This Week in Compliance

This Week In Compliance: Deutsche Bank Fined USD 16 Million by SEC over ‘Referral Hiring’ Violations

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  • Deutsche Bank Fined USD 16 Million by SEC over ‘Referral Hiring’ Violations: German banking behemoth Deutsche Bank said on Thursday that it has agreed to pay the SEC USD 16 million to settle FCPA charges related to the hiring of relatives of public officials in Russia and China. In its administrative order, the SEC charged Deutsche with violating the FCPA’s books and records and internal accounting controls. The SEC said that the bank engaged in a pattern of hiring relatives of executives at State-Owned Enterprises since 2006. Some employees were hired despite failing tests and recommendations against hiring. The settlement consists of disgorgement of USD 10.7 million, a USD 3 million penalty, and USD 2.4 million in pre-judgment interest. The bank first disclosed the investigation in a regulatory filing in March 2015. READ MORE 

Business

  • Philips allegedly fired whistleblower who warned of bribery: Reuters reported this week that Philips, the healthcare giant, was warned of suspicious conduct in sales of its medical equipment to the Brazilian government nearly a decade prior to an alleged bribery racket being exposed last year. One of its former employees, Jose Israel Masiero Filho, told his supervisors of the suspected scheme as early as 2010 and was later fired. Masiero claims that he emailed an internal hotline, met with the company’s top compliance officer, and alerted at least three other executives in 2010. Philips told Reuters that it is cooperating with Brazilian authorities investigating the claims. The company said it launched an internal investigation into the matters in 2010 but “did not identify direct evidence of wrongdoing”.
  • Avianca reveals FCPA investigation in securities filing: Avianca, Colombia’s national airline, said in a U.S. security filing this week that it is investigating alleged violations of the Foreign Corrupt Practices Act (FCPA) and other anti-bribery laws because free and discounted tickets were provided to government officials in various countries. The airline said that the tickets were provided to officials by its employees, potentially including members of senior management and members of the board of directors. A voluntary disclosure was made to the DOJ, SEC, and regulators in Colombia on August 13th, 2019. No information was provided on which countries are involved in the internal investigation, how long it may take, or the dollar value of the tickets and upgrades. The company further added that it has “implemented policies designed to prevent such practice from occurring in the future”.
  • Former Alstom executive Hoskins to face trial for FCPA offenses: A federal district court judge ruled that Lawrence Hoskins, a British national who worked for Alstom, will have to face trial for Foreign Corrupt Practices Act violations and other offenses.Hoskins had moved to dismiss the trial arguing that he was denied his right to a speedy trial following his 2014 arrest. Hoskins was a senior VP for Alstom in France. The company pleaded guilty to FCPA offenses in 2014 relating to bribing officials in Indonesia, Egypt, Saudi Arabia, and the Bahamas. Three other Alstom executives pleaded guilty in the U.S. for bribing officials in Indonesia. Hoskins argued in his motion that the DOJ unreasonably delayed his indictment after the investigations and the delay caused key witnesses’ recollection to “substantially degrade”. Judge Arterton said in her ruling on Monday that “[…] given Defendant’s failure to demonstrate with specificity any impairment to his defense linked to post-indictment delays, any prejudice Mr. Hoskins has suffered weighs only slightly in his favor.
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