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This Week in Compliance: U.S. regulator awards whistleblowers USD 45 million

By GAN Integrity

Here’s what's been going on in the compliance world this week: 


  • U.S. regulator awards whistleblowers USD 45 million: The U.S. Commodity Futures Trading Commission (CFTC) announced late last Thursday that it had awarded whistleblowers over USD 45 million for helping the CFTC identify improper conduct. The agency says that the dramatic increase in payouts this year is evidence that the agency is receiving more tips. No information was released about the related conduct and how many whistleblowers shared the award, since information that may release their identity is protected. Under the CFTC’s whistleblowing program, whistleblowers can receive between 10 and 30 percent of any monetary sanctions that stem from their tips. In the last month, the CFTC has granted three different awards totaling over USD 75 million.
  • Walmart bribery case in stalemate over admission of misconduct: Walmart Inc., the retail giant, set aside nearly USD 300 million last fall in anticipation of a resolution of a years-long probe into allegations of international bribery. Reports this week indicate that the company and prosecutors are locked into a stalemate over the prosecutor’s insistence that any settlement contains an admission of misconduct by Walmart. The allegations concern bribery of officials in Mexico, India, and China in exchange for help in gaining approval to open stores in those countries. The company has said that it has spent over USD 900 million so far on the investigation, which includes a global overhaul of compliance systems.
  • Denmark opens probe into Danske Bank money laundering allegations: Prosecutors in Denmark indicated that they are opening a criminal investigation into allegations that the bank’s Estonian unit was used to launder billions of kroner of dirty money. It is alleged that over USD 8 billion in illicit funds from Russia, Moldova, and Azerbijan were laundered using Danske’s Estonian operations. The Danish prosecutor indicated it is too early to tell whether charges will be filed. Analysts have said potential fines could range from USD 4.7 billion to as low as USD 315 million or no fine at all. Danske Bank has said that it will cooperate with prosecutors.
  • Wells Fargo to pay USD 2.09 billion fine for conduct related to mortgage loans: U.S. bank Well Fargo was hit with a civil fine of USD 2.09 billion this week by the U.S. Department of Justice for the sale of residential mortgage loans in the run-up to the financial crisis that the bank knew contained misstated income information and did not meet the quality that Wells Fargo represents. The loans included risky so-called subprime mortgages. The mortgages were then packaged into securities and subsequently defaulted. The bank paid a USD 1 billion fine earlier this year for abuses in its auto insurance and mortgage lending business.


  • Former Argentinian Vice President convicted of corruption: Former Vice President of Argentina, Amado Boudou, was sentenced to six years of imprisonment and banned from holding public office for life on Tuesday. Boudou served under former President Cristina Kirchner between 2009 and 2015. The charges specifically relate to an attempt by Boudou to buy Ciccone Calcografica, a company that printed currency. Boudou was found guilty of attempting to lift a bankruptcy declaration against the company in return for a 70 percent share in the business. In addition, five other businessmen were convicted in relation to the case. These include the former owner of Ciccone and Argentina’s former representative to the World Bank.
  • Former Barbados Minister charged with laundering bribes in the U.S.: Federal prosecutors said on Monday that former minister of industry for Barbados Donville Inniss has been criminally charged with laundering bribes he received from a Barbadian insurance company. Prosecutors allege that in 2015 and 2016, Inniss took a total of USD 36,000 in bribes from the insurance company in exchange for help in obtaining government contracts. The payments were disguised by routing them through a dental company and a bank in New York State. Inniss has been released on bail.


  • UN must improve whistleblower protections: An independent oversight body said this week that the United Nations agencies must improve ways for staff to report harassment, retaliation, and other forms of misconduct. In addition, whistleblower protections were found to need improvement. In several high-profile cases, UN bodies failed to meet the high standards of conduct and accountability that the agencies represent. A survey found that 53 percent of staff members who witnessed wrongdoing had not made a report, with many citing a lack of trust that their confidentiality would be fully respected. The report states that none of the UN bodies fully meet all five best practice criteria set out.

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