The United Kingdom Financial Conduct Authority (FCA) has announced that it has fined ICAP Europe Ltd (ICAP) £14 million in the first penalty to be handed to a brokerage firm in relation to manipulation of the benchmark interest rate known as Libor.
Canada is the latest country to require resource companies to increase transparency in respect of their payments to foreign governments, in line with the United States (US) Rules 17 CFR Parts 240 and 249 - Disclosure of Payments by Resource Extraction Issuers and proposed revisions (25 October 2011) to European Union Directive 2004/109/EC, known as the EU Transparency Directive.
The European Parliament (EP) has announced that European countries' national parliamentarians and EP members will meet in Brussels on 7 May 2013 to "exchange views on the role and the experiences of national [p]arliaments in the fight against organised crime, corruption and money laundering".
The website of Lebanon-based newspaper Al Mustaqbal was hacked and replaced by a list of witnesses in the murder trial of former Prime Minister Rafik Hariri, reports The New York Times (NYT). The list reportedly included the names, pictures, professions and residence details of 167 witnesses that were to appear before the Special Tribunal for Lebanon in the murder trial.
ThyssenKrupp AG announced its intent to boost its compliance program by establishing a whistleblower program after the company has faced a string of corruption cases recently. The company has started an amnesty program that guarantees workers exemption from punishment if they assist in exposing legal infringements and compliance violations.
The United States (US) Securities and Exchange Commission (SEC) has announced that it has adopted rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring oil, gas and mining companies to disclose certain payments made to the US Government or foreign governments. The rules also apply to subsidiaries of these companies.
SEC's media release (22 August 2012)
Related news item:
Reuters: U.S. SEC forces disclosure of oil, mining payments abroad (22 August 2012)
(Source: SEC; Reuters)
The United States (US) Department of Justice (DoJ) has announced that pharmaceutical distribution company Altec Medical (Altec) has admitted to its role in a a multi-million dollar prescription drug scheme, and has been ordered to pay a US$2 million fine and to forfeit US$1 million. According to the DoJ, "Altec paid its supplier and co-conspirator William Rodriguez, approximately [US]$55 million for prescription drugs that it knew had been diverted from lawful channels of drug wholesale distribution", known as a "drug diversion" scheme. Altec was aware that Mr Rodriguez had purchased the drugs from individuals who did not possess a licence to sell prescription drugs on a wholesale basis. It was alleged that Mr Rodriguez diverted the drugs to his companies and resold the drugs to Altec, who in turn resold the drugs to various purchasers, including drug distributors. The US Government further charged that the defendants attempted to conceal their scheme by falsifying documents relating to the drugs' prior sales and transactions history.
DoJ's media release (10 August 2012)
This multi-part series on Managing Anti-Corruption Risk focuses on the business processes that can both build organizational integrity and help mitigate the risks presented by bribery and corruption.
In Part 3, Anti-Corruption Issue Management, a step-by-step process that leads to effective compliance is laid out for compliance, ethics, legal, investigative and risk professionals. A key underlying element of effective compliance is defined as the ability to not only resolve issues but also identify their direct causes and the relationship among issues.
Over the past week the Olympic Games have once again captured the world’s attention. According to its charter, the goal of the Olympic Movement “is to contribute to building a peaceful and better world by educating youth through sport practiced in accordance with Olympism and its values.” Part of that movement includes promoting ethics in sports. While there have been multiple displays of this mission in action over the past week, there have also been a few incidents that remind us that corruption can come in many forms and occur in many different arenas.
While testifying at a U.S. Senate hearing earlier this week, David Bagley, HSBC Holdings Plc (HSBA)’s head of group compliance, said he would step down from his position at the bank due to claims the bank failed to prevent money laundering and provided terrorists, drug cartels and other criminals access to the U. S. banking system. A total of six HSBC executives testified before the Senate’s Permanent Subcommittee on Investigations after the committee released a 335-page report detailing the compliance failures at the bank over the past decade. The executives expressed regret over the failings as they testified and promised changes in response to the allegations contained in the report. According to the report, HSBC ignored links to terrorists among its customer banks, including Al Rajhi Bank in Riyadh, Saudi Arabia which had previously been linked to terrorists through its owner. Additionally, the report claims that, between 2000 and 2009, HSBC gave its lowest risk rating to Mexico despite it being well known that Mexico was a high-risk location for drug trafficking and money laundering. The report also contained a 2007 email from a senior HSBC manager of group compliance denouncing HSBC’s Mexican affiliate for “rubber-stamping unacceptable risks.” The report went on to reference violations of the Treasury Department’s sanctions on business with Iran. According to an audit conducted by Deloitte LLP, 25,000 transactions totaling over $19.4 million involved Iran. HSBC has said it is cooperating with the Department of Justice, Federal Reserve, and Office of the Comptroller of the Currency with their investigations into the Iran sanction violations. The bank could face fines of up to $1 billion.
Bloomberg Businessweek: HSBC Executive Resigns at Senate Money-Laundering Hearing (23 July 2012)
(Source: Bloomberg Businessweek)
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