SEC Probes Financial Firms on Possible Sovereign Fund Bribes

[ProSense]

Source: Bloomberg

The U.S. Securities and Exchange Commission started a broad investigation involving several financial firms to determine whether they made improper payments to secure investments from sovereign wealth funds, according to three people with direct knowledge of the matter.

The sweep in part focuses on whether banks, hedge funds and private equity firms paid placement agents to win access to the state-owned money, said the people, who declined to be identified because the investigation isn’t public. An agent working with a sovereign wealth fund may be considered a government official, making interactions with that person subject to the Foreign Corrupt Practices Act.

Financial institutions received letters of inquiry from the SEC within the past 10 days, one of the people said. Blackstone Group LP, the world’s largest private-equity firm, was among the companies that received the letter, a person with direct knowledge of the matter said. Christine Anderson, a Blackstone spokeswoman, declined to comment.

<...>

The nature of the probe recalls a spate of public corruption cases in the U.S. where money managers were accused of making improper payments including campaign contributions to win contracts from public pension funds. The agency adopted new rules last year to curb so-called pay-to-play practices.



Read more: http://www.bloomberg.com/news/2011-01-14/sec-probes-financial-firms-on-possible-bribes-to-sovereign-wealth-funds.html

[DCKit]

1. They'll charge a few low-level people at Goldman and expect us to STFU. nt

[Broderick]

3. Criminals

And JP morgan is handing out 350K average bonuses - banner year. Suck it up and shut up.

[ProSense]

4. Not so sure. Here is Yves Smith's take

Bloomberg. Had wanted to post on it, but up WAAAY too late. Short form: this is a great opportunity sure to be squandered. Unlike insider trading, which typically involves very junior staff, selling to sovereign wealth funds takes pretty seasoned people and often involves top officers. These probes could be used to get knowledgeble insiders to turn other information but the SEC does not think this way. And any bribery will simply start being laundered through “consultants”.

link

She's as skeptical as they come. Not saying there isn't another way to squander it, but it will not be about underlings.

S.E.C. Looking Into Deals With Sovereign Funds

[DCKit]

5. In that case, fines (10% of their take) and it will go away. nt

[indimuse]

2. KNR! n/t