This Week in Compliance: Barclays’ CEO fined for going after whistleblower

by GAN Integrity on May 18th, 2018

This Week in Compliance: Barclays’ CEO fined for going after whistleblower

Here’s what’s been going on in the compliance world this week:

Business

Barclays’ CEO fined for going after whistleblower: Barclays’s Chief executive Jes Staley has been imposed a combined fine of GBP 1.1 million over attempts to reveal the identity of a whistleblower, who had sent letters criticizing an employee of the bank. The regulators’ report showed that tracking down the whistleblower had become a transatlantic effort. The Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority, gave Staley a 30% discount on the fine which totaled GBP 642,000 for agreeing to settle at an early stage, while Barclays cut Stanley’s 2016 pay by GBP 500,000. The fine is the first ever such penalty to be imposed on a sitting CEO of a major bank in Britain. However, lawmakers have criticized the penalty for being too lenient and said that they would ask the FCA at a hearing why it believes the fines are appropriate as opposed to a harsher sanction. US authorities are still investigating the case.

DOJ takes over whistleblower suits against Insys Therapeutics: The DOJ consolidated five separate whistleblower lawsuits claiming that opioid-producing company Insys Therapeutics paid kickbacks to encourage doctors and nurses to prescribe a cancer pain-relieving drug to patients. According to the lawsuits, Insys staff had also encouraged the prescription of the drug to patients who didn’t have cancer. Insys staff reportedly lied to insurers about patients’ diagnoses to obtain reimbursements from government insurance programs. Insys is already facing pressure as its ex-CEO John Kapoor and other top executives have been charged with conspiracy to illegally distribute its drugs. Kapoor has denied the allegations and pleaded not guilty. The DOJ has already obtained convictions and guilty pleas in criminal cases related to the matter while others are still pending.

Shell and Eni stand trial over alleged corruption in Nigeria: The two companies, Italian oil giant Eni and Royal Dutch Shell, as well as a number of their senior executives face trial in Milan over corruption charges related to a USD 1.1 billion deal to buy rights to a vast Nigerian oil block back in 2011. According to Milan’s public prosecutor, USD 520 million from the deal was intended to be used to bribe to the then Nigerian President Goodluck Jonathan, members of the government and other Nigerian government officials. The prosecutor also claims that money was also channeled to executives at Eni and Shell and that USD 50 million in cash was delivered to the home of Roberto Casula, the then head Eni’s business for Sub-Saharan Africa. Both companies and their executives deny all charges.

JBS shareholder charged by Brazil’s prosecutors with corruption: Joesley Batista, one of the largest shareholders in the meatpacking company JBS, Francisco Assis, another JBS senior executive, and a former federal prosecutor, Angelo Goulart, were charged with corruption, money laundering and obstruction of Justiceby Brazil’s federal prosecutors. If the Brazilian court, to which the charges were presented, agrees to the claims, the three defendants will stand trial in a criminal case. Batista and Assis’ lawyers stated, however, that the charges against their clients could not be presented before the Supreme Court decides whether or not to validate their plea deals. Goulart also faces accusations of leaking internal Prosecutors Office information to Batista and Assis to ease their plea deal negotiations.

Government

Romanians anti-corruption demonstrators protest government reforms: Thousands of Romanians gathered in Bucharest’s Victory Square and other cities around the country to protest a contentious judicial overhaul, which they believe will make it more challenging for prosecutors to hold corrupt senior officials to account. Since the current left-wing government took over power in 2016, the pursuit of legal changes deemed to weaken the fight against corruption regularly drove protestors out on the streets to demonstrate against government proposals. The ruling party, however, claims that prosecutors currently have too much power and, hence a need to reform laws. Some of the proposed reforms include restricting public statements about corruption investigations and allowing officials accused of corruption to be present when whistleblowers make allegations.

Four high court judges suspended following bribery exposé in Ghana: In the latest development of a corruption case rocking Ghana’s judiciary, President Nana Akufo-Addo suspended four high court judges after a disciplinary committee launched an investigation into accusations of passive bribery against them. Back in 2015, local journalist Anas Aremeyaw Anas – investigating allegations of bribery in return for influence peddling in court cases – caught on tape 12 judges, including the four suspended ones and more than 100 court officials, accepting money from clients for everything from appointments to false rulings. The filming, which was broadcast to packed crowds, rocked the country and prompted calls for judicial reform. Twenty lower court judges and magistrates have already been fired following the bribery expose.

Noteworthy

New policy against pilling on: The DOJ announced a new policy last week, encouraging consistency in corporate enforcement by allowing for greater coordination between departments and enforcement agencies to avoid multiple and unfair duplicative penalties for the same conduct. The policy is an attempt to avoid piling on by enforcement agencies, which has become more common as modern business operations increasingly span jurisdictions and borders. The policy also tackles the challenge of whistleblower allegations being reported to multiple enforcement authorities, leading to separate investigations into the same matters. Deputy Attorney General Rosenstein explained that piling on enforcements creates uncertainty among companies as it makes it difficult to for them to make ‘full and final settlements’. The new policy will be incorporated into the U.S. Attorneys’ Manual.

Building a comprehensive structure for your compliance program is essential to effectively and efficiently mitigate risk. And while risks vary from one company to another based on industry, location, and partners – thereby disqualifying any one-size-fits-all compliance program – the underlying structure of a program can, to a reasonable extent, be broken down into a set of components.