Barclays PLC (BCS - Free Report) has been making progress in resolving legal issues. The U.K.-based bank has reached a settlement of charges levied related to hiring practices in the Asia-Pacific region by the U.S. Securities and Exchange Commission (“SEC”). The bank will pay $6.3 million for violating federal anti-bribery law, which included hiring of family and friends of foreign officials to get investment banking business.
Notably, the aforementioned civil settlement puts an end to the probe related to the bank’s hiring practices in regions including China, Hong Kong and South Korea.
Barclays has neither admitted nor denied the wrongdoings, however, agreed to pay $6.3 million, including civil fine worth $1.5 million and $4.8 million of disgorgement and interest. The bank’s spokesperson, Mark Lane, refrained from commenting on this matter.
Per the SEC, 117 people were appointed by Barclays between April 2009 and August 2013 having connections with government officials or non-government clients. Moreover, these people were hired for the bank’s permanent jobs, graduate program, formal internship program or an unofficial "work experience program."
The bank was alleged for lack of internal controls relating to employees’ involvement in bribery associated with these "relationship hires", and some employees were held responsible for manipulating records and hiding information.
Global banks’ hiring practices in Asia have been under regulatory scrutiny for quite some time. These banks are being investigated for employing family members of influential officials in order to obtain business. These hiring practices violated the Foreign Corrupt Practices Act of 1977.
JPMorgan (JPM - Free Report) was the first major bank to disclose a probe over such matter in August 2013. In November, the same year, the investigation got extended to Morgan Stanley (MS - Free Report) and Citigroup (C - Free Report) on similar grounds. Notably, in November 2016, JPMorgan also agreed to pay $264 million as settlement of the U.S. regulatory charges related to its hiring practices in China, known as the Sons and Daughters program.
Currently, Barclays carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Barclays have lost around 11.3% on the NYSE, in the last six months, compared with the industry’s decline of 7.9%.
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