Shawn M. Wright, Mayling C. Blanco, and Richard L.A. Wolf
On February 14, 2018, another major financial institution disclosed that it is under investigation for possible violations of the Foreign Corrupt Practices Act (“FCPA”). This disclosure comes at a time when the Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) continue to scrutinize the hiring practices of financial institutions in and with respect to their Asian markets.
Investigations of Financial Institutions Operating in Asia
In its earnings statement, the financial institution announced that the DOJ and the SEC are investigating its “hiring practices in the Asia Pacific region and, in particular, whether [it] hired referrals from government agencies and other state-owned entities in exchange for investment banking business and/or regulatory approvals” in violation of the FCPA.1 In November 2016, a similar financial institution and its Hong Kong-based subsidiary agreed to pay the SEC, the DOJ, and the Federal Reserve Board $264 million to settle charges that it violated the FCPA by hiring unqualified employees referred by government officials, particularly those with connections to upcoming transactions.2 Other financial institutions have been investigated for similar practices in the region.3 Continue reading “Financial Institutions’ Hiring Practices under the Microscope: The Importance of Anti-Corruption Programs”