Tuesday, January 18, 2011

For Wall Street, Antibribery Inquiry Is Cause for Concern

By Peter Henning.
The perceived profligacy of Wall Street is well known, from the bonuses to the perks to the lavish parties. The S.E.C. reluctantly tolerates so-called “soft dollar” arrangements between investment firms and brokers that barter securities trades for various benefits, even though the former S.E.C. chairman, Christopher Cox, once said they “are really inflated brokerage commissions.”
There are limits to what can be provided. For example, the mutual fund giant Fidelity settled S.E.C. charges that 2 executives and 10 traders accepted approximately $1.6 million in gifts from brokerage firms to obtain trades generating millions of dollars in commissions.
Plying potential investors and customers with gifts may be an accepted practice on Wall Street, but dealing with a foreign official triggers the proscriptions of the Foreign Corrupt Practices Act. The law prohibits any “offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value” related to obtaining or retaining business.
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