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SEB Fined USD 107 Million for AML Violations

By GAN Integrity (Updated )

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 SEB is fined USD 107 million for AML violations.  Read the full story and more news below:

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SEB Fined USD 107 Million For AML Violations:

Sweden's financial watchdog, Finansinspektionen, levied a SEK  1 million  (USD 107.3 million) fine on SEB (Skandinaviska Enskilda Banken) for money laundering violations related to their Baltic operations. The investigation, which started last year, included significant cooperation with Baltic authorities. According to the regulators, SEB did not have appropriate anti-money laundering governance systems in place which resulted in compliance failures with rules on monitoring business relationships and transactions in Estonia, Lithuania, and Latvia.  Finansinspektionen also stated that SEB's Baltic operations served clients with high-risk profiles, which were exacerbated by the risk level of the geographical locations as well as the composition of the subsidiary’s banks’ customer relationships. SEB was given a year to ramp up compliance efforts and improve transaction-monitoring systems. 


SEC Charges Alexion Pharmaceuticals With FCPA Violations:

The U.S Securities and Exchange Commission (SEC) announced that Boston-based pharmaceutical firm Alexion Pharmaceuticals Inc. will settle FCPA charges for USD 21 million. According to the order, Alexion's Russian and Turkish subsidiaries paid bribes to foreign officials in exchange for the favorable regulatory treatment of their drug, Soliris. The company also violated the FCPA's book-keeping standards by keeping false records of the payments in Turkey and Russia and by directing third parties to create inaccurate financial records in the Colombian and Brazilian subsidiaries. Alexion did not deny or accept any of the allegations but agreed to pay the penalty.

Novartis To Pay USD 678 Million Settlement:

After settling FCPA allegations with U.S. authorities last week, the Swiss pharmaceutical group Novartis has agreed to pay a total of USD 642 million in three separate settlements over corruption allegations. In the latest settlement, Novartis was charged for disguising bribes to doctors in its speaker programs and promotional events from 2002 to 2011, in exchange for getting more prescriptions on the company's drugs. In another settlement with the Department of Justice (DOJ), Novartis will pay USD 51 million for using charitable foundations to pay patients who were recipients of the Medicare program, to bring prices down. As a part of the settlements, Novartis AG has agreed to new corporate integrity obligations that will be supervised by the Office Inspector General of the U.S. Department of Health & Human Services. 

Ex-Pemex Executive Extradited For Graft:

Emilio Lozoya, the former CEO of Mexican state oil firm Petroleos Mexicanos will be extradited to Mexico for corruption charges. Lozoya, who is currently under detention in Spain, is being accused of money laundering and bribery involving Odebrecht, the Brazilian construction giant. The former executive left Mexico when he received information that a case was being compiled against him. After eight months of searching for him in Russia, Germany, the U.S., France, Italy, and Russia, he was arrested in April in Spain. Lozoya, who ran Pemex from 2012 to 2016, has denied all allegations and stated that he will collaborate with authorities on the case. 

Government Closes Bribery Probes Into Usana Health's China Operations:

The U.S. Securities and Exchange Commission (SEC) closed a bribery probe into Usana Health's Chinese operations. After concluding the case, the company voluntarily took several steps to remediate non-compliance with the FCPA in China. The marketer of nutritional and personal-care products stated that they ran an internal probe on potential corruption in 2017, and terminated employees whose conduct may have been in violation of the FCPA. Usana also enhanced its global compliance program and revised its internal accounting controls. 


Former French Prime Minister Sentenced to Prison on Corruption Charges:

François Fillon, France's former Prime Minister, was sentenced to five years in prison and fined EUR 375,000 (USD 421,000) after having been found guilty of embezzling public funds and of using his position to fund phony jobs for his family.  According to the court's indictment, Fillon, who served as PM under Sarkozy's government, employed his wife and his two children while serving in parliament. The former PM and his lawyers have denied all allegations and stated that they will appeal the ruling. According to French law, Fillon is not required to serve his sentence until the appeal is heard. 

U.S. Seeks to Recover Approximately USD 96 Million Traceable to Funds Allegedly Misappropriated from 1MDB Fund:

The U.S. Department of Justice (DOJ) announced the forfeiture of another USD 96 million of funds traced back to Malaysia's Sovereign Wealth Fund (1MDB). The assets were connected to the fund's 2012 and 2013 bond offerings and include artwork by Andy Warhol, luxury real estate property in France, and bank accounts in Switzerland and Luxembourg. To date, the U.S. has contributed to the retribution of USD 1.1 billion in assets embezzled from the 1MDB fund by high-ranking Malaysian public officials. 

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