Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week, an ex-Braskem CEO is expected to plead guilty in a bribery case. Read the full story and more news below:
Ex-Braskem CEO to Plead Guilty to Bribery:
Braskem’s former CEO, Jose Carlos Grubisich, accused of bribing Brazilian state officials, is set to plead guilty in an upcoming trial. The charges are linked to a broader corruption case related to Braskem’s parent company Odebrecht. Grubisich is accused of receiving bribes worth USD 2.6M and of helping divert USD 250M from Braskem towards corrupt ends. The former CEO, who left the company in 2008, is also accused of paying bribes to politicians across Brazil to gain improper advantages.
Switzerland Lifts Acquisition Ban on Julius Baer:
Swiss Financial Market Supervisory Authority Finma announced a lift on swiss bank Julius Baer’s acquisition ban after the bank was accused of money laundering concerning FIFA and Venezuela’s state-owned oil company PdVsa. Finma imposed the ban in 2020 after it found Julius Baer failed to prevent money laundering from 2009 to 2018. Besides the acquisitions ban, authorities also ordered the bank to undergo a monitorship period and to ramp up its AML measures. The decision to lift the ban was based on reports of an independent auditor supervising the bank. Julis Baer will continue to be monitored and is preparing to settle allegations in the same corruption case in the U.S soon.
EY Drops Whistleblower Appeal:
Audit giant EY announced it would drop an appeal to a judge’s decision that the firm would have to pay USD 10.8M to the whistleblower that uncovered the gold smuggling scandal in 2012. Whistleblower Amjad Rihan’s audit team discovered that EY failed to respond to suspicious activity related to a USD 5.2BN cash payment of a gold refiner made in Dubai. After Rihan attempted to get his managers to report the red flags, he was fired. Rihan voiced the misconduct to authorities in the U.K., which ordered the firm to pay USD 10.8M to the whistleblower. After denying the allegations during an eight-year legal fight in which the U.K. Court found that EY breached its professional duties in handling the jewelry case, EY was preparing for an appellation. In its latest statement, EY reiterated its rejection of the judgment and announced that the appeal ‘no longer merited the time and resources involved.’
World Bank Debars Scottish Company:
The World Bank debarred Scottish company NovoLine Resources for fraudulent practices to win an emergency medical aid deal in Uzbekistan. The World Bank found that NovoLine used fake documents to win World-Bank-funded tenders in a project that would help supply Uzbekistan’s health ministry with medical supplies. As a result, NovoLine is barred from participating in the World Bank’s procurement process for the next three and a half years.
U.S. SEC Gives USD 450,000 to a Whistleblower:
The U.S. Securities and Exchange Commission gave USD 450,000 to a whistleblower who had compliance-related responsibilities and reported misconduct to the authorities. According to the SEC, the individual waited 120 days after announcing the concerns internally and made reasonable efforts to ramp up the company’s compliance systems before reporting externally. The whistleblower’s information helped focus an ongoing investigation which ultimately led to successful enforcement action.
U.K. Financial Watchdog Releases Technical Whistleblowing Guidance:
The U.K’s financial watchdog, the Financial Conduct Authority (FCA), released a new communications campaign that includes a digital toolkit with materials that seek to encourage individuals to report misconduct. The toolkit provides practical guidance on the whistleblowing process and steps taken by the FCA to secure whistleblower protection. It also includes information that differentiates between different types of whistleblowers, including consumers and employees. In addition to the toolkit, the communications campaign also includes updated information on the FCA’s website. In 2020, the agency received 9% fewer tips than in 2019 and increased resources geared at whistleblower protection. The FCA requires all financial institutions to have internal reporting channels for employee misconduct.
German Politicians Resign Over Face Masks Bribery Scandal:
Niels Korte, a German politician, withdrew his candidacy for the parliament due to media coverage alleging he is involved in a COVID-19 procurement fraud case being investigated by German authorities. It is alleged that a handful of German politicians arranged a face mask procurement deal where members of parliament were bribed by intermediary companies. One of the members of parliament is suspected to have received USD 1.4M in bribes, and another one of USD 800,000. German authorities arrested one of the individuals suspected of having bribed the public officials last week.