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, there is a rise in tech company whistleblowers and experts say we'll only see more. Read the full story and more news below:
Top Story
More Tech Whistleblowers Are Coming, Experts Say
With the rise of the whistleblower in the public consciousness recently, in part due to former Facebook employee Frances Hagen’s allegations against the social media giant, whistleblower attorneys are expecting a rise in other tech company employees coming forward with their own concerns. Attorneys that work closely with whistleblowing issues say that they are already seeing an increase in those reports coming forward. Experts say that when employees see examples of other whistleblowers, they may feel empowered to come forward as well.
Government
Deutsche Bank Whistleblower Awarded USD 200M Payout
A whistleblower was awarded USD 200M for tips that helped lead to more than USD 2.5B in settlements by Deutsche Bank, stemming from allegations that they manipulated interest rates. These false interest rates influenced the price of billions of dollars of derivatives, allowing banks to profit off of these price movements. The payout is the largest ever by the Commodity Futures Trading Commission (CFTC).
Colombian ‘Gulf Cartel’ Leader Arrested
Colombian authorities arrested Dairo Antonio Úsuga David, also known as “Otoniel”, over the weekend. He was the leader of a well-known cocaine trafficking organization. President of Colombia, Ivan Duque says that the arrest is “the most forceful blow that has been inflicted on drug trafficking in this century and is only comparable to the fall of Pablo Escobar in the 90s.” Otoniel was wanted by both U.S. and Colombian authorities for his involvement and leadership in the organized crime group the ‘Gulf Cartel’.
US Defense Contractor Faces Trial for Bribery
Frank S. Rafaraci, the CEO of major U.S. defense contractor Multinational Logistics Services, arrived in the U.S. this week to face trial for bribery. Rafaraci allegedly bribed Navy officers to sign contracts worth nearly USD 1.3B for services provided by his company to Navy ships, including restocking and refueling the vessels. Through a combination of bribery, false invoices and money laundering, the U.S. Department of Justice said that Rafarci “cheated the U.S. taxpayer and wasted tremendously valuable resources”. He is facing up to 15 years in prison.
Business
Facebook Knew About Human Trafficking Problem ‘For Years’, Issues Still Remain
Internal documents released to the U.S. Securities and Exchange commission show that Facebook has known for years about human traffickers using its platforms to sell women into human slavery and domestic servitude. The documents show that women were trafficked and had their passports and identifying information stolen, preventing escape. Facebook asserts that they have consistently combated the problem, but as of last week, CNN was able to use terms defined in the leaked documents to find active human trafficking accounts on both Facebook and Instagram.
Huawei Linked to Offshore Serbian Telecom Contracts
Documents leaked in this month’s release of the Pandora Papers found secret contracts between Chinese telecom giant Huawei and Serbian state telecom companies. Huawei’s attempt to gain influence and win large contracts in Serbia saw the company making secret papers through offshore bank accounts to Serbian telecom officials. Offshore payments are currently viewed by experts as a key indicator of corruption. Payments made to the officials by Huawei were billed as ‘consultancy’.
‘Killware’ Next Big Global Cybersecurity Threat, DHS Says
U.S. Department of Homeland Security Secretary Alejandro Mayorkas told USA Today that ‘killware’, a type of malware that can disrupt and cause harm to physical environments, could be the next big global cybersecurity threat. Mayorkas cites the disruption of a water treatment facility in Oldsmar, Florida as a ‘prototype’ of what killware might look like. In that case, hackers were able to access the facility’s controls and raise the level of lye (a purification chemical harmless in small quantities) to unsafe levels. This year, ransomware attacks disrupted supply chains globally.