Compliance Insider

Issue 13 > Compliance Alerts

Avon missed opportunity to correct FCPA violations

Avon Products has paid to settle bribery allegations from the United States Securities and Exchange Commission (SEC) after failing to address compliance issues that were identified in a subsidiary in 2005. The beauty products company failed to implement compliance controls to detect and prevent bribes being given to Chinese government officials, while Avon employees at the company and consultants at a subsidiary allegedly gave payments and gifts to officials.

Issue 13 > Compliance Alerts

Season’s Greetings

The team at Compliance Insider® would like to take this opportunity to extend our very best wishes to all of our readers and their families during this holiday season, and to thank you all for your support in 2014.

Issue 13 > Compliance Alerts

No longer for your eyes only

An early version of the new James Bond movie script has been stolen as part of the Sony Pictures Entertainment hack. Last month’s hack saw upcoming films such as ‘Annie’ and ‘Fury’ taken and posted online on pirate websites, and the movie producer can now add the screenplay of SPECTRE to the list of items stolen by the hackers.

Issue 13 > Compliance Alerts

Sony attack confirms nation state online threat

The United States Federal Bureau of Investigation (FBI) has said that the cyber-attacks on Sony “would have slipped or gotten past ninety percent” of companies’ online defence systems. The statement by assistant director of the FBI’s cyber division Joe Demarest provoked Senator Charles Schumer to issue the simple response of “wow”.

Issue 13 > Compliance Alerts

Indian whistleblowing culture could do better

A recent survey involving 150 listed companies in India has revealed that only 30 of them have a whistleblower programme that covers bribery and corruption. This is despite the country’s new whistleblower legislation and the fact that the Securities and Exchange Board of India (SEBI) recently made it mandatory, as per the 2013 Companies Act, for all listed companies in India to have such policies in place.

Issue 13 > Compliance Alerts

Sony PlayStation targeted by hackers

Sony has been hacked once again, this time via its online PlayStation store. The store was inaccessible for more than two hours in early December, with the breach occurring only one week after the illegal release of movies such as Annie, and the leakage of personal information online. Sony Computer Entertainment announced that its PlayStation system was down between 8.52am and 11.18am Tokyo time on 8 December, but that the problem had been fixed and the investigation into the malfunction was continuing.

Issue 13 > Compliance Alerts

Former Apple executive sentenced to prison

A former Apple executive has been sentenced to jail and ordered to pay almost US$4.5 million in restitution. Paul S Devine was sentenced to 12 months and one day in jail for wire fraud, conspiracy, money laundering and engaging in transactions involving criminally-derived property. Devine admitted that he engaged in a scheme to defraud Apple, and that the criminal activities had begun in 2007. His job gave him access to confidential material, which he transmitted to suppliers in return for kickbacks.

Issue 13 > Compliance Alerts

Takata Corp refuses United States regulator request

Japanese airbag manufacturer Takata Corporation has refused a request by the United States National Highway Traffic Safety Administrator (NHTSA) to recall all cars containing the company’s faulty airbags. The product has already been linked to five deaths, with the airbags exploding with shrapnel.

Issue 13 > Compliance Alerts

Dodd-Frank conflict mineral laws are fuelling poverty

The United States Dodd-Frank law is fuelling poverty and not helping the situation in the Democratic Republic of Congo, despite obliging companies to determine if supply chains have conflict minerals in them. The damning verdict came from non-profit group Observatory of Governance and Peace, even though the law demands that companies must ensure there is no gold, coltan, tin or tungsten sourced in conflict mines.

Issue 13 > Compliance Alerts

FBI investigates movie piracy

Sony Pictures Entertainment has called in the United States Federal Bureau of Investigation (FBI) to investigate the illegal publication online of the soon-to-be-released ‘Annie’ movie. The development follows last week’s hacking of the studios of the rereleased film’s makers, Sony Pictures Entertainment. Other Sony Pictures’ movie titles to appear online prior to their release include Second World War drama ‘Fury’ as well as ‘Mr Turner’.

Issue 13 > Compliance Alerts

China inspects Sinopec as corruption crackdown continues

Chinese regulators have launched an inspection into state-owned enterprise Sinopec Group, which includes Asia’s largest oil refiner China Petrochemical Corporation. The focus of the regulators’ enquiry will be on those senior officials vying for promotion to leadership positions. State media has reported that the process, which is being led by China’s Central Commission for Discipline Inspection (CCDI), will be completed within a month.

Issue 13 > Compliance Alerts

Tesco executive resigns amid accounting scandal

A Tesco executive who was previously suspended has now left the company following an accounting scandal that saw the supermarket retailer misjudge profits. The executive was one of eight suspended following an announcement in September pertaining to overstated profits. At the time, Dave Lewis, who replaced Philip Clarke as chief executive, emphasised that the suspensions were not “disciplinary or an admission of guilt”.

Issue 13 > Compliance Alerts

DOJ orders broadcasters to divest to remain antitrust compliant

The United States Department of Justice (DOJ) has announced that it requires four Indiana-based broadcasting companies to divest their interests in a CBS and FOX affiliate if the acquisition of one of the companies by another is to take place. The DOJ is aiming to prevent one broadcasting company obtaining a dominant market position in Indiana. Evansville-based Nexstar Broadcasting Group, Mission Broadcasting, Communications Corporation of America (CCA) and Silver Point Partners, will each be required to relinquish their interests in WEVV-TV before Nexstar can continue with its purchase of CCA.

Issue 13 > Compliance Alerts

E-cigarettes could damage your data security health

E-cigarettes may be carrying malware, and could infect computers when they are plugged in to charge. Many e-cigarettes attach to computers for power via USB ports or special cables, but this can leave the computers vulnerable to viruses if the e-cigarette is from an untrustworthy supplier.

Issue 13 > Compliance Alerts

Co-op grants tarnished compliance officer second chance

The Co-operative Bank (Co-op) has hired a former senior HSBC executive to keep it out of trouble, despite the fact that he resigned from his previous role due to a money laundering scandal. David Bagley has been appointed director of regulatory risk and compliance to help improve the damaged reputation of the United Kingdom bank.

Issue 13 > Compliance Alerts

Raids reveal bribery list

An entertainment venue in Bangkok has been raided by Thai authorities, who found a list of police officers that were allegedly receiving bribes so that they would turn a blind eye to license violations and illegal sex services. Illegal items, including drugs, were also found. The raid was conducted by 50 police and military officers after reports arose that the venue did not have the appropriate licences and was offering sex services.

Issue 13 > Compliance Alerts

FIFA criminal complaint sends mixed messages

FIFA has sent mixed messages to the public by submitting a ‘criminal complaint’ to the Swiss attorney general in relation to the bidding process for the 2018 and 2022 World Cups. It remains adamant however that evidence from the investigation into the process is not sufficient to warrant publishing the findings of that investigation in full.

Issue 13 > Compliance Alerts

HSBC accused of money laundering

A Belgian prosecutor has formally accused the Swiss arm of HSBC of money laundering. The prosecutor said that the bank helped more than 1,000 wealthy investors avoid tax by moving money to offshore havens such as Panama and the British Virgin Islands. A spokesman for the court said that the bank was helping wealthy Belgian clients avoid a 35 percent tax rate for money held in Switzerland by advising them to move their money offshore. Several billion dollars are estimated to have left Swiss accounts as a result.