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, facebook faces new antitrust lawsuits. Read the full story and more news below:
Facebook Hit With Antitrust Lawsuits:
The U.S. Federal Trade Commission (FTC) and 46 states announced two twin antitrust lawsuits against social media giant Facebook. Facebook is accused of distorting market competition by purchasing smaller rival firms such as Whatsapp and Instagram in 2012 and 2014. According to U.S. authorities, Facebook has abused its market position to crush smaller rivals, denying customers the benefit of competition in a ‘buy or bury’ strategy. Legal commentators stated that while a potential break-up of the company into separate entities is possible, that prospect is highly unlikely as the acquisitions took place six or eight years ago. Facebook’s general counsel dismissed the lawsuits as ‘revisionist history’ saying antitrust laws were not created with the purpose of punishing successful companies.
Swiss Trading Giant Pays Over USD 135 for FCPA Violations:
The U.S. branch of Swiss energy trading giant Vitol Inc. settled FCPA charges for USD 135M with the U.S. Department of Justice (DOJ). Vitol, which entered a three-year deferred prosecution agreement with the DOJ, is accused of bribing officials in Mexico, Ecuador, and Peru to obtain improper advantages. Vitol paid the bribes using shell companies and created fake invoices and email accounts to transfer the bribes to offshore companies. In a related enforcement action, Vitol agreed to pay USD 12.7M and a civil penalty of USD 16M to the Commodity Futures Trading Commission (CFTC) for market manipulation using corrupt practices.
Largest Norweigan Bank Faces AML Compliance Fine:
Norway’s largest lender DNB is facing a potential penalty of USD 45.5M (NOK 400M) for anti-money laundering (AML) failures. Norway’s financial watchdog FSA criticized the bank’s inadequate compliance procedures after conducting its yearly AML inspection. If convicted, the bank could pay Norway’s largest ever compliance penalty. The warning comes a year after DNB was involved in the ‘Fishrot’ scandal in which the bank was accused of money laundering. In this instance, DNB clarified that the allegations did not relate to the bank laundering assets, but rather to potential compliance failures.
SEC Announces Multiple Whistleblower Awards for USD 3M:
The U.S. Securities and Exchange Commission announced whistleblower awards worth almost USD 3M to five different individuals in three separate enforcement actions. The first award of USD 1.8M was handed to an individual that gave ‘extraordinary assistance’ which led to the return of money to investors. In the second SEC order, the agency gave USD 750,000 to two whistleblowers for their substantial assistance in a case. As for the third award, the SEC gave USD 400,000 to two individuals whose analysis prompted a new investigation that eventually led to successful enforcement action.
EU Adopts ‘Magnitsky Act’ Enabling Human Rights Sanctions:
The European Council announced on Monday, December 7th, the rolling out of a new global human rights sanctions regime seeking to freeze assets and impose travel bans on entities and individuals involved in human rights abuses, including corporations. Similar to the U.S. Magnitsky Sanctions, applicable to entities that have committed genocide, crimes against humanity, and human rights abuses extra-jurisdictionally. The new European law would freeze the assets of individuals and entities found to be implicated in human rights abuses and also forbids the EU from making funds available to sanctioned individuals.
Defense Bill Proposes New AML Whistleblower Program:
In a new proposal for the U.S. annual-defense spending plan, a new whistleblower hotline program incentivizing reports on anti-money laundering violations was introduced for the 2021 fiscal year. Under the proposed rules, whistleblowers would be awarded up to 30% of incurred monetary penalties if enforcement actions were successful thanks to the information they provided on AML violations. Congress is expected to vote on the new National Defense Authorization Act as soon as this week. The new program, which would be administered by the U.S. Treasury Department and the DOJ, would also offer whistleblowers protection against retaliation.
Indonesian Minister Accused of COVID-19 Related Bribes:
Indonesia’s social affairs minister was accused by Indonesia’s Anti-Corruption Commission of receiving USD 1.1M worth in bribes related to COVID-19 aid. The bribes were part of a USD 65BN economic stimulus for the Indonesian economy. The agency announced its investigation into Juliari Batubara is still ongoing, however, the accusations represent another blow to the current administration which has already been accused of corruption.