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, WhatsApp faces a multi-million dollar fine for privacy violations. Read the full story and more news below:
WhatsApp Fined USD 270M for EU Privacy Violations
WhatsApp, the Facebook-owned messaging and communication service, is facing fines totaling USD 270M for violations of EU privacy laws relating to how it handles customer data privacy. The company, acquired by Facebook in 2014, failed to disclose specific details about the data stored and how it uses it. The multi-million dollar fine is the second-highest levied under the EU’s Global Data Protection Regulation, which took effect in 2018. The fine signals a marked increase in EU data privacy enforcement against US tech companies.
Record-breaking Remittances from US to Mexico Raise Money Laundering Concerns
The Mexican government says that remittances sent to Mexican banks from the US are set to hit an all-time high this year, raising concerns for money laundering perpetrated by organized crime groups. Remittances, or non-commercial transfers of money from foreign workers with ties abroad, have reportedly increased to USD 23B so far this far, and are on track to surpass any numbers seen in previous years. Organized crime groups have been known to use these types of transfers to launder money, raising concerns among the Mexico Central Bank for the unusually high amount of money transferred this year. According to the Basel Institute’s 2020 Anti-Money Laundering Index, remittances remain a key money laundering tool for Mexican crime groups and US banks have had a difficult time keeping security measures in place in the past.
KPMG Accused of Giving ‘False and Misleading’ Data to Regulators
U.K.-based, global accounting giant KPMG has been accused of providing “false and misleading information” to the Financial Reporting Council during two audits dating back to 2014 and 2016. According to the U.K. accounting watchdog, information relating to separate contractors and business units was falsified during the audits. KPMG allegedly alerted regulators of the inaccuracy when it discovered the issues in 2018 and 2019 and said that they suspended the employees involved.
SEC Sues Cryptocurrency Founder Over USD 2B Fraud Scheme
The United States Securities and Exchange Commission (SEC) is suing the founder of the now-defunct cryptocurrency exchange platform BitConnect. Satish Kumbhani is accused of fraudulently selling and marketing a “lending program” whereby users of BitConnect would purchase BitConnect Coin that could then be traded for Bitcoin. BitConnect users were told that they could expect 40% returns per month and were allegedly shown fake return rates of 3,700% per year. Nearly all of BitConnect’s early investors lost their entire investment when the price of BitConnect Coin tanked more than 90% in 2018.
Chinese Banks Not Liable for Nike Counterfeiters
Six Chinese banks were found not liable for more than USD 150M in sanctions after failing to freeze the assets of more than 600 entities and individuals accused of counterfeiting Nike products. Money gained from selling counterfeit products was transferred to the Chinese banks for several years. Nike, along with its business unit Converse, Inc., won a judgement in 2015 against the counterfeiters in 2015. In that case, the judge ruled that the defendants and “all persons acting in concert or in participation” were to be restrained from transferring any assets in connection with the counterfeit operations.
Nearly 30% of Brazil’s Gold Exports Are Illegal, According to Report
Nearly 30% of gold exported from Brazil in 2019 and 2020 most likely came from illegal mines. According to a report by the Federal University of Minas Gerais and public prosecutors, widespread forging of documents and lack of effective law enforcement have led to nearly 50 tons of illegal gold being exported from Brazil to other countries. Illegal mining often takes place on protected nature reserves or indigenous land and can often lead to disastrous environmental outcomes, such as deforestation in the Amazon rainforest, as well as poisoning rivers and other bodies of water with mercury.
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