January 27, 2015 / 7:19 PM / 4 years ago

BNY Mellon may face bribery charges over sovereign wealth funds: filing

(Reuters) - Bank of New York Mellon Corp (BK.N) has disclosed in a filing that U.S. regulators are considering charging it with violating U.S. foreign bribery laws after an investigation into internships it gave to relatives of sovereign wealth fund officials.

A BNY Mellon sign is seen on their headquarters in New York's financial district, January 19, 2011. REUTERS/Brendan McDermid

In a regulatory filing on Friday, BNY Mellon said that U.S. Securities and Exchange Commission staff had notified it that they would recommend the SEC charge the bank over alleged violations of the Foreign Corrupt Practices Act.

A case from the SEC would be the first to come from a long-running investigation into banks’ dealings with sovereign wealth funds.

BNY Mellon said the so-called Wells notice came after SEC staff provided a similar notice in the third quarter of 2014 to some current and former employees about possible charges.

A Wells notice indicates the SEC believes civil charges may be warranted and gives a recipient a chance to mount a defense.

BNY Mellon said the employees’ Wells notice indicated the SEC was considering charges in connection with the internships. The bank received a similar notice in the fourth quarter, it said.

The bank said it is cooperating with the investigation and did not believe the outcome of the investigation will materially affect its business or finances.

It is unclear which sovereign wealth funds are at issue or which employees could face charges.

A spokesman for BNY Mellon declined to comment Tuesday beyond the disclosure filing, and representatives of the SEC did not respond to requests for comment.

The SEC had in 2011 sent letters to several financial institutions asking for information about their business with state-owned investment funds as part of a foreign bribery probe.

U.S. authorities have also undertaken investigations in recent years into banks’ overseas hiring practices and whether they violate the FCPA.

Other banks that have disclosed FCPA investigations related to their hiring practices include Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Deutsche Bank AG (DBKGn.DE).

Goldman Sachs and Deutsche Bank declined to comment Tuesday, while a JPMorgan spokeswoman did not respond to a request for comment.

Reporting by Nate Raymond in New York and Aruna Viswanatha in Washington, D.C.; Editing by Alan Crosby

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