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.
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
In an antitrust class action suit, Visa and MasterCard’s 5.6B USD fine is still standing after the companies tried to appeal the settlement. More than 12 million retailers had accused the two payment card giants of improperly fixing debit and credit card fees. Claims that the class action suit should not have been certified because of confusion over who deserved compensation were rejected by the 2nd U.S. Circuit Court of Appeals in Manhattan. Among the objectors to the settlement were gas station operators such as Chevron and Shell, who claim to have suffered financially from accepting MasterCard and Visa for gas sales.
As former Malaysian prime minister is charged with corruption his successor creates a coalition to fight it
Former prime minister of Malaysia Muhyiddin Yassin is being charged with corruption over accusations of abuse of power over COVID-19 contracts and money laundering. He has pleaded not guilty to the charges and awaits his trial at which he could face 15 and 20 year prison sentences for money laundering and abuse of power respectively. Meanwhile, Yassin’s predecessor, Mahathir Mohamad, has expressed his hope to create a coalition to fight corruption. To do so, he has joined the small party Parti Bumiputera Perkasa Malaysia which he hopes will be supported in the struggle against corruption by other parties, NGOs and individual citizens.
Lebanese central bank chief appears before corruption hearing
Riad Salameh, chief of the central bank of Lebanon has appeared in a corruption hearing for the first time after he had refused to attend an earlier hearing as he argued that the presence of European investigators would be in conflict with Lebanese sovereignty. He faces multiple accusations, including embezzlement in separate probes within Lebanon and abroad. Investigators are examining how Salameh has amassed his wealth in three decades as chief. According to a judicial source, Salameh will be appearing “as a witness” and will not be charged or arrested during the upcoming hearing, which could entail several days of questioning.
TikTok at risk of being banned in the US if its Chinese owners don’t sell their stakes
The Biden administration is threatening the Chinese stakeholders behind social media giant TikTok with a ban in the United States if they refuse to sell their ownership stakes in the company. This demand made by the Committee on Foreign Investment in the US (Cfius), comes at a time when the social media platform is under increasing scrutiny over allegations that the app facilitates Chinese government agencies in spying on and manipulating people in Western countries. The move has faced criticism from the Republican side for not being strong enough, while TikTok itself claimed that divestment would not solve the problem, as it would not impose any new restrictions on access and data flows.
Silicon Valley Bank fails and is taken over by regulators
The Silicon Valley Bank (SVB) had been investing in a lot of “safe” assets like government-backed mortgage- and US treasury bonds, however, when interest rates rose quickly last year and their fixed interest rates did not change accordingly, these assets dramatically lost their value, leaving the bank with more than 17B USD in potential losses. A bank run of 42B USD in deposit withdrawal requests, could not be met as the SVD could not reach the cash needed to cover them, leading regulators to step in and close the bank. According to President Biden, the banking system remains safe as are the deposits of SVB’s customers, he furthermore stipulated that his administration will do whatever it takes to contain the bank’s collapse. On the other hand, President Biden said that investors in the bank will not be protected.
Former Goldman banker sentenced to 10 years in prison
Robert Ng, a former banker at Goldman Sachs has been sentenced to 10 years in prison after being convicted for his involvement in the looting of billions of dollars from Malaysia’s sovereign wealth fund. US prosecutors claim that 4.5B USD was embezzled by bankers, officials and their associates and these funds were allegedly used to buy real estate, jewelry, art work and even to finance a Hollywood film. Ng is planning to appeal the sentence as he had pleaded not guilty and claims that the 35M USD he was accused of receiving was a return on an investment made by his wife.
The DOJ updates its guidance on corporate compliance programs
Founder and former FTX CEO arrested, indicted on eight fraud charges
Ex-Theranos exec sentenced to 13 years in prison