Europe, Middle East and Africa




Former Director to Pay £750,000
Business Ethics and Corporate Culture

The UK Financial Services Authority (FSA) has announced that former Toronto Dominion Bank managing director Nabeel Naqui has been banned and will pay £750,000 for intentionally “mismarking his trading positions and misleading fellow staff to conceal his losses over a period of two years”. During this time, Mr Naqui persistently altered quotes thereby misrepresenting to those conducting independent valuations of the company’s trading position. Pricing issues were discovered after Mr Naqui was made redundant in June 2008. Toronto Dominion Bank was fined £7m in December 2009 for regular systems and controls failings in relation to this case.
FSA’ media release (16 December 2010)
(Source: FSA)


€22 Million Seized in Derivative Dealings
Business Ethics and Corporate Culture

Reuters reports that Italy’s financial police has seized €22 million at Italian and foreign banks, following an investigation into allegations of fraudulent derivative deals taking place. Reportedly, the banks involved are Bank of America, Merrill Lynch, Deutsche Bank, Natixis, UBS Investment Bank of London, Dexia Crediop and Banca Monte dei Paschi di Siena. Economists have reportedly estimated that Italy’s local bodies involved in derivate contracts have incurred losses of more than €6 billion.
Reuters: Italian police seize 22 million euros in derivatives case (21 December 2010)
(Source: Reuters)


Prison for Founder Who Milked Fraud
Business Ethics and Corporate Culture, Financial Integrity

BBC News reports that Parmalat founder Calisto Tanzi has been sentenced to 18 years prison after he was convicted of criminal association and fraudulent bankruptcy, with former financial director Fausto Tonna sentenced to 14 years and Giovanni Tanzi to ten years and seven months. The former executives have also reportedly been ordered to pay €2 billion to the firm and defrauded investors. Parmalat reportedly went bankrupt in 2003, leaving a €14 billion hole in its accounts, and investigators found that the company’s long-standing problems had been concealed because of “fraud on its balance sheets”. The collapse is still reportedly Europe’s biggest bankruptcy and affected hundreds of thousands of investors and employees.
BBC News: Parmalat founder given 18-year jail term over fraud (9 December 2010)
(Source: BBC News)


Plea Bargain Settles Corruption Case
Anti-Bribery and Anti-Corruption, Government Contracting

The Guardian reports that US company Halliburton has agreed to settle charges that the company bribed Nigerian officials in order to secure contracts for a liquefied natural gas plant in the Niger delta. As part of the deal, Nigerian prosecutors have also agreed to drop charges against former US vice-president Dick Cheney, and Halliburton will pay US$250 million in fines. Former Halliburton unit KBR settled related US charges in 2009, agreeing to pay US$579 million.

The Guardian reports that some anti-corruption campaigners have expressed disappointment that the case was settled and the charges against former Halliburton chairperson Mr Cheney and three other executives will not proceed, with suspicion cast that former US President George Bush Sr and former US secretary of state James Baker “intervened” in order to “protect America’s huge oil interests in the region”.
The Guardian: Nigeria to drop Dick Cheney charges after plea bargain (15 December 2010)
(Source: The Guardian)


Firm Pays Millions for Breaching Sanctions
Anti-Bribery and Anti-Corruption

BBC News reports that Weir Group is preparing to pay £14 million after admitting that it breached United Nations sanctions in connection with the Iraq oil-for-food programme. The company will reportedly be charged with making irregular payments to Iraqi agents to secure deals, but has promised to return the profits wrongfully gained. Weir Group chairperson Lord Smith reportedly expressed disappointment at the firm’s past behaviour, and stressed that “we have radically overhauled procedures. A strong ethics culture is in place across the group and it is the reference point for everything we do”.
BBC News: Weir Group pays out £14m in sanctions breach (13 December 2010)
(Source: BBC News)