Compliance Bricks and Mortar for June 10

These are some of the compliance related stories that recently caught my attention.

Pigeon at Castelvecchio Verona

U.S. Offers Rare Account of Why It Didn’t Pursue Bribery Charges by Samuel Rubenfeld in WSJ.com’s Risk & Compliance Journal

As the Securities and Exchange Commission announced it reached non-prosecution agreements in two unrelated foreign-bribery cases, the U.S. Justice Department took the rare step of releasing letters sent to the companies explaining why it decided to close the cases without filing charges.

The companies — Cambridge, Mass.-based internet-services provider Akamai Technologies and Providence, R.I.-based home-security and thermostat systems-maker Nortek — both agreed to forfeit ill-gotten gains connected to bribes paid to Chinese officials by foreign subsidiaries, the SEC said. Both companies self-reported the misconduct and they cooperated extensively with SEC probes, the SEC said. [More…]

The Panama Papers and Shell Games, Part I by TOm FOx in the FCPA Compliance & Ethics Report

All of this is not simply about performing adequate due diligence so that you will know with whom you are doing business. Internal corporate investigators need to be aware of how shell corporations are set up to help detect fraud in their own organizations. In his piece Hubbs cited to a Department of Justice (DOJ) Press Release from then Deputy Assistant Attorney General Bruce Swartz around the resolution of the Hewlett-Packard (HP) FCPA resolution for the following, “Hewlett-Packard subsidiaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous e-mail accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash.” [More…]

The First Form 1-Ks Are Filed! by Broc Romanek in TheCorporateCounsel.net

Hat tip to Bjorn Hall of Fundrise for letting me know that the Fundrise Real Estate Investment Trust, LLC (which they lovingly call the “Income eREIT”) filed the first-ever “Annual Report on Form 1-K” back in late April. Under Rule 257(b)(1) of Regulation A, Form 1-K is the annual report now required to be filed by Tier 2 companies that conducted their offerings under Regulation A+. The form is due within 120 calendar days of fiscal year covered by the report. Only Tier 2 companies are required to file a Form 1-K, one of trade-offs for not having to register with the states. Since Fundrise made their filing back in late April, there have been four other Form 1-Ks filed. [More…]

Prostitutes, vacations and cash: The Navy officials ‘Fat Leonard’ took down by Craig Whitlock and Kevin Uhrmacher in The Washington Post

Leonard Glenn Francis, a Malaysian defense contractor, has pleaded guilty to bribing “scores” of Navy officials with cash bribes, prostitutes and other gifts – such as hotel stays, airfare and electronics – so they would feed him classified or inside information, which he used to defraud the Navy. The slowly unfolding investigation has exposed a staggering degree of corruption within the Navy. [More…]

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