SEC Probes Banks, Funds Over International Bribery Concerns

(Reuters) The U.S. Securities and Exchange Commission is investigating whether banks and private-equity firms violated bribery laws in their dealings with sovereign-wealth funds, The Wall Street Journal reported on Thursday.

The newspaper, citing people familiar with the matter, said the SEC has sent letters of inquiry to as many as 10 companies in the past week.

Among the companies are Citigroup and private-equity firm Blackstone Group , the report said.

One person familiar with a firm that received a letter said it was brief, indicating the investigation was at the early stages, the Journal reported.

Sovereign-wealth funds have in recent years invested in private-equity funds and the biggest Wall Street firms, taking stakes in Citigroup, Merrill Lynch before its acquisition by Bank of America , and Morgan Stanley .

For example, in 2007, China Investment, which manages more than $300 billion, invested in both Morgan Stanley and Blackstone.

An SEC spokesman declined to comment.

Copyright 2010 Thomson Reuters. Click for Restrictions.

Comments

[JustJoy7]

03:08 PM on 01/15/2011

Don't want to hear about probes because you don't ever hear where they yielded anything useful.

[Longtimeliberal]

05:10 PM on 01/14/2011

There are questions worldwide and investigations into who was at fault. Many countries have done more than we have. The Basil III reg's will make things more restrictive.

[realitytrumpsbull]

12:14 AM on 01/15/2011

Well, we're pretending here that ANY kind of 'straight business' is going on, if you stop and think about it, Wall St. is the ideal, the perfect venue, for money laundering to go on, sort of interleaved between the usual transactions, needle-in-a-haystack kind of thing. How will you find crooked stuff, or stuff that doesn't measure up to some kind of common standard(yet to be established) of 'good clean business'?

[blood1]

04:03 PM on 01/14/2011

Well, we know the dollar amount paid to pay offf at least one bribary charge. Haliburton paid Nigeria $250k to get Cheney out from under these charges. And to think, Nigeria started at $2M...so now we can also figure the discount rate! Maybe Haliburton proved to Nigeria that he wasn't really alive (no pulse) and that was the "dead-beat" rate.

[hellboundtrain]

02:12 PM on 01/14/2011

An interesting topic for the financial writers to explore:
"How Naked Short Selling is Like Bribery"...

Besides both destroying to market confidence

[karen1p]

01:38 PM on 01/14/2011

So it seems that national bribery = okay
International bribery = deserves to be investigated?

Ummmm......why?

(don't get me wrong, I DO believe bribery should be investigated......but HERE too!)

[logic102]

02:03 PM on 01/14/2011

Exactly right. We should see not just the Swiss banker get indicted, or a British company like BAE get into trouble, but all the players on Wall Street should get nailed. When it comes to money laundering for orgainize crimed, we should see trouble for companies like, AIG, Citigroup, Wachovia, etc.

And as far as bribery is concerned, well AIG and a host of others should be on the list.

[nothingchanges]

03:12 PM on 01/14/2011

From what I could read, the SEC is only concerned if bribery breaks the law.

If it's legal, it isn't their problem.

Explains why they don't investigate here.

[lightningbolt]

01:13 PM on 01/14/2011

Corporations are legally bribing our elected officials with campaign money.  THIS is the real bribery scandal of the century.

[jhendrix]

10:26 AM on 01/15/2011

And completely ignored by the media.

[OlHippie]

01:11 PM on 01/14/2011

Oh thank heavens, it's just the banks. I was afraid the Gators were caught bribing officials.

[cats530]

01:10 PM on 01/14/2011

Wow, if the SEC is "on it", we better believe there will be a full investigation, prosecution for wrongdoing and heads will roll.

NOT.

[maxhardon]

01:35 PM on 01/14/2011

Yeah, I'll bet those bankers are shaking in their boots!

[Sundialsvc4]

01:03 PM on 01/14/2011

Well, how about bribery of public officials of the Government of the United States?

These are not "campaign contributions," folks. There is nothing respectable about "lobbying." There is no such thing as "corporate freedom of $peech."

Remove the log in your own eye, before you concern yourself about the plank in someone else's.

[oneyippie]

12:56 PM on 01/14/2011

Banks paying kickbacks? Who woulda thought?

[Rachael Marie]

12:56 PM on 01/14/2011

Too bad most of the bribery that actually occurs is perfectly legal.

[G52]

07:14 AM on 01/15/2011

Morally corrupt!

[logic102]

12:43 PM on 01/14/2011

I have a "problem" with the title of this article and it is not the fault of those who put the title on this article, they are just reporting the facts.

I am thinking the title should read: The U.S. Justice Department, the branch of government that can bring criminal charges against wrongdoers as opposed to the civil charges that can be brought by the SEC, Probes Banks, Funds over International Bribery Concerns.

And the title would read similar to what I have suggested if the authorities were not just interested in creating headlines, but actually interested in "detering" criminal activity.

We need a better Justice Department then the one we have now. President Obama needs to take a different approach with respect to the crooks on Wall Street and he needs to relace Eric Hold at DOJ with someone like William K. Black.

[optimist7]

01:03 PM on 01/14/2011

I agree. For all of the grousing about Rahm Emanuel and the financial team, the biggest disappointment for me in Obama's administration has been Holder.

[karen1p]

01:40 PM on 01/14/2011

Holder is hired by Obama.

The biggest disappointment in Holder, is his boss.

[2garen]

12:16 PM on 01/14/2011

Dear Sirs:
We are starting an investigation as to the possibility of international bribery .
We are at the preliminary stages of our investigation and wish to suggest that you get your shredders working 24/7 .
Signed those that are beholden to you.

[jhendrix]

01:43 PM on 01/14/2011

That is funny but sad. One has to just laugh at all this "news," otherwise you would become a gibbering lunatic.

[2garen]

08:02 PM on 01/14/2011

Sorry I couldn't resist. My cycnical humor gets the best of me.

;)