This Week in Compliance

This Week In Compliance: U.S. Regulators Reportedly Approve USD 5 Billion Settlement with Facebook

Top Story

  • U.S. Regulators Reportedly Approve USD 5 Billion Settlement with Facebook: The U.S. Federal Trade Commission (FTC) approved an approximately USD 5 billion settlement with Facebook last week over its investigation into the company’s handling of user data. The probe focused on whether the company had violated a 2011 consent agreement between Facebook and the FTC by allowing information belonging to 87 million users to be inappropriately shared with now-defunct political consulting firm Cambridge Analytica. The FTC is expected to impose restrictions on Facebook’s ability to use its users’ data. The settlement, if finalized, will represent the largest fine ever paid to the FTC. However, powerful Democratic lawmakers have said that the penalty is too low to affect the firm. Shares in Facebook closed up 1.8% following the release of the news. READ MORE 

Business

  • World Bank debars American company for collusive practices: Entrust Datacard Corporation (EDC) was debarred by the World Bank on Wednesday for 12 months for “collusive practices” involving a national ID project in Bangladesh. This means that the company will be ineligible to participate in World Bank-financed projects for 12 months. EDC accessed and changed confidential draft bid specifications related to a bid to provide personalization machines used in ID card production. EDC has acknowledged responsibility for the actions, made voluntarily remedial actions and cooperated with the World Bank investigation. The debarment is not eligible for cross-debarment by other development banks as the duration of the debarment does not exceed a year.
  • Swiss airplane builder Pilatus facing Indian corruption allegations: The Indian Air Force canceled its deal to buy 75 training planes for Swiss Pilatus after reports of corruption and irregularities emerged. India’s Central Bureau of Investigation accuses the company of “paying over USD 51 million in kickbacks” to a defence consultancy firms that helped secure a contract nearly USD 500 million. Pilatus has not answered media inquiries regarding the allegations but has previously stated that the “alleged kickbacks have been a subject of repeat discussion in the Indian media.”
  • Colombian judge issues extradition order for American oil executive: A Colombian judge has requested the extradition of an American oil executive who has reportedly been involved in one of the biggest corruption scandals in Colombia. Masoud Deidehban, who was the former manager of Chicago Bridge and Iron (CB&I), is being accused for embezzling USD 2 million dollars that were originally meant to be used for the modernization of a Colombian state-run oil company, Ecopetrol. CB&I was hired by Ecopetrol for the upgrading of a plant in Cartagena which ended up costing three times as much as it was estimated originally in 2013, due to price inflation calculated by the project managers of the project. Deidehban’s case has also been raised to Interpol by the Colombian Prosecutor’s Office.

Government

  • Dutch police sinks into crime, cleanup begins: The Dutch police has begun a major internal cleanup, which led to the arrest and dismissal of dozens of police officers for breaches in official secrecy and findings of corruption. One of the dismissed officers was a senior member of the police in Utrecht that was found to be connected to a gang led by Ridouan Taghi. The senior police official, who was removed from his position two weeks ago, had allegedly accepted bribes from the gang in exchange for classified information related to specific persons relevant to the gang. Two other cases of dismissal involved three officers in Limburg for potential corruption. While the investigation continues, the country’s general Police Union has stated that the police needs to show greater resilience towards criminal influences.
  • Russian pension fund officials admits bribery: A senior official of Russia’s national pension fund, Alexei Ivanov, admitted to having accepted bribery from an IT company in exchange for rigging a bid in favor of the company. Ivanov was arrested on Wednesday and immediately resigned from his position at the Russian Pension Fund. The Russian Investigative Committee interrogated Ivanov upon his arrest after which he admitted receiving nearly USD 70,000 to act in favor of the Russian IT integrator Technoserv Management LLC. The former public official is facing up to 15 years in prison as well as a fine.
  • Alejandro Toledo, Peru’s ex-president arrested on corruption charges: Following an extradition request from his home country, Alejandro Toledo, Peru’s former president from 2001-2006, was arrested for alleged corruption charges. Toledo fled from Peru when it was found he allegedly received USD 20 million from Brazilian construction giant Odebrecht. Three other former Peruvian presidents including Alán García, who shot himself in the head to avoid arrest in April, have been entrenched into the Odebrecht scandal. Toledo’s lawyer denied all corruption charges and stated that the defense process will center around the ex-president’s alleged political persecution in Peru.
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