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 Big Tech faces a historical antitrust hearing, and Malaysia's former PM is sentenced to 12 years in jail for his role in the 1MDB scandal. Read these stories and more news below:
Big Tech Faces Antitrust Hearing
In a historic and partly virtual congressional hearing, four of Big Tech's most influential CEOs, Facebook's Mark Zuckerberg, Amazon's Jeff Bezos, Google owner Alphabet’s Sundar Pichai, and Apple’s Tim Cook, defended accusations of abusing market power in the U.S. House of Representatives. Even though every company faces scrutiny over different issues, the hearing was meant to draw similarities on competition problems to aid congress' Antitrust Committee draw common grounds for future legislation drafting. Among other things, congress accused Google of content theft and Facebook faced questions on the fairness of its purchase of Instagram in 2012 as well as on the neutrality of its content moderation efforts. Bezos was questioned on whether or not Amazon makes use of data sold by third-party sellers, to which he responded that the company’s policies ban this behavior. Apple CEO Tim Cook was questioned on commission changes on the App Store. The committee has stated that it is planning to publish a more detailed report on the findings of the hearing by the end of summer.
Sculptor Settles FCPA Probe for USD 136 Million:
The hedge fund Sculptor Capital Management is poised to pay USD 136 million to compensate bribery victims in Congo. The decision is related to 2016 charges U.S. authorities pressed against the company for a long-running bribery scheme where Sculptor funds were used to inappropriately influence a legal dispute over mine ownership in the DRC. Africo, the investor group, who subsequently lost control of the mine, is seeking restitution and claims that Sculptor should pay at least USD 50 million. The settlement, which marks the first time a bribery victim is compensated under the U.S. FCPA has to first be approved by the U.S. District Judge Nicholas Garaufis.
Goldman Sachs Settles 1MDB Dispute With Malaysia for USD 3.9 Billion:
Goldman Sachs has agreed to a USD 2.5 billion settlement with Malaysian authorities for its role in the 1MDB corruption scandal. The bank also committed to secure the recovery of USD 1.4 billion of the fund's stolen assets, amounting to a total of a USD 3.9 billion settlement. Goldman raised USD 6.5 billion for the 1MDB fund in three bond sales in the oil industry, of which USD 4.5 billion were misappropriated by Malaysian government officials, fugitive financier Jho Low, and two previous Goldman executives through shell companies. While the investment bank stated it expected to settle both U.S. and Malaysian investigations at the same time, Goldman is still awaiting the U.S. 's settlement and has reportedly set aside USD 1.1 billion for foreseen settlement costs.
U.K. SFO Charges Airbus Subsidiary for Corruption:
The U.K. Serious Fraud Office charged a unit of Airbus as well as its former managing director, its financial officer and part-owner of subcontractors to GPT, for corruption in Saudi Arabia. The SFO opened a probe into Airbus subsidiary GPT Special Project Management in 2012. GPT operated in Saudi Arabia and was closed this April. Jeffrey Cook, the former managing director, was also charged for receiving money for contracts when he was employed at the U.K.'s Ministry of Defence from 2004 to 2008. Terence Dorothy has been charged with aiding that offense. The SFO stated that the charges won't impact its previous settlement with the institution over other bribery charges. The case will appear in court in September.
PEMEX Ex-CEO Pleads Not Guilty in Corruption Case:
Emilio Lozoya, the former CEO of Mexican State-Owned oil firm Petroleos Mexicanos (PEMEX), was accused of taking USD 10.5 million in bribes from Brazilian construction conglomerate Odebrecht as well as of receiving an excess payment from Altos Hornos de Mexico of USD 3 million. Lozoya was arrested last February in Spain and was recently extradited to his home country and attended two online hearings in a Mexican federal court where he declared his innocence. In the Odebrecth investigation, prosecutors are alleging that he received a bribe from Odebrecht Mexico's former president which was used to fund former Mexican president Enrique Pena Nieto's presidential campaign. The bribe from Altos Hornos was allegedly used to purchase a luxury apartment in Mexico City. Lozoya stated that he is fully cooperating with Mexican authorities in both investigations.
Malaysia's Former PM Sentenced to 12 Years for 1MDB Corruption Case:
In an enforcement action that marks the beginning of the end of one of the world's largest financial scandals, Malaysian authorities have convicted former Primer Minister Najib Razak to 12 years in prison and fined USD 50 million for abuse of power. The former PM was also found guilty of money laundering and criminal breach of trust. Mr. Razak is suspected to have taken a central role in the looting of USD 4.5 million of assets from Malaysia's state-owned 1MDB fund. He allegedly received hundreds of millions of dollars unlawfully from 2009 to 2014. The former PM has denied all allegations and has announced appellation plans. Currently, Najib is awaiting a higher court to hear his appellation and has only been asked to report to a police station twice a month.
U.S. Offers USD 5 Million for Help in Arresting Venezuelan Supreme Court Chief Justice:
The U.S. is accusing Venezuela's Justice Chief Maikel Kode Moreno Perez of corruption and money laundering and is offering USD 5 million for information that could lead to his arrest. Moreno is accused of receiving bribes for favorable judicial decisions which allegedly led to the dismissal of several cases. The money was reportedly laundered through the U.S. financial system. Venezuelan authorities strongly rejected the U.S.'s posting of the bounty.
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
The DOJ updates its guidance on corporate compliance programs
Founder and former FTX CEO arrested, indicted on eight fraud charges