Compliance Insider

Issue 11 > Compliance Alerts

Samsung to settle false claims allegations with DOJ

Samsung Electronics America has agreed to pay US$2.3 million to the Department of Justice to settle allegations that it submitted false claims for products sold under the General Service Administration (GSA) Multiple Award Scheme (MAS).

Issue 11 > Compliance Alerts

StanChart facing additional fines for AML oversight

Standard Chartered could find itself facing a fresh fine following a New York banking regulator allegations that it failed to identify suspicious transactions and money laundering.

Issue 11 > Compliance Alerts

AAI requests larger fines for antitrust violations

The American Antitrust Institute (AAI) has sent a letter to the United States Sentencing Commission (USSC) requesting it to double the penalties inflicted on companies for antitrust violations.

Issue 11 > Compliance Alerts

Another guilty plea in Medicare false claims

The former owner of a Los Angeles-based medical clinic management company has pleaded guilty to his role in a scheme involving fraudulent prescriptions for durable medical equipment (DME) to defraud national social insurance programme Medicare.

Issue 11 > Compliance Alerts

Executive indicted in Chicago for funnelling money

A former executive of a Phoenix-based company was indicted amid an investigation into one of the nation's largest red-light camera programmes. Former CEO of Redflex Traffic Systems Karen Finley is accused of funnelling up to US$600,000 to a retired Chicago official John Bills in return for helping Finley's firm obtain $124 million in city contracts.

Issue 11 > Compliance Alerts

Whistleblower costs escalate for Halifax Health

Florida-based medical centre Halifax Hospital has agreed to pay US$5.4 million to cover the legal costs of a whistleblower who, earlier this year, filed a lawsuit that led to an US$85 million settlement with the United States Department of Justice (DOJ). The 6 August agreement settled claims of Medicare overbilling. Although not admitting any wrongdoing, Halifax Hospital also agreed to pay US$1 million for the settlement and US$4.5 million to cover the DOJ’s legal costs.

Issue 11 > Compliance Alerts

United States investigates Venezuelan energy company

Venezuelan company Derwick Associates has had investigations opened against it by Federal and New York City prosecutors. Derwick Associates became one of Venezuela's leading builders of power plants during President Hugo Chavez's administration.

Issue 11 > Compliance Alerts

Cobalt to be investigated following Angola allegations

Cobalt International Energy has received notice from the Securities and Exchange Commission (SEC) informing it that the agency will bring enforcement actions against the company over its Angola operations. SEC staff informed the Houston-based company of its preliminary determination to recommend an enforcement action for alleged securities violations in Angola, where Cobalt operates as a contractor on two offshore oil blocks.

Issue 11 > Compliance Alerts

Two Korean lawmakers detained for questioning

Prosecutors have detained two ruling lawmakers for questioning in South Korea. Both are suspected of receiving bribes, one in exchange for contracts and the other for illegal political funding. Cho Hyun-ryong of the ruling Saenuri Party may have taken bribes worth hundreds of thousands of United States dollars from Sampyo E&C in 2008. In exchange he is alleged to have awarded the company contracts for railway maintenance.

Issue 11 > Compliance Alerts

Potential precedent set by UK sentencing

The forthcoming sentencing of four executives in the United Kingdom could set a precedent for how the United States and United Kingdom divide future graft cases. If the punishment for the four former Innospec executives is sufficiently severe, then the United States is more likely to divide future jurisdictions and set a precedent for more cooperation in the future.

Issue 11 > Compliance Alerts

African geopolitical risk too hot for new Eni CEO

Italy’s largest company by market value, oil company Eni SpA, is facing increasing pressure from investors to diversify its business away from Africa due to geopolitical turmoil and resulting operational disruptions. New CEO Claudio Descalzi is expected to outline his vision to investors later this week when he announces a huge increase in second quarter profits. This follows last year’s losses that resulted from a scandal involving a services affiliate.

Issue 11 > Compliance Alerts

Smith & Wesson settles with SEC

Smith & Wesson has paid US$2 million to the Securities and Exchange Commission (SEC) to settle an investigation into allegations of foreign bribery. The SEC alleged that the firearms manufacturer's sales staff made illegal payments or gave gifts to government officials to secure new business in Pakistan, Indonesia and other foreign countries.

Issue 11 > Compliance Alerts

FA asks FIFA for Qatar report

The English Football Association have said that FIFA should publish the report on Qatar's 2022 world cup bid, although it downplayed comment on Russia's 2018 bid due to mounting political tension with Russia over Ukraine.

Issue 11 > Compliance Alerts

GSK's scandal expands to Syria

The GlaxoSmithKline (GSK) scandal continues to grow as new allegations emerge accusing it of paying bribes in Syria. Another email has been sent by a whistleblower informing GSK and the authorities. The allegations concern the company's consumer business, including its popular painkiller Panadol. The regulations involving non-prescription drugs are less strict than those around prescribed drugs, but the email said GSK gave bribes in the form of cash, speakers' fees, trips and free samples to win tender and obtain an improper business advantage.

Issue 11 > Compliance Alerts

Arrest warrants issued by Italy for two in India

An Italian judge has issued arrest warrants for a British consulate and an Indian lawyer. Both are accused of helping Finmeccanica unit Agusta Westland give bribes to Indian officials in exchange for high profile helicopter contracts. Both the consulate and the lawyer have been declared fugitives by the Judge.

Issue 11 > Compliance Alerts

Bribes and kickbacks from Boeing officer

A former procurement officer for The Boeing Company pleaded guilty to federal fraud charges as he admitted his role in a bribery and kickback scheme for military aircraft parts that were sold to Boeing.

Issue 11 > Compliance Alerts

Third party provides expired meat in China

A number of recognisable brands have been embroiled in a food scandal in China as unhygienic standards were found in a third party chicken supplier.

Issue 11 > Compliance Alerts

SEC investigates insider trading

United States' Securities and Exchange Commission (SEC) is investigating four dozen hedge funds, asset managers and other investment companies to determine whether or not they partook in insider trading. Suspicious trends emerged as companies bought health-insurance stocks in April 2013 ahead of a government announcement that benefited the insurance firms.

Issue 11 > Compliance Alerts

Ernst and Young settle SEC lobbying charges

Ernst and Young will pay US$4 million to the Securities and Exchange Commission (SEC) to settle charges that it lobbied congressional staff and violated auditor independence rules on behalf of its audit clients. On Monday the SEC said Ernst and Young is settling the case without admitting or denying the charges.

Issue 11 > Compliance Alerts

Sweett Group investigated by SFO for bribery

The United Kingdom's Serious Fraud Office (SFO) has launched a formal investigation into Sweett Group amidst allegations that a former Dubai-based employee asked a firm of architects to bribe officials to secure a US$100 million contract.

Issue 11 > Compliance Alerts

Wal-Mart goes to the Supreme Court to protect documents

Wal-Mart's lawyers have presented a case before the Delaware Supreme Court arguing for the retailer's right to retain internal documents and records involved in the ongoing Foreign Corrupt Practices Act (FCPA) investigation.

Issue 11 > Spotlights

How to nurture a culture of ethics

A culture of ethics is not a plan in a three-ring binder or an online training course. It is not a code of conduct or a hotline poster in the break room. And it is not what the CEO thinks the culture should be. A culture of ethics is when the members of a company view the seriousness and significance of acting ethically. While this statement is very general, many aspects contribute to a culture of ethics such as how managers act, what people do when they witness misconduct and what they do when they need help. Defining, shaping and evaluating a culture of ethics can be a difficult and foreboding process, but it is an important one.

Issue 11 > Things To Think About™

Building up an effective virtual compliance team

When finding staff for a global compliance function there is an obvious challenge in getting the headcount to cover the whole world. Because of this, it is not uncommon to draft people into the compliance teams that work in other areas of the business – typically HR, finance, channel distribution or operations. As part of their role, and to meet regulatory requirements, these people might oversee the compliance function in the country in which they operate and dotted-line report to the chief compliance officer. Often these people become little more than a local person to run interference and deliver the compliance training in their respective country.

Issue 11 > Due Diligence Handbook

On-going monitoring – being one step ahead

More and more companies are hitting the headlines for compliance failures, and many of these failures involve third parties engaging in corrupt business practices on behalf of the companies. While many companies have adopted a due diligence programme to collect information to ensure their business partners meet integrity standards, few have started actively monitoring their third parties. An important due diligence tool for compliance officers to prevent compliance failures is on-going due diligence. Constant monitoring will help ensure that business partners act with integrity at all times and will allow for a timely response as and when integrity issues arise.

Issue 11 > Country Focus

Due diligence challenges and possible remediation steps in India

India is an emerging country with a plethora of business opportunities for foreign companies and investors. It is in the blueprint of many United States–based multinational corporations that are seeking to invest and set up their businesses in foreign markets. But these opportunities come with various risks and challenges, which present a barrier to carrying out thorough due diligence on Indian companies.

Issue 10 > Compliance Alerts

SFO arrests Airbus employees in Saudi corruption investigation

The UK Serious Fraud Office (SFO) has arrested and questioned six individuals as part of an on-going investigation into a subsidiary of Airbus. Two current and two former employees of GPT Special Project Management, the Airbus subsidiary that specialises in communications equipment for the Saudi National Guard, have been questioned along with two UK Ministry of Defence (MOD) officials.

Issue 10 > Compliance Alerts

Japan’s North Korean sanctions lift largely symbolic

Japan’s decision to lift some sanctions on North Korea in return for Pyongyang investigating the fate of Japanese citizens it abducted decades ago is largely symbolic and mostly irrelevant for compliance professionals. Although the announcement does suggest a thawing in relations between the two nations, Japan will continue to observe United Nations sanctions aimed at pressuring North Korea to drop its nuclear programme.

Issue 10 > Compliance Alerts

BNP Paribas receives record fine for sanctions breaches

BNP Paribas SA has agreed to pay nearly US$9 billion and plead guilty to violating United States sanctions against Sudan, Iran and Cuba. As part of the settlement, France’s largest bank has also been banned for one year from conducting certain United States dollar transactions.

Issue 10 > Compliance Alerts

New Zealand law changes aimed at organised crime

The New Zealand Government has tabled amendments to the country’s anti-corruption legislation in an effort to crack down on organised crime and bribery. If passed into law, the Organised Crime and Anti-corruption Legislation Bill will give law enforcement agencies more power to deal with corruption and will enable New Zealand to ratify the United Nations Convention Against Corruption.

Issue 10 > Compliance Alerts

Sanctions threat forces Namibia to act

Namibia has hastily amended its law dealing with money laundering and terrorism after it emerged that its government was facing imminent sanctions from the international community.

Issue 10 > Compliance Alerts

Alstom facing SFO prosecution following DOJ probe

The Serious Fraud Office has been given permission by the United Kingdom’s attorney-general to pursue French conglomerate Alstom and former employees for alleged overseas bribery.

Issue 10 > Compliance Alerts

Ignorance no defence for FedEx

FedEx is facing a US$235 million lawsuit, filed by New York State Attorney Eric Schneiderman, which alleges that the company smuggled 80 million untaxed cigarettes into the United States between 2006 and 2012.

Issue 10 > Compliance Alerts

Health reforms needed as drugmakers target local leaders

The head of Europe’s pharmaceutical industry group has called for reforms to the health system in order to remove incentives for corruption. Richard Bergstroem, director general of Brussels-based European Federation of Pharmaceutical Industries and Associations, said that such reforms were needed in addition to company initiatives that ensure proper practices.