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:
Top Story
Facebook Anticipating FTC Fine of Up To USD 5 Billion:
Facebook said this week that it expects a fine of up to USD 5 billion from the U.S. Federal Trade Commission (FTC) for privacy violations. The social media giant disclosed the information in its quarterly financial results, saying it estimating the one-time charge to be between USD 3 billion and USD 5 billion, but it cautioned that the matter remains unresolved and no guarantees about the timing or terms of any outcome can be given. The investigation relates to claims that the company violated a 2011 privacy consent decree. Facebook promised in 2011 to protect its users' privacy after an inquiry had found that its handling of data had harmed consumers. The FTC opened a new investigation into Facebook after the company came under fire following the revelations that Cambridge Analytica, a British political consulting firm, harvested users’ data without their consent for the purpose of building voter profiles. The social network also suffered a data breach last year affecting nearly 50 million users.
Business
The U.K.'s Financial Conduct Authority considers publishing more information on ongoing investigations:
In a report published Wednesday, the U.K.’s top financial watchdog, the Financial Conduct Authority (FCA), said it is considering releasing more information about ongoing investigations. The change would be a break from its current practice, as it currently only discloses investigations in limited circumstances. The regulator disclosed that it had been lobbied to either name all the firms it’s looking into or to anonymizing its warning notices. The agency has warned that changing its policies will require further consultation as it said that “opening an investigation does not mean that someone has committed misconduct”. The FCA also indicated it is not considering offering financial awards to whistleblowers, as it points to research conducted in 2014 that found no empirical evidence showing that awards improve the number of quality of whistleblower tips.
Brazilian company seeking to pay former executives to reveal details of wrongdoing:
CCR SA, the largest toll-road operator in Brazil, is seeking approval from its shareholders to pay a total of USD 18 million to 15 former executives in exchange for revealing details about the misconduct they were involved in. CCR’s CEO Leonardo Vianna has indicated he sees the proposal as the only way to move past corruption allegations that threaten the company’s core business; the argument Vianna is making is that the former executives would not have an incentive to confess to illegal acts without the payments, and that without the confessions CCR would not have been able to work out a deal with prosecutors that keeps the company from being barred from bidding on public tenders. The move has attracted much criticism, including from shareholder-advisory firms Glass Lewis and Institutional Shareholders Services Inc.
Former Nissan chief Carlos Ghosn hit with additional corruption charges:
Carlos Ghosn, the former CEO of Nissan, was hit with a fourth indictment for aggravated breach of trust by Japanese authorities on Monday. The new charges are the most serious yet: Ghosn is accused of funneling USD 15 million of Nissan’s funds to a dealership in the Middle East while siphoning off around USD 5 million for his personal use. Ghosn was released on bail before on strict conditions. Ghosn has denied all charges and insists the charges have been fabricated by Nissan executives concerned with his plans to bring the company closer to Renault, its French partner.
Government
France's former premier Francois Fillon to stand trial on corruption charges:
Francois Fillon, the former prime minister of France, is to stand trial over charges that his wife, Penelope Fillon, had been paid EUR 680,000 as a parliamentary assistant between 1986 and 2013 without working at the National Assembly. The couple’s two sons were also linked to fictitious jobs in France’s parliament between 2005 and 2007. The revelations came in January 2017, at a time where he was on course to win the French presidency, before the allegations shattered his run. Investigative judges have recommended the politician be tired on charges of embezzling public money, misuse of corporate assets, conspiracy, and failing to comply with transparency rules.
Romanian MPs approve bill that could end high-level corruption cases:
Romanian MPs approved changes to the country’s criminal law on Wednesday that would automatically shut down a number of high-level ongoing cases. One of the most significant changes approved on Wednesday shortens the statute of limitations for some corruption offenses. Lower sentences for some offenses were approved as well as decriminalization of negligence in the workplace. Opposition leaders accused the Social Democrat leader Liviu Dragnea of trying to “solve his own personal problems with justice”. The European Commission responded to the move by expressing its concerns and noting that if its concerns are not met it would “use the means at its disposal”.