SEC Opens Whistle-Blower Office
Last Friday, the Securities and Exchange Commission (SEC) opened its new whistle-blower office. The new office will issue financial rewards to employees who report corporate crimes to the government. Whistle-blowers can receive up to 30% of the fines collected from malfeasant companies or executives.. In order to qualify for a reward, an employee must report new information that leads to an enforcement fine of over $1 million. The SEC reports that it has already seen an increase in quality tips.
New York Times: Facing Complaints, S.E.C. Opens Whistle-Blower Office (12 August 2011)
(Source: New York Times)
Emissions Tax Fraud Trial Begins in Germany
Europe, Middle East and Africa
The Australian reports that the trial of six business executives for €230 million ($318.23m) of emissions tax fraud has begun in Frankfurt, Germany. Prosecutors reportedly allege that between September 2009 and April 2010 the network “regularly drew tax rebates on emissions certificates for which no taxes had been paid in the first place”. Authorities are reportedly investigating a further 160 suspects and believe the fraud could total €850m ($1.18 billion). Under the European Union Emissions Trading Scheme, the largest emissions trading scheme in the world, companies whose carbon dioxide emissions are below a certain target can sell their excess emissions rights to companies seeking higher limits. One of the accused, 27-year-old Fraz Mir from the United Kingdom, has reportedly confessed his involvement in the network but said he did not realise he was breaking German law and apologised.
The Australian: Trial starts over emissions ‘fraud’ in Germany (16 August 2011)
(Source: The Australian)
RBI Fines Bank for AML Failures
The Reserve Bank of India (RBI) has announced that it has imposed a fine of Rupees one lakh (approximately €1,600/US$2,200) on Becharaji Nagarik Sahakari Bank Ltd for violating the RBI’s instructions on know your customer (KYC) norms and the anti-money laundering (AML) guidelines.
RBI’s media release (16 August 2011)
Venezuelan Oil Potential Overshadowed by Scandal
Reuters reports that despite a July 2011 Organisation of the Petroleum Exporting Countries report naming Venezuela as the largest holder of crude oil reserves, the oil industry is embroiled in scandal over claims of corruption and mismanagement after the country’s primary oil company, PDVSA was found to have embezzled more than US$2.5 billion of pension funds.
Reuters: Pension scandal shakes up Venezuelan oil giant (17 August 2011)
Casino Lobbyists Acquitted of Bribery
The New York Times (NYT) reports that a two year investigation into allegations that casino operators and lobbyists in Alabama bribed state lawmakers for favourable votes on a gambling bill has concluded with a federal court ordering acquittals or mistrials, and no convictions.
NYT: In Alabama, No Verdicts of Guilty in Graft Case (11 August 2011)