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 we cover Juniper Network’s settlement with the U.S. SEC on FCPA charges for USD 11.7 million. Read the full story and more news below:
Juniper Network Settles FCPA charges for USD 11.7 Million:
The SEC announced on Thursday that Juniper Networks paid the commission USD 11.7 million to settle FCPA offenses related to its practices in Russia and China. Between 2008 and 2013, employees of Juniper’s Russian subsidiary, JNN Development Corp. (JNN), made secret agreements with third parties to increase the discounts on sales without passing those onto customers. These off-the-book funds were referred to as “common funds”, which were used for, among others, travel for foreign officials to places where there was no Juniper business to conduct. The investigation was first disclosed in an SEC filing in August 2013. READ MORE
U.S. federal probe into union corruption expands to General Motors:
A probe into the misuse of millions of dollars in training center funds by Fiat Chrysler executives & United Auto Workers (UAW) has now expanded to General Motors. Michael Grimes, a former senior official at GM is being charged for laundering money and wiring fraud for allegedly receiving USD 2 million in bribes from UAW vendors. It is alleged that the funds involved in the bribery scheme were originally meant to be used in the Center for Human Resources for the training of hourly employees. GM called that allegations against Grime “deeply disturbing” and stated it is fully collaborating with the DOJ’s investigation; a guilty plea hearing is expected to take place on September 4th. The probe, which has been ongoing for several years has already led to the conviction of eight executives and officials from Fiat and UAW.
Accounting firm RSM charged with independence rule violations:
The SEC charged the U.S. arm of global accounting firm RSM international with violating the commission independence rules with regards to over 100 reports done for 15 or more clients. The charges were settled by the firm for a penalty of USD 950,000 while the firm neither admitted nor denied the findings. The SEC said the violations related to RSM US providing non-audit services to audit clients, which included secretarial services, loaning staff, internal audit outsourcing, among others. The commission also said that RSM US’s independence controls were inadequate, resulting in the violations. Violations took place between 2014 and 2015.
Hungarian prosecutors open new Microsoft fraud case:
Software giant Microsoft agreed to pay a USD 25 million fine to settle bribery charges with the U.S. DOJ in late July. Hungary’s Central Prosecutor’s Office has now opened a new investigation into the matter after it said it had received additional criminal complaints related to the case. The Hungarian authorities have also asked the DOJ to share all relevant information in order to start a new investigation.
Irish corruption law not in compliance with OECD guidelines:
The anti-corruption law Ireland adopted in 2018 in the face of an increasing international drive to oust corruption globally, has been found not to be in compliance with OECD guidelines. The Criminal Justice Act 2018 criminalizes foreign corruption by both Irish businesses and government officials and has a clause requiring the offense to be a crime in both jurisdictions where the bribe allegedly occurred. The former requirement referred to as ‘dual criminality’ was found not to be in compliance with article 1 of the OECD’s 1997 Convention on Combating Bribery of Public Officials in International Business. While the Irish law is to be reviewed by the OECD in October, a spokesperson from the Irish Ministry of Justice has stated that Ireland will consider fully any recommendations from the OECD working group but will only be able to comment on the Irish law further after the review.
India’s former Finance Minister arrested in corruption case:
Palaniappan Chidambaram, India’s former Minister of Finance was arrested this week for suspicions of money laundering. Chidambaram, who is a member of the opposition party in congress, has dismissed the allegations and attributed them to a purported defamation campaign led by the current Prime Minister. Chidambaram was the Minister of Finance for two terms (2004-2008 & 2012-2014) and is being accused of abusing his position by engaging in the laundering of tens of millions of dollars coming from foreign direct investments. After the former minister was arrested, he applied for an arrest exemption at the Delhi High Court which was later rejected. After Chidambaram was taken into custody, his legal representatives sought an appeal from the country’s Supreme Court, the hearing will take place this Friday.
Fight against top-level corruption is needed, says OECD:
A report by Europe’s Group of States against Corruption (GRECO) cites systemic weaknesses in Slovakia’s legal framework to combat corruption. The main area of weakness that was highlighted in the report was the lack of integrity standards and rules for top government officials including ministers, secretaries and political advisors. Increasing the transparency of top officials in government was strongly advised by the working committee which stated gifts and contacts with lobbyists should be duly registered and made publicly available. GRECO’s investigation comes a year after the murder of the journalist Ján Kuciak, who uncovered information about corrupt connections between several businessmen and state bodies. The revelations sparked mass protests and led to the eventual resignation of the Prime Minister in 2018.