According to the SEC, the interns were offered six-month long internships, which is significantly longer than typical BNYM internships, and BNYM assisted the three interns to obtain visas. According to the SEC, BNYM management indicated that the internships constituted an “expensive favor” for the officials given the amount of resources expended for these customized internships.
- Enforcement
- On August 18, 2015, the SEC settled its enforcement action against BNYM for violating of the anti-bribery and internal controls provisions of the FCPA. As a result, BNYM agreed to pay $8.3 million in disgorgement, $1.5 million in prejudgment interest, and a $5 million civil penalty—totaling $14.8 million in sanctions.
- Amount of the Value
- Not Stated
- Amount of Business Related to Payment
- Not Stated
- Citizenship of Parent Entity
- United States
- Total Sanction
- $ 14,800,000
- Reporting Requirements
- No
- Total Combined Monetary Sanction
- $ 14,800,000
Defendants
The Bank of New York Mellon Corporation
- Citation
- In the Matter of The Bank of New York Mellon Corp., Admin. Proc. File No. 3-16762 (Aug. 18, 2015).
- Other Statutory Provision
- None
- Disposition
- Cease-and-Desist Order
- Defendant Jurisdictional Basis
- Issuer
- Defendant's Citizenship
- United States
