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Large Bank Hired Unqualified, Connected Interns to Secure Foreign Government Business


A large international bank agreed to pay over $16 Million in disgorgement, fines and penalties for hiring unqualified interns associated with foreign government officials in order to secure business.  The SEC asserts that the respondent violated its own policies and procedures and created false books and records to conceal corrupt transactions in violation of the Exchange Act’s books and records requirements.  The interns bypassed the bank’s “highly competitive and merit-based hiring process” and were often assigned to the very deals where a relative could steer business.  The SEC charges the bank with violating the Foreign Corrupt Practices Act over an 8-year period.

It’s never good to violate your own policies and procedures as it shows knowledge of the regulations and (at least) negligence in failing to enforce the policies.  Firms that do business overseas must create and implement procedures to ensure compliance with the FCPA.