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May 2 — The Securities and Exchange Commission is continuing to scrutinize companies' hiring practices in the wake of the agency's first-ever Foreign Corrupt Practices Act enforcement cases involving the hiring of interns, a senior SEC official said.
Kara Brockmeyer, chief of the SEC enforcement division's FCPA unit, said May 2 in New York that her agency's first enforcement cases involving the hiring of interns in alleged efforts to advance commercial interests by Bank of New York Mellon Corp. and Qualcomm Inc. signaled a trend that will continue.
“There's a few more cases that I think will be coming down the pipeline in that area,” Brockmeyer told a Practising Law Institute conference.
The FCPA prohibits companies from improperly influencing foreign officials with anything of value.
In the Bank of New York Mellon case, the SEC alleged that the financial institution provided three student internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund (160 SLD, 8/19/15). The bank agreed to pay $14.8 million to resolve the case without admitting or denying misconduct. The case was the SEC's first FCPA action involving internships as well as its first FCPA case against a financial institution.Qualcomm, in turn, provided jobs for children of Chinese government officials, describing the hires internally as “must place” or “special” candidates, the SEC contended (41 SLD, 3/2/16). The company agreed to pay $7.5 million to resolve the allegations without admitting or denying wrongdoing.
Steptoe & Johnson partner and conference speaker Lucinda Low agreed the SEC is looking at intern hiring with more scrutiny compared with the past and advised companies to be mindful of fully implementing any internal policies regarding intern hiring. “The [enforcement] tools were really the internal controls provisions of the FCPA,” she said.
Andrew Ceresney, SEC Enforcement Division director, said in December that the agency was broadening its interpretation of the statute to better capture “less traditional” items of value (226 SLD, 11/24/15).
The SEC's enforcement division has been active bringing FCPA actions: in fiscal 2015 the agency launched about 14 cases and in fiscal 2016, which began Oct. 1, the agency has already brought 12 cases, Brockmeyer said.
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