HSBC: SEC investigating Asia hiring practices
Wednesday, February 24, 2016 at 10:28AM
Richard L. Cassin in BNY Mellon, Citigroup, Credit Suisse, Goldman Sachs, HSBC Holdings Plc, Hiring, JPMorgan, Morgan Stanley, UBS AG

HSBC Holdings said in an earnings release Monday that the SEC is investigating the bank's hiring practices in Asia.

London-based HSBC said it has received various requests for information and is cooperating with the SEC’s investigation.

HSBC said the investigation relates to "hiring practices of candidates referred by or related to government officials or employees of state-owned enterprises in Asia-Pacific."

Hiring a family member or friend of a government official isn't always a violation of the FCPA. But a hiring decision intended to reward or induce an official to award work can be an offense.

HSBC said the SEC is investigating hiring practices "at multiple financial institutions, including HSBC."

In August last year, BNY Mellon paid $14.8 million to settle SEC charges that its hiring practices violated the Foreign Corrupt Practices Act. The SEC said the bank provided valuable student internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund.

Without admitting or denying the SEC's findings, BNY Mellon agreed to pay $8.3 million in disgorgement, $1.5 million in prejudgment interest, and a $5 million penalty.

In March last year, the SEC reportedly sent letters to five banks asking for details about their hiring practices in Asia. The banks were Credit Suisse, Goldman Sachs, Morgan Stanley, Citigroup, and UBS.

The DOJ and SEC are also investigating whether hiring decisions at JPMorgan were made to win business from Chinese companies in violation of the FCPA, according to reports.

HSBC said Monday it cannot predict "the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant."

HSBC Holdings plc trades on the NYSE under the symbol HSBC.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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