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Daily Compliance News

Daily Compliance News: October 8, 2024 – The National Security Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • NYC Mayor Adams indictment has National Security issues. (Gothamist)
  • Victims of Allen Stanford fraud may get paid. (NYT)
  • Trial of Mike Madigan kicks off. (Chicago Tribune)
  • Trial of SFO staffers put on hold for settlement talks. (City AM)

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10 For 10

10 For 10: Top Compliance Stories For The Week Ending October 5, 2024

Welcome to 10 For 10, the podcast which brings you the week’s Top 10 compliance stories in one podcast each week. Tom Fox, the Voice of Compliance, brings to you, the compliance professional, the compliance stories you need to be aware of to end your busy week. Sit back, and in 10 minutes hear about the stories every compliance professional should be aware of from the prior week.

Every Saturday, 10 For 10 highlights the most important news, insights, and analysis for the compliance professional, all curated by the Voice of Compliance, Tom Fox. Get your weekly filling of compliance stories with 10 for 10, a podcast produced by the Compliance Podcast Network.

  • CEOs turning to pods. (FT)
  • Francis Haugen says we need more whistleblowers. (WSJ)
  • Britain to give banks a new tool to fight fraud. (Reuters)
  • Cheat at home, cheat at work? (Bloomberg)
  • SEC head of enforcement to step down. (WSJ)
  • The ghost of Odebrecht lives on. (WSJ)
  • Where do you find modern slavery? At a McDonald’s in the UK.    (BBC)
  • Hearing on Boeing/DOJ guilty plea set. (Reuters)
  • SEC fines 11 more firms for failures in messaging apps.  (SEC Press Release)
  • Adams’s Lawyers Ask Judge to Dismiss Federal Bribery Charge. (NYT)

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Daily Compliance News

Daily Compliance News: October 3, 2024 – The Gurbir Grewal Steps Down Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • SEC head of Enforcement to step down. (WSJ)
  • New paths to CPA license emerge. (WSJ)
  • The ghost of Odebrecht lives on.  (WSJ)
  • FIs and FLs on common ground in compliance. (PYMNTS)

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Daily Compliance News

Daily Compliance News: September 17, 2024 – The $100+$106MM Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

  • First Energy pays $100MM to settle SEC charges. (WSJ)
  • Walgreens to pay $106.8MM for allegations of overbilling.  (WSJ)
  • TikTok faces tough questions from the Court of Appeals. (Reuters)
  • 2 Ex-NYFD chiefs charged with bribery. (Bloomberg)

For more information on the Ethico Toolkit for Middle Managers, available at no charge, click here.

Check out the full 3-book series, The Compliance Kids on Amazon.com.

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Daily Compliance News

Daily Compliance News: June 12, 2024 – The Russian Timber Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • Russian timber and export control. (WSJ)
  • What happens when the Rule of Law dies out? (FT)
  • Uribe says Menendez was ‘all in’ on bribery and corruption. (WaPo)
  • U.A.W. Monitor Investigates Accusations Against Union Leader (NYT)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Sunday Book Review

Sunday Book Review: April 21, 2024 Books on Bribery Edition

In the Sunday Book Review, Tom Fox considers books that would interest the compliance professional, the business executive, or anyone who might be curious.

It could be books about business, compliance, history, leadership, current events, or anything else that might interest me.

In today’s edition of the Sunday Book Review, we look at some of the top books on compliance you should read in 2024.

  • Fool Me Once by Kelly Richmond Pope
  • Kickback-Exposing the Global Corporate Bribery Network by David Montero
  • Guilty Admissions by Nicole LaPorte
  • Barons by Austin Frerick

For more information on Ethico and a free White Paper on ROI for your compliance program, click here.

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Blog

The Trafigura FCPA Enforcement Action – Part 2 – The Bribery Schemes

We continue our exploration of the resolution of the FCPA enforcement action involving the Swiss trading firm G Trafigura Beheer B.V. (Trafigura), an international commodity trading company with its primary operations in Switzerland. The company pleaded guilty and will pay over $126 million to resolve an investigation stemming from the company’s corrupt scheme to pay bribes to Brazilian government officials to secure business with Brazil’s state-owned and state-controlled oil company, Petróleo Brasileiro S.A. Petrobras (Petrobras). The matter was resolved via a Plea Agreement. Information detailing the company’s conduct was also issued.

According to the Information, between approximately 2003 and 2014, Trafigura and its co-conspirators paid bribes to Petrobras officials in order to obtain and retain business with Petrobras. Beginning in 2009, Trafigura and its co-conspirators, who met in Miami to discuss the bribery scheme, agreed to make bribe payments of up to 20 cents per barrel of oil products bought from or sold to Petrobras by Trafigura and to conceal the bribe payments through the use of shell companies, and by funneling payments through intermediaries who used offshore bank accounts to deliver cash to officials in Brazil. The meeting in Miami created US jurisdiction for the FCPA violations.

While at first blush, the bribery schemes appear to be similar to FCPA violations from time immemorial, there are some interesting aspects that will inform how a compliance professional can learn new lessons from this enforcement action. These factors include corrupt actors, internal funding of the bribes from locations literally across the globe, and the potential conflicts of interest in hiring employees of customers prone to bribery and corruption.

Funding the Bribery Schemes

Unlike fraud, which is the theft of money, property, or goods from a company, bribery is the theft of money from a company to pay someone else. Hence, there must be a way for those involved in corruption to create a pot of money to pay bribes. It can be simply cheating on your expense accounts, hiding costs in marketing, or making fraudulent charitable donations. But in Latin America and specifically in Brazil, one of the most favored ways to do so is to bake the bribe directly into the contract sales price. Unfortunately, this makes bribe funding one of the most difficult to detect. That is what was done in the Trafigura case.

According to the Information, “Beginning in 2009, TRAFIGURA BEHEER B.V. and its co-conspirators agreed to make bribe payments of up to 20 cents per barrel of oil products bought from or sold to Petrobras by TRAFIGURA BEHEER B.V. and its subsidiaries and affiliated entities, and to conceal the bribe payments through the use of shell companies.” [emphasis supplied] What is the price of a barrel of oil on any trading market, spot or long term? It can vary quite widely, and during the time of the bribes paid in this matter, it vacillated between $55 to $90 per barrel. It would be more than difficult for any compliance officer to look at a trading contract and pick up this amount as an anomaly.

Additionally, executives at Trafigura and corruption traders at Petrobras pre-arranged the oil trading prices rather than letting the market determine them. The Information noted, “The Trafigura Executive 2 and Brazilian Official 1 agreed to prices for trades of oil products and bribe amounts for each trade. After the price had been determined,  Trafigura Executive 2 instructed Trafigura traders to engage in negotiations with Petrobras, which Trafigura Executive 2 knew to be a sham, in order to arrive at the pre-agreed price.” [emphasis supplied]

The next step was to internally fund the bribe payments through other Trafigura business units, where no one could connect the dots. It came about when one of the two corrupt Trafigura executives involved in the bribery scheme was transferred to run the company’s Singapore business unit. From there, this executive had a corrupt third party in Hong Kong bill the Singapore business unit for non-existent consulting services related to the Chinese market to the tune of $500,000. This money funded additional bribes to corrupt Petrobras employees. This same mechanism was used multiple times to add to the 20 cents per barrel surcharge being paid directly by Petrobras.

Corrupt Employees

There are a couple of other points of note about these bribery schemes. As noted above, there were two corrupt Trafigura executives called out in the Information. (Monikered as Trafigura Executives 1 & 2) Yet, according to the Information, there were other Trafigura executives who either knew about or approved the bribe payments, but they were not further identified in the Information. Trafigura Executive 2 initially worked under Trafigura Executive 1 but later became the head of the Singapore business unit. Clearly, he took corruption with him when he moved from Brazil to Switzerland (the home office) and then to Singapore. This is yet another data point that compliance officers need to assess.

One other point from this matter. Trafigura hired the first corrupt Petrobras employee after he left that company. Once again, compliance needs to figure out a way to become aware of such hires. It was clearly done to pay off this employee and to further the ongoing bribery scheme.

Join us tomorrow for a discussion of Trafigura’s response.

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Daily Compliance News

Daily Compliance News: March 27, 2024 – The $135K and a Wig Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee and listen to the Daily Compliance News.

All from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • Corruption drives trafficking in Southeast Asia. (Al Jazeera)
  • South African Speaker of Parliament charged with corruption. (WaPo)
  • A former head of the China Football Association was jailed for life for corruption.  (ESPN)
  • A witness alleges there are tapes of Hungarian corruption. (AP)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Daily Compliance News

Daily Compliance News: March 21, 2024 – The Off Channel Communications Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee and listen to the Daily Compliance News. All from the Compliance Podcast Network.

Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • More CFTC fines for messaging app violations. (WSJ)
  • $12 bank fraud in Vietnam. (FT)
  • Money laundering of $6.3bn fraud in UK.  (AML Intelligence)
  • Will the Supreme Court legalize bribery? (The Lever)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Daily Compliance News

Daily Compliance News: March 7, 2024 – The Forced Labor Slow Porsche Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

In today’s edition of Daily Compliance News:

  • Forced labor and Porsches.  (WSJ)
  • Bribery acquittal in London. (FT)
  • The SEC approves weakened climate reporting rules. (NYT)
  • The Hotel California criminal trial was dismissed. (Bloomberg)

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.