Automatically monitor regulatory updates to map to your internal policies, procesures and controls. Learn More

1558 Enforcement Actions in the U.S. over past 30 days


FTC enforcements decreased 55% over the past 30 days


SEC issued enforcements: $37,812,859 over the past 30 days


50 Final Rules go into effect in the next 7 days


49 Mortgage Lending docs published in the last 7 days


1670 docs with extracted obligations from the last 7 days


new Proposed and Final Rules were published in the past 7 days


11906 new docs in within the last 7 days


Considering RCM Solutions?  Here’s an RFP to get started.

blog img 11 min

Bribery isn’t limited to paying public officials to look the other way. In financial services, it can also be an issue of crossing the line of generosity and running afoul of specific compliance rules like the Bank Bribery Act.

This line can be crossed from both sides in finance, either with clients bribing employees or employees bribing clients. And both forms create conflicts of interest, that ultimately increase overall risk to firms.

Want box seats to the big game? How does a vintage bottle of Chateaux Margaux sound?  

On one hand, it may seem like no big deal to accept a gift from a client or even an outright offer of money. If a client wants to hand over extra to the firm, what’s the big deal?

The issue, however, is that the bribe chips away at the normal course of operations. If a client has been lavishing a banker with gifts, and then applies for a mortgage they normally wouldn’t be approved for, the banker may decide to approve it anyway, so as to keep the client happy and perhaps receive more elaborate gifts.

As a result of this rogue banker accepting bribes, the overall bank increases its risk, since it now has provided a mortgage to a risky client. In particular, if other employees are unaware that the client was undeservedly approved for the mortgage, they can not make adjustments to bring the bank’s risk level back to an acceptable limit.

And of course, these bribes are illegal, thereby putting the bank at further risk for regulatory fines and severe penalties.

We’ll Do “Whatever It Takes” to Win Your Business

In addition to clients bribing employees, sometimes it’s the other way around, where employees bribe clients in order to win business.

While it can be tempting to do so to meet sales goals, for instance, such acts are also prohibited.

These bribes do not necessarily need to be directly monetary either to be illegal. For example, major international banks have been fined for allegedly violating the Foreign Corrupt Practices Act (FCPA), by hiring and providing internships undeservingly to relatives of clients.

This type of bribe puts a financial services firm at risk in multiple ways, including regulatory risk, headline risk and potentially diminishing the quality of the workforce. That’s because more qualified candidates could be passed over, and in the future other strong candidates might be less inclined to apply to a company that falls afoul of FCPA compliance.

In addition, financial services firms sometimes bribe public officials such as at a public pension fund directly in order to gain business, which falls under a separate offense.

Education + Employees = Improved Enterprise Risk Management

Since the lines around bribery and compliance can be a bit murky, it’s crucial for financial services firms to have a robust compliance program with clear policies and procedures set to avoid crossing, or even getting too close to the line.

Employees should understand which specific regulations apply to them and how they can go about staying compliant. Yet since bribery laws and penalties can differ by state and country, compliance officers can have a difficult task in determining what’s “acceptable” behavior.

To ensure compliance officers can make such determinations and stay informed of relevant enforcements based on their asset-tier and charter, they can turn to a one-stop shop such as, which provides easy access to relevant documentation for employees to reference.

Additionally, financial services firms can put in place measures like compliance training and internal reviews by compliance management.

Doing so may seem like a burden, but the alternative of not being compliant can lead to a far greater burden, so it is important to properly manage this risk.

Take a look at how’s  regulatory intelligence solution helps financial institutions search, monitor, access, research and track regulatory content to stay ahead of bribery and other compliance missteps.

Tags: , ,