Last August, the SEC reached an agreement with BNY Mellon wherein the bank paid $14.8 million to settle charges that the company violated the Foreign Corrupt Practices Act (FCPA) by hiring unqualified interns in exchange for continued access to an unnamed “Middle Eastern Sovereign Wealth Fund.”
Not only was the sovereign wealth fund involved in the corruption not named, neither where the two officials who asked for jobs for their relatives. In the settlement the people are only referred to as “Official X” and “Official Y.” The relatives who benefited from the corruption also go unnamed as “Intern A,” ‘Intern B,” and “Intern C.”
Why is the SEC protecting people who broke American law? Was keeping the names of the guilty a secret a condition of BNY Mellon agreeing to settle?
Though the SEC never named names, it did provide a lot of clues as to who the criminal parties might be, including which locations of BNY Mellon employed the interns and for how long.
Interns A and B worked at BNY Mellon’s Boston location from August 2010 to February 2011, and were hired at behest of Official X, while Intern C worked at the London location from July 2010 to December 2010, and was hired at behest of Official Y.
Official X is said to have served as the contact for a 2009 deal between the mysterious sovereign wealth fund and BNY Mellon Asset Management that led to BNY Mellon managing assets of $711 million. His son and nephew were hired as interns for BNY Mellon’s Boston office.
The deal for which Official X was the contact is titled the “Boutique Mandate” in the settlement documents and expanded a financial relationship between the bank and the sovereign wealth fund that was formed before the 2007 BNY Mellon merger in 2000. It is not clear whether it was the Bank of New York or Mellon Financial that had the relationship going back to 2000.
Official Y is cited as working in the European Office of the sovereign wealth fund, which was the office that originally set up the asset servicing agreement in 2000. His son, Intern C, interned at BNY Mellon’s London office.
The SEC reported that during the time that BNY Mellon was employing the interns, the bank was managing $55 billion worth of assets for the “Middle Eastern Sovereign Wealth Fund.”
But the question remains, why is the SEC not disclosing the names of the organization, individuals, and beneficiaries of an act the agency claims was a crime?