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DOJ Updates Guidance on 'Effectiveness' of Compliance Programs

By GAN Integrity

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 the DOJ's latest guidance on effective compliance programs. Keep reading for this breaking story and find more news below:

Top Story

DOJ Updates Guidance on 'Effectiveness' of Compliance Programs:

The U.S. Department of Justice issued an update this Tuesday to its document stipulating how prosecutors evaluate the effectiveness of corporate compliance programs. The effectiveness of a compliance program is a key consideration for prosecutors when determining penalties imposed on companies. The new guidance is significantly longer than the original document, now measuring 18 pages versus 8 previously, as the guidance expands on previously listed topics and questions designed to give an idea of what prosecutors look for in a compliance program. Brian Benczkowski, the head of the Justice Department’s criminal division, commented on the updated guidance in Dallas on Tuesday, noting that the revised guidance is also intended to aid companies by providing deeper insight into what the DOJ demands from companies. The original document was published in February 2017 and quickly became an important reference for compliance professionals.


Microsoft makes vague FCPA disclosure:

Software giant Microsoft disclosed in a regulatory filing this week that it is cooperating with U.S. authorities in FCPA related matters. The company shied away from using the term investigation, only saying “we have been cooperating with authorities in the U.S. in connection with reports concerning our compliance with the Foreign Corrupt Practices Act in various countries.” No other details, including which countries or what the scope of the cooperation entails, were released.

Cognizant facing civil lawsuit in wake of bribery settlement:

Cognizant’s board and management, a business specializing in IT services, is facing a lawsuit from a small U.S. pension fund over allegedly misleading shareholders and corporate profligacy in the wake of settling FCPA violations for USD 25 million. The suit is one of many civil suits filed against the company in relation to the scandal; litigation has been pending in New Jersey courts for over two years, according to a Cognizant spokesperson. The company has said it spent around USD 100 million in total in fines and investigation fees, including the USD 25 million fine it paid to the Securities and Exchange Commission (SEC) earlier this year.

Whistleblowers allege bribery at pharmaceutical company that hiked drug price 97,000%:

Two whistleblowers at Questcor Pharmaceutical, now known as Mallinckrodt, allege that the company bribed doctors and their staff to increase sales of its H.P. Acthar Gel, according to unsealed documents in federal court. The whistleblowers alleged that the “multi-tiered” strategy was aimed at cheating the U.S. government out of millions of dollars. The price of the drug was increased from USD 40 in 2000 to USD 39,000 today. Allegedly, the company lied to the Food and Drug Administration and offered bribes to doctors in a culture designed to sell drugs at all costs. Mallinckrodt has stated that the allegations principally pertain to its predecessor, Questcor, and that it has been in talks with the government to reach a settlement for the past few months.


Former Malaysian Prime Minister Najib Razak fails to have corruption charges dismissed:

Najib Razak, Malaysia’s former Prime Minister has failed in his bid to have seven corruption charges against him dismissed, as his trial is about to enter its third week. Najib challenged the charges of criminal breach of trust, abuse of power and money laundering on the grounds that the charges lacked clarity which impeded the preparation of his defence. The trial is only the first of several; Najib faces a total of 42 corruption charges in relation to the beleaguered 1MDB fund. It is alleged that USD 10.3 million of the funds money made its way into Najib’s personal bank accounts.

Head of Russia's intelligence agency detained for bribery:

Russian newspaper Kommersant reported on late last week that Colonel Kirill Cherkalin, the head of Russia’s main intelligence agency, the Federal Security Service (FSB), has been detained over allegations of large-scale bribery. Cherkalin’s arrest follows the arrest of two other FSB agents last week in connection with an alleged Bitcoin extortion scheme worth USD 1 million. Details of the scheme Cherkalin was involved in have not been made public.

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