Here’s what’s been going on in the compliance world this week:
- Facebook to face UK fine over Cambridge Analytica breaches: Britain’s Information Commissioner Elizabeth Denham said this week that she intends to fine Facebook GBP 500,000 for breaches of data protection laws. The fine is the maximum amount allowed under current legislation. Denham indicated that Facebook failed to safeguard people’s information and had not been sufficiently transparent about how data on its platform was harvested by third parties. Facebook will be given a chance to respond to the Information Commissioner’s findings before a final decision is made. Denham’s report also indicated that Cambridge Analytica’s parent company SCL Elections would face criminal prosecution for failing to respond to the regulator’s enforcement notice. Additionally, Denham said that eleven political parties will be sent warning letters compelling them to audit their data protection practices.
- U.S. CFTC awards USD 30 million to whistleblower: The U.S. Commodity Futures Trading Commission announced on Thursday that it awarded a whistleblower USD 30 million in its biggest-ever award. No information was released about the whistleblower or what type of misconduct the whistleblowing action pertained to. The CFTC said that the whistleblower had “voluntarily provided key original information that led to a successful enforcement action.” This award is the fifth under the organization’s enforcement program and the first since August 2016. The previous biggest award of USD 10 million stems from April 2016.
- Odebrecht enters into new leniency deal with Brazilian prosecutors: Odebrecht, the construction firm at the center of the expansive Operation Car Wash investigation accused of paying billions of dollars to win lucrative contracts from firms around the world including state-owned Petrobras, entered into a new leniency with Brazilian authorities this week. The agreement includes a fine of USD 716 million, but the amount will be taken from the USD 2.39 billion the company agreed to pay in settlements last year to U.S., Brazilian, and Swiss authorities. While the agreement last year already shielded Odebrecht from prosecution, the new agreement adds additional legal protections for the company. The new leniency deal should make it easier for Odebrecht to pursue public contracts again.
- Swiss prosecutors say Malaysia’s 1MDB development fund used as Ponzi scheme: Switzerland’s top prosecutor announced this week that Swiss authorities are now investigating six people for their involvement in the 1MDB scandal. 1MDB has become a hot topic in Malaysian politics; allegations have surfaced that billions of dollars in irregular transactions intended to pay bribes and enrich the conspirators were made using the development fund. Former Malaysian Najib Razak was charged over his role in the affair last week. Swiss prosecutors are now investigating how billions of dollars earmarked for economic development ended up in Swiss banks for the personal enrichment of those under scrutiny. Two Swiss banks, Falcon Private Bank and BSI SA are being investigated for the role they played in the scheme.
- Pakistan’s former Prime Minister Nawaz Sharif Sentenced to 10 years of imprisonment: After a series of delays, Pakistan’s National Accountability Bureau (NAB) convicted former PM Nawaz Sharif on corruption charges related to the purchase of four luxury flats in London. Sharif was sentenced to 10 years in prisonfor “owning assets beyond income” and faces another year, to be served concurrently, for not cooperating with the NAB. The former PM was in London at the time and was thus sentenced in absentia. Sharif has maintained that he is innocent and has said he will return to Pakistan to appeal the charges. Sharif’s daughter also received a 7-year sentence for abetting in the crime.
- Romania’s President fires chief anti-corruption prosecutor: Romania’s President Klaus Iohannis fired the country’s chief anti-corruption prosecutor Laura Codruta Kovesi after the country’s constitutional court declared that Iohannis was obliged to follow the request of the Justice Ministry to remove her. Since Kovesi’s tenure which started in 2003, conviction rates of corrupt politicians and civil servants, including high-ranking ministers, have gone up significantly, drawing praise from Brussels as well as from many Romanians. The assault on Kovesi triggered street protests in Romania throughout the winter. Kovesi has been facings attacks by the ruling party, who have repeatedly accused her of carrying out a political witch-hunt. The Justice Ministry is due to select a successor by the end of July.
- Swiss government report finds anti-corruption measures inadequate: The Swiss Federal Audit Office (SFAO) published a report finding that measures to tackle corruption by Swiss federal officials and department are inadequate and must be improved. The anti-corruption working group of the Swiss cabinet, which was set up ten years ago, operates on a part-time basis and its members are not experts in fighting corruption, the SFAO said. Moreover, the working group was found to lack independence, budget, authority, and the required visibility to achieve its objectives. The SFAO called for a new independent office to be established to share information about possible corruption cases.