Anti-Bribery and Anti-Corruption

Husband and Wife Plead Guilty to FCPA Violations

Husband and wife Stuart and Hong “Rose” Carson pled guilty earlier this week to violating the Foreign Corrupt Practices Act (FCPA). The couple, the former president and the director of sales for Control Components, respectively, confessed to bribing foreign officials on behalf of their company in violation of the law. Stuart Carson faces up to 10 months in prison while his wife Rose faces up to 3 years probation. They will be sentenced this October. The charges against the couple are the latest in a long running investigation into Control Components. In 2009, the company pled guilty to violating both the FCPA and the Travel Act, which prohibits commercial bribery, when it paid bribes to officers and employees of state-owned and privately-owned customers in more than 30 countries. The company paid an $18.2 million penalty and agreed to institute strong internal controls. Three other former executives, Richard Morlok, Mario Covino and Flavio Riccotti, have also pled guilty to conspiring to violate the FCPA. Three additional former executives, Paul Cosgrove, David Edmonds and Han Yong Kim, have been indicted.

Wall Street Journal: Husband And Wife Plead Guilty To FCPA Violations (17 April 2012)
(Source: Wall Street Journal)

Middle Management Largely Unaware of UK Bribery Act
Europe, Middle East and Africa

According to a survey conducted by Ernst & Young, 72% of middle managers working in Britain were not aware of the Bribery Act 2010 (Act). Additionally, of the 28% of middle managers who do know about the Act, only 55% feel they have been provided with enough training to enable them to abide by the law. According John Smart, a partner at Ernst & Young, “The survey results should serve as a stark warning to firms that they should ramp up their compliance procedures to ensure that clear anti-bribery policies are in place.”

ILM: Survey: 72% of managers unaware of Bribery Act (13 April 2012)
(Source: Institute of Leadership & Management)

UK Regulator’s Statistics Reveal More Share Fraud But Less Loss
Europe, Middle East and Africa

The UK Financial Services Authority (FSA) has announced that according to its statistics, share fraud rose by 19% in 2011, however, fewer people were conned into investing with the fraudsters, with a 7% drop in investors. According to the FSA, this percentage “represents a significant amount of money that could have been saved” because the average loss suffered by investors is around £20,000.

FSA’s media release (17 April 2012)
(Source: FSA)

Former Syntax-Brillian CEO Fined US$11 Million for Insider Trading

The US Securities and Exchange Commission (SEC) has announced that former Syntax-Brillian chief executive officer (CEO) James Li has been ordered by the United States District Court “to pay disgorgement of US$1,673,481, prejudgment interest of US$575,472.93, an insider trading penalty of US$4,540,443, and a civil penalty of US$4,810,000 for his role in the financial fraud scheme” that Mr Li and other Syntax senior management took part in between June 2006 and April 2008. Mr Li was also banned from being an officer or director. The scheme involved reporting false and misleading financial statements, creating false sales and shipping documents and “coordinating the circular transfer of funds among and between Syntax, its primary manufacturer in Taiwan, and its purported distributor in Hong Kong to make it appear that fake invoices were being paid”.
SEC’s media release (9 April 2012)
(Source: SEC)

Anti-Corruption Regulator Laments Absence of Conflicts of Interest Laws
Europe, Middle East and Africa

All Africa reports that the Anti-Corruption Commission (ACC) has expressed concern at the lack of a laws barring conflicts of interest, claiming that “conflict of interest has resulted in the improper management of public affairs and social injustice towards the country’s masses who are pushed away from the country’s key resources”. The ACC reportedly said that “conflict of interest often gives birth to corruption”, adding that the failure to criminalise such conduct has made it extremely difficult to catch people who have acted in conflict of interest. In addition, the ACC has voiced the need for legislation “that compels public officials, especially those in management positions, to disclose companies in which they or their relatives have interests”, in order to counter the problem of officials favouring companies in which they have interests, reports All Africa.

All Africa: Namibia: ACC Hands Tied On Conflict of Interest (10 April 2012)
(Source: All Africa)