Compliance Insider

Issue 16 > Compliance Alerts

EU removes two oil companies from Iranian sanctions list

The European Union (EU) has removed two Iranian oil producers from its sanctions list in what is the first move of its kind since Iran secured a nuclear agreement with the West. Petropars Operation and Management and Petropars Resources Engineering are both part of a group that is extracting gas in Iran, and had previously complained to the EU that there was insufficient evidence to warrant them being on the sanctions list.

Issue 16 > Compliance Alerts

Third party misconduct can cost companies more than just financial penalties

Companies subjected to financial penalties for misconduct by their third parties may end up losing as much as 10 times the amount of the fine itself in market value. That was the startling conclusion from a newly-released survey, which also calculated that companies fined by regulators for illicit behaviour by their third parties are on average subject to a 2.6 percent drop in share price as a result. International fines and remedial costs can be as much as £650 million (US$1 billion), which is before reputational damage and the adverse effects on sales are taken into account.

Issue 16 > Compliance Alerts

Bribery suspected in Taiwan dust explosion

Taipei City Mayor Eric Chu has said that he will launch an investigation into Formosa Fun Park after allegations surfaced that safety inspectors took bribes from park officials the week before nine people died in a dust explosion. According to the allegations, seven city officials that were supposed to conduct an audit on the theme park on 18 June instead accepted a number of admission tickets carrying a value of approximately NT$20,000 (US$630). According to reports, this prevented the proper safety checks from being conducted.

Issue 16 > Compliance Alerts

Chinese general joins ranks of officials accused of corruption

A former Chinese army general has been expelled from the Communist Party amid corruption allegations. The allegations against Guo Boxiong follow similar ones against two of his former colleagues, general Xu Caihou and general Gu Junshan. Guo is accused of embezzling approximately US$5 billion via military real estate deals and using his influence to secure promotions for others. The downfall of yet another high-ranking official is the latest development in the ongoing campaign against corruption in China, which is being driven by President Xi Jinping.

Issue 16 > Compliance Alerts

Survey confirms pressure to compromise corporate ethics

Management accountants who help companies seek out investments and control risks are facing increasing pressure from their managers or colleagues to compromise their organisation’s ethical standards. The findings from an online survey conducted through a joint venture by accounting bodies the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) confirmed that 37 percent of management accountants have experienced such pressure. A quarter of respondents meanwhile have observed conduct during the last year that violated their organisation’s ethical standards, policy or law.

Issue 16 > Compliance Alerts

United States court admission leads to Indian arrest

The admission by civil engineering firm Louis Berger that it bribed an Indian official or minister has resulted in the arrest of project director of the Goa Water and Sewerage Project Anand Wachasundar. Goa Police detained Wachasundar for his knowledge of the bribes, but the identity of the recipient remains a mystery. The crime branch of the Goa Police filed a First Information Report (FIR) against the people involved in the case on 21 July, but failed to name them publicly.

Issue 16 > Compliance Alerts

Former Oppenheimer employees settle securities law violation charges

Three former employees of broker-dealer Oppenheimer & Co have agreed to settle charges relating to the unregistered sale of billions of shares of penny stocks on behalf of a customer. Without admitting or denying the findings of the Securities and Exchange Commission (SEC), former Boca Raton-based registered representative Scott A Eisler, his former branch manager and superviser Arthur W Lewis, and Lewis’s superviser and former Private Client Division head Robert Okin agreed to the settlements.

Issue 16 > Compliance Alerts

UK Sky TV and US film studios accused of antitrust

Sky TV in the United Kingdom and six major United States film studios have been accused of breaking European Union (EU) competition law by blocking access to movie content on pay-tv channels in other EU countries. The European Commission's antitrust regulator has issued a formal statement of objections to all studios involved: Warner Bros, 20th Century Fox, NBC Universal, Disney, Paramount and Sony.

Issue 16 > Compliance Alerts

Former aide to China’s ex-President accused of corruption

Ling Jihua, the former personal secretary to former President Hu Jintao, has been arrested on charges of corruption and expelled from the ruling Communist Party of China (CPC). Ling is charged with accepting bribes, illegally obtaining party and state secrets, and keeping mistresses and trading power for sex, according to state-run Xinhua news agency.

Issue 16 > Compliance Alerts

SEC whistleblower collects US$3 million for insider information

The Securities and Exchange Commission (SEC) has awarded its third biggest ever payment of US$3 million to a company insider for providing information that led to significant enforcement action in a complex fraud case. “The whistleblower’s specific and detailed information comprehensively laid out the fraudulent scheme which otherwise would have been very difficult for investigators to detect,” stated the SEC.

Issue 16 > Compliance Alerts

Ex-Vinashin employee arrested for misappropriation of funds

Gian Kim Dat, a former sales manager at Vinashin Ocean Shipping Co. Ltd, a Vietnamese subsidiary of Vinashin, has been arrested in connection with the alleged misappropriation of US$18.6 million in funds. Dat’s arrest comes in the wake of a number of graft accusations levied at Vinashin, who have reported losses of US$49.98 million.

Issue 16 > Compliance Alerts

Brazilian ex-President’s home searched in Petrobras probe

Former Brazilian President and current senator Fernando Collor de Mello’s home has been searched by police, as they continue to investigate the ongoing multi-billion dollar Petrobras bribery scheme. Investigators claim that Brazilian politicians and other high ranking officials received kickbacks in exchange for approving inflated contracts for the multinational energy corporation.

Issue 16 > Compliance Alerts

Swiss authorities identify 81 cases of suspicious financial activity linked to FIFA

Swiss authorities have received 81 reports of suspicious financial activity that were associated with the 2018 and 2022 World Cup bids. Since mid-June, Swiss authorities investigating the decisions to grant the tournament to Russia and Qatar respectively have received 28 suspicious activity reports. Russia and Qatar have denied wrongdoing, despite widespread allegations that votes and support for them hosting the World Cup were bought.

Issue 16 > Compliance Alerts

Doctor sentenced to jail for accepting US$1.8 million in bribes

A doctor in New Jersey has been sentenced to 63 months in prison for accepting US$1.8 million in bribes. Frank Santangelo accepted the bribes from medical lab company Biodiagnostic Laboratory Services in return for referring patients and performing unnecessary tests. Santangelo pleaded guilty in July 2013 to travel act violations, money laundering and failing to file tax returns. The bribes were allegedly part of a long-running scheme run by the company in which it bribed a number of doctors to illicit referrals and unnecessary tests. Prosecutors said that the company received more than US$6 million from Medicare and insurance companies for the referrals.