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, the SEC dismisses allegations of fraud in "meme stock" rally earlier this year. Read the full story and more news below:
SEC Concludes “Game-Like” Trading Apps Fueled Meme Stock Rally, Dismisses Fraud Allegations
An investigation by the SEC concluded that “game-like” trading apps, such as Robinhood, were the reason for the sudden, parabolic appreciation of so-called “meme stocks” in January of this year. The highly-anticipated report cast doubt on conspiracy theories surrounding the rise of Gamestop’s stock price from USD 20 to more than USD 480 in less than a month. According to the SEC, features of apps like Robinhood, such as congratulatory, friendly animations, combined with more nearly one million users trading the Gamestop stock caused the price to spike; not, as some theorized, the covering of shorted stocks by hedge funds.
Ukraine Anti-Corruption Bill Approved
A new bill that seeks to eliminate corruption by providing more independence to its anti-corruption forces has passed in Ukraine Tuesday. The bill will see the creation of a commission that will independently elect two candidates to lead the National Anti-Corruption Bureau (NABU). The third appointee to the commission will be selected by the government. The measures to decrease corruption and increase accountability will have favorable outcomes on Ukraine's ability to secure International Monetary Fund (IMF) funding.
Tunisian Lawmaker Detained Over Money Laundering, Tax Fraud
Mehdi Ben Gharbia, a Tunisian lawmaker, former minister and businessman, was detained Sunday on suspicion of money laundering and tax fraud. Ghabria’s arrest marks the fourth lawmaker to be detained since the total control of the government by President Kais Saied. The president's pledge to crack down on corruption has been warmly embraced by many Tunisians, critics, however, argue that the arrest was a political move to undermine progressive political gains since the Arab Spring in 2011.
Danske Bank Found Deficient in Anti-Money Laundering Protocols
An investigation into Danske Bank has found deficiencies in the bank’s protocols and procedures surrounding anti-money laundering and terrorist financing in Sweden. The bank is required to follow the guidelines issued under the Anti-Money Laundering and Counter-Terrorist Financing Act. The investigation found deficiencies in their adherence to the Act, as well as insufficient risk assessment procedures that aim to prevent the illegal use of their banking services. Danske Bank has been issued a target deadline of June 22nd, 2022 to comply.
American Oil-Services Executive Defrauded Shareholders of Nearly USD 1B
An American executive of a Canadian oil company pleaded guilty Wednesday to fraud resulting in the loss of nearly USD 1B by shareholders. Joseph Kostelecky, a North Dakota man who served as the executive vice president of U.S. operations at the now-closed Poseidon Concepts Corporation, was accused of fraudulently inflating the company’s reported revenue by more than USD 100M causing a rise in the company’s stock price. When no actual revenue was able to be collected on those claims, the stock price plummeted, causing large losses for shareholders.
Women, Minorities Most Likely Victims of Cybercrime
A new report by Malwarebytes has found that disenfranchised minorities, including women and Black, Indigenous, and other people of color (BIPOC), were the most likely victims of cybercrimes including fraud, identity theft, and other forms of hacking. The report found that women, in particular, were most likely to be victims of non-financially motivated crimes such as cyberstalking, “revenge porn” and hacking of social media accounts. The report calls on cybersecurity firms to question why their products fail to reach disenfranchised groups.
DOJ issues further guidance, warnings on ephemeral messaging apps
Federal appeals court upholds 5.6B USD Visa and Mastercard settlement
The DOJ updates its guidance on corporate compliance programs