In 2009-13, according to the US Securities and Exchange Commission, Barclays plc's businesses in the Asia Pacific region improperly provided valuable employment to the relatives and friends of government officials and executives of Barclays’ non-governmental clients in the form of work experience, internships and permanent positions.

Between April 2009 and August 2013, Barclays Bank hired approximately 117 people who were referred to it by, or were connected to, foreign government officials or non-governmental clients. Most of these were youngsters on 'work experience' and internships, but some occupied permanent positions. The SEC has therefore penalised the banking giant, which admits the subject matter of the regulator's cease-and-desist order.

As is often the case, Barclays has made the SEC an offer before the SEC's subsequent embarkation on cease-and-desist proceedings against it, all in the SEC's own private court. The proceedings refer to Barclays' bad internal accounting controls, as prohibited by the Foreign Corrupt Practices Act 1977. The SEC says that employees of Barclays Asia Pacific Region (APAC), which contains some of the group's wholly-owned subsidiaries, falsified corporate records in order to conceal the true identities of the people who referred them to the bank and the reasons why the bank hired them.

Barclays' anti-bribery and anti-corruption (ABC) policies, written in 2009, included prohibitions against employing people in exchange for business, but its compliance people were not familiar with them. A senior regional compliance executive said that he had never read the ABC policy, which required pre-approval by the compliance department before Barclays could offer internships to public officials or their close family members, and he also told the SEC that he did not realise that an internship was considered an 'item of value' (an FCPA phrase) for compliance purposes until 2012.

By no later than June 2009, APAC compliance officers were aware of the practice of hiring interns, including the relatives and friends of clients. To the extent that compliance officers reviewed "relationship hiring requests" (a phrase that the SEC does not explain), their reviews were generally limited to potential conflicts of interest, internal policy notwithstanding. One senior APAC compliance executive said that he had never read the policy and a senior compliance officer who had the job of reviewing 'referral hires' (people who received jobs through referrals from others) admitted that when he looked at the requests he never bothered to ask for information relating to pending business with Barclays’ clients. The policy required 'compliance monitoring' in the hiring process as well, but he did not know how to conduct it.

In April 2009, a senior executive in APAC approved an unofficial intern scheme for Barclays Korea that was separate from Barclays’ formal internship scheme. The stated idea was to provide work-experience opportunities for Korean college students and “on occasion to provide positions for ‘relationship’ requests for qualified students.” Approximately half of the candidates between 2009 and 2013 were connected to Barclays' clients. The man in charge said that hiring decisions depended on the importance of clients and/or the doing of business. One banker in Seoul told others: “before we give [the son] the final offer, we would need to meet his father to confirm our business.”  Shortly after Barclays hired the intern, it obtained a mandate from the state-owned entity that the father chaired to act as the joint lead manager in a US$1 billion bond issuance, for which it earned approximately $971,000 in fees. This practice began with Korea but later spread to other APAC countries.

In September 2010, the daughter of the senior executive of a Chinese state-owned enterprise came into the frame. She performed poorly at interview, receiving a 'do not hire' recommendation, but the relevant relationship banker pushed for her hire anyway, saying that "from a business perspective, I am confident that her relationship will bring tangible business to us, particularly in [mergers and acquisitions] and Hong Kong IPOs in the near term.”

When the local compliance officer referred the matter to a senior compliance officer, highlighting the above comment, he approved the offer on the proviso that the business unit had to state that she ought to be hired for “her qualifications and her skills, not for any other reason.”  There is no evidence that the unit provided such an assurance. She duly joined Barclays APAC's 'graduate programme.'

In 2011 Barclays APAC set up a work-experience scheme. It hired the daughter of a senior executive of an important private client of Barclays through the 'graduate programme' even though she had not graduated from any college or university and had applied after the programme had closed.

In March 2012, Barclays revised its internal policies and procedures regarding referral hires to require someone in every case to attest that nobody was hiring anyone for the purpose of obtaining or retaining business. With the exception of one rejection, this had little effect on APAC approvals.

On 13 March 2013, Barclays Financial Crime Compliance decided to shut the work experience programme down.

Barclays has been ordered to 'disgorge' $3,824,686 that represent its ill-gotten gains (although one might think that this is a little on the low side) and to pay prejudgment interest of $984,040 and a civil money penalty of $1,500,000, representing a total payment of $6,308,726 to the US Treasury.