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, Twitter is accused of intentionally misleading regulators about their cybersecurity standards, according to a whistleblower. Read the full story and more news below:
Twitter Intentionally Misled Regulators, Whistleblower Says
Twitter executives are accused of intentionally misleading regulators about the companies lax efforts against fighting spam and hacking. The whistleblower report, obtained by the Washington Post, was submitted by Peiter Zatko, former head of cybersecurity at Twitter. In the complaint, Zatko claims that the company was using outdated, vulnerable software, that internal employee access controls were poorly managed, and that managers consistently lied to regulators about the efficacy of their security measures.
Most SEC Whistleblower Awards Result from Small Group of Attorneys, Research Suggests
New research suggests that the SEC whistleblower award program, touted by law enforcement and Justice Department officials as an effective outlet for those that spot wrongdoing in a company, is largely used by a repeat group of “well-connected” attorneys, many of whom have previous connections with SEC regulators. A new research report published by Alexander Platt, associate professor of law at University of Kansas School of Law, said that a “revolving door” of whistleblower attorneys are pushing clients to make reports to the SEC, and that nearly one quarter of the awards given out by the SEC program were given to those represented by attorneys with previous SEC connections, which could discourage those making unrepresented claims from reporting. However, others disagree with the study and motives of the author: “The idea that there is this small cohort of whistleblower attorneys and advocates is preposterous,” Siri Nelson, executive director of Washington-based nonprofit National Whistleblower Center, said.
Multi-Billion Dollar Corruption Scheme Rocks Iran Metals and Mining Industry
A group of senior officials at Mobarakeh Steel Company (MSC), Iran’s largest steel, metals, and mining company, are accused of abusing their positions to defraud shareholders, the Iranian government, and citizens of Iran of billions of dollars. A nearly two year long investigation found that the senior leaders in the company displayed evidence of widespread fraud, cronyism, and corruption across several offenses, including fraudulent contracts, under the table deals with third parties, and money laundering. The investigation also found evidence of an attempted coverup of the evidence of wrongdoing. The officials accused are slated to stand trial in front of government officials in the near future.
‘Culture of Fear’ at Starbucks Amid Union Leader Firings
Representatives of Starbucks Workers United, a workers union of Starbucks employees, say that the company has created a ‘culture of fear’ due to the apparent firings of several employees who were heavily involved in the union. There have been more than 85 firings in the months since many Starbucks stores publicly announced their intention to unionize. In some cases, workers took complaints and unfair labor practices cases to federal judges, who reinstated a small portion of the fired workers. Jaysin Saxton, a former Starbucks employee who was involved in SWU and subsequently terminated, said that morale at his store location was low and that the company “created this intense culture of fear in the store and are trying to push us all out.”
El Salvador Businessmen and Ex-Officials Investigated in USD 184M Corruption Case
Nearly 20 former El Salvadoran officials and businessmen are under investigation for the diversion of nearly USD 200M in funds from the state, the country’s attorney general said this week. The group allegedly stole funds and funneled them through businesses owned by two of the men involved. So far, four men have been arrested in connection with the stolen funds.