An engineer who formerly worked at the US-based Ford Motor company has been accused of stealing secrets from his former employer by downloading it into a USB drive, and then using it to look for a new job in China.
Xiang Dong Yu, also known as Mike Yu, was arrested on October 14 in Chicago’s O’Hare Airport on his return from a trip to China, according to a report published by the Associated Press. The 47 year-old Yu is charged with theft, attempted theft of trade secrets, and unauthorized access to a computer.
Around December 2006, he allegedly copied design details on doors, mirrors, steering wheel assemblies, power systems, wipers, among other components, of cars manufactured by Ford. The information totalled 4,000 documents. Less than a month later, he quit Ford to work for a company in Shenzhen. He used the information again in the spring of 2008, when he was hunting for another job in China.
He sought employment with China’s Shanghai Automotive Industry Corporation using these secrets. Eventually, he was hired by Beijing Automotive Corporation, according to a Bloomberg report.
A spokeswoman from the FBI said the case began with a referral from Ford. Ford said it is aware of the case, and is cooperating with authorities, but declined to comment further.
“Employees and employers should be aware that stealing proprietary trade secrets to gain an economic advantage is a serious federal offense that will be prosecuted aggressively,” said US Attorney Terrence Berg.
The maximum penalty for Yu’s offenses is 45 years in jail and US$1.25 million in fines.
Wednesday 28 October 2009
Monday 26 October 2009
Banks and financial firms most exposed to fraud
The financial services industry has been hit the hardest by fraud in the wake of the global financial crisis, according to recently released report.
The Global Fraud Report, released by consulting firm Kroll, surveyed 10 industries around the world. It found that while losses to fraud by companies across industries in the last three rose by only seven per cent, to an average of US$8.8 million per company.
However, the report also found that sectors which are closer to source of the financial contagion which spread around the world were more prone to fraud. The financial services industry was hit the hardest, losing a average of US$15.2 million in the three years to 2009 per company, an increase of 18 per cent compared to the 2008 figure.
The number of financial services companies that say they have suffered at least one form of fraud rose to 87 per cent, from 79 per cent last year. Half of respondents from the finance sector said that the global financial crisis has caused an increase in the number of cases of fraud at their organisations.
Other industries which saw an increase in fraud include professional services, health care, pharmaceuticals and biotechnology, retail, wholesale and distribution, and travel, leisure and transportation. The other five sectors actually saw a decrease in fraud. They were manufacturing, technology, media and telecommunications, natural resources, and consumer goods and construction.
The report said that, combined together, the decreases in fraud in some sectors cancelled out the rise in other sectors. Overall, fraud remained relatively steady, its authors concluded.
Kroll said that the financial services sector faced the broadest exposure to fraud in the wake of the economic downturn, dealing with issues such as money laundering, financial mismanagement, regulatory and compliance, internal financial fraud and informational loss or theft.
“Traditionally, every downturn brings about a rise in fraud, but what we are seeing in 2009 is something far more complex. Companies are seeing greater vulnerability due to reduction in internal controls, pay cuts, and reduced revenue across the board, but counteracting this increased risk are the realities of today’s constrained business environment, where factors such as high staff turnover, entry into new markets, and inter-firm collaboration are far less common than in years past. In short, the current economic crisis has increased the motive for fraud, but decreased the opportunity,” said Blake Coppotelli, senior managing director at Kroll’s business intelligence and investigations unit.
“Of course, this shift in business behaviour is only as lasting as the economic crisis itself, which is why companies must work to bolster their existing anti-fraud strategies in preparation for the economic changes to come,” he added.
The survey was conducted by the Economist Intelligence Unit, of 729 executives.
The Global Fraud Report, released by consulting firm Kroll, surveyed 10 industries around the world. It found that while losses to fraud by companies across industries in the last three rose by only seven per cent, to an average of US$8.8 million per company.
However, the report also found that sectors which are closer to source of the financial contagion which spread around the world were more prone to fraud. The financial services industry was hit the hardest, losing a average of US$15.2 million in the three years to 2009 per company, an increase of 18 per cent compared to the 2008 figure.
The number of financial services companies that say they have suffered at least one form of fraud rose to 87 per cent, from 79 per cent last year. Half of respondents from the finance sector said that the global financial crisis has caused an increase in the number of cases of fraud at their organisations.
Other industries which saw an increase in fraud include professional services, health care, pharmaceuticals and biotechnology, retail, wholesale and distribution, and travel, leisure and transportation. The other five sectors actually saw a decrease in fraud. They were manufacturing, technology, media and telecommunications, natural resources, and consumer goods and construction.
The report said that, combined together, the decreases in fraud in some sectors cancelled out the rise in other sectors. Overall, fraud remained relatively steady, its authors concluded.
Kroll said that the financial services sector faced the broadest exposure to fraud in the wake of the economic downturn, dealing with issues such as money laundering, financial mismanagement, regulatory and compliance, internal financial fraud and informational loss or theft.
“Traditionally, every downturn brings about a rise in fraud, but what we are seeing in 2009 is something far more complex. Companies are seeing greater vulnerability due to reduction in internal controls, pay cuts, and reduced revenue across the board, but counteracting this increased risk are the realities of today’s constrained business environment, where factors such as high staff turnover, entry into new markets, and inter-firm collaboration are far less common than in years past. In short, the current economic crisis has increased the motive for fraud, but decreased the opportunity,” said Blake Coppotelli, senior managing director at Kroll’s business intelligence and investigations unit.
“Of course, this shift in business behaviour is only as lasting as the economic crisis itself, which is why companies must work to bolster their existing anti-fraud strategies in preparation for the economic changes to come,” he added.
The survey was conducted by the Economist Intelligence Unit, of 729 executives.
Singapore to tighten hedge fund regulation
A set of new rules is expected to be proposed by the Singaporean central bank that would tighten the regulation of the island-state’s hedge fund industry, and make it more difficult for smaller funds to be set up.
The Reuters report said that the Monetary Authority of Singapore (MAS) is believed to be in the process of drafting guidelines that will be announced in a public consultation in November. The guidelines are expected to require new hedge fund start-ups to detail clearly the qualifications and experience of its managers, and the infrastructure it has in place to ensure it has adequate levels of corporate governance.
However, it will not remove tax incentives fund managers currently enjoy in Singapore, according to the report’s unnamed sources.
Currently, smaller funds with less than 30 accredited investors are not required to hold a capital markets services license. This frees managers from fulfilling a number of requirements including the filing of a number of reports to regulators, and passing exams, the report said.
“MAS Is monitoring market developments and global initiatives, and will fine-tune our regulatory approach as appropriate,” a MAS spokeswoman told the news agency.
The report also quote unnamed fund managers as expressing concerned that exempt funds may be required to purchase indemnity insurance, raising costs.
David Gray, UBS’s head of Asia Pacific prime services told the news agency that there have been around 20 relatively large hedge funds set up in Singapore in 2009. He noted that new hedge funds tend to be bigger in light of the financial crisis because of the increased demands on meeting compliance, due diligence, and risk management needs.
The Reuters report said that the Monetary Authority of Singapore (MAS) is believed to be in the process of drafting guidelines that will be announced in a public consultation in November. The guidelines are expected to require new hedge fund start-ups to detail clearly the qualifications and experience of its managers, and the infrastructure it has in place to ensure it has adequate levels of corporate governance.
However, it will not remove tax incentives fund managers currently enjoy in Singapore, according to the report’s unnamed sources.
Currently, smaller funds with less than 30 accredited investors are not required to hold a capital markets services license. This frees managers from fulfilling a number of requirements including the filing of a number of reports to regulators, and passing exams, the report said.
“MAS Is monitoring market developments and global initiatives, and will fine-tune our regulatory approach as appropriate,” a MAS spokeswoman told the news agency.
The report also quote unnamed fund managers as expressing concerned that exempt funds may be required to purchase indemnity insurance, raising costs.
David Gray, UBS’s head of Asia Pacific prime services told the news agency that there have been around 20 relatively large hedge funds set up in Singapore in 2009. He noted that new hedge funds tend to be bigger in light of the financial crisis because of the increased demands on meeting compliance, due diligence, and risk management needs.
Sunday 18 October 2009
Massive global insider trading ring unearthed
Six people, among them a well-known hedge fund kingpin and executives from blue chip companies the likes of IBM and McKinsey, have been arrested in what has been described as the biggest insider-trading scandal in a generation.
Both the US Attorney in Manhattan and the Securities and Exchange Commission have accused the group of running, between 2006 and 2008, an insider-trading ring that paid informants for privileged commercial information. The group then used this information to realise gains in the investment markets to the tune of US$20 million, according to the report which appeared in the Wall Street Journal.
At the centre of the scandal is Sri-Lankan-based New York hedge fund manager Raj Rajaratnam. Rajaratnam, known as a prolific investor of technology stocks, is a founder of the Gallon Group, which manages US$3.7 billion in assets. He was arrested at 6am on the morning of October 17, after the FBI raided his New York apartment.
He has been charged with committing securities fraud, conspiracy to commit securities fraud, as well as a civil charge of insider trading. The other executives arrested were Robert Moffat , 53, an executive who ran the supply chain department at IBM, Rajiv Goel , 51, a treasury department executive at Intel, Anil Kumar, 51, a director at consulting firm McKinsey, as well as Mark Kurland, 60, and Danielle Chiesi, 43, who both worked at a hedge fund group called New Castle Partners.
The complaints, which were compiled through the use of phone wiretaps, alleged that the group swapped information that could affect stock prices, but which has not yet been made public.
The report said the court filings, which contained excerpts of taped conversations, showed that Rajaratnam and his co-conspirators treated informants as if they were outsourced analysts, at times discussing earnings projections and deals.
Among the deals that the group were privy to was the bid by the Blackstone Group to take the Hilton chain of hotels private. Using this information, The Galleon Group bought and sold 400,000 Hilton shares, and earned an illicit profit of US$4 million. An analyst at Moody’s Investors Service received US$10,000 for the tip, the report said.
Cooperating witnesses who provided information to the group said Rajaratnam and his cohorts were similarly alerted to sensitive commercial information at wireless broadband service provider Clearwire, Google, and Sun Microsystems. The network of informants also allegedly extended to companies including internet platform provider Akamai Technologies, chipmaker Advanced Micro Devices, investor relations firm Market Street Partners, telecommunications equipment manufacturer Polycom, and software maker Peoplesoft.
Both the US Attorney in Manhattan and the Securities and Exchange Commission have accused the group of running, between 2006 and 2008, an insider-trading ring that paid informants for privileged commercial information. The group then used this information to realise gains in the investment markets to the tune of US$20 million, according to the report which appeared in the Wall Street Journal.
At the centre of the scandal is Sri-Lankan-based New York hedge fund manager Raj Rajaratnam. Rajaratnam, known as a prolific investor of technology stocks, is a founder of the Gallon Group, which manages US$3.7 billion in assets. He was arrested at 6am on the morning of October 17, after the FBI raided his New York apartment.
He has been charged with committing securities fraud, conspiracy to commit securities fraud, as well as a civil charge of insider trading. The other executives arrested were Robert Moffat , 53, an executive who ran the supply chain department at IBM, Rajiv Goel , 51, a treasury department executive at Intel, Anil Kumar, 51, a director at consulting firm McKinsey, as well as Mark Kurland, 60, and Danielle Chiesi, 43, who both worked at a hedge fund group called New Castle Partners.
The complaints, which were compiled through the use of phone wiretaps, alleged that the group swapped information that could affect stock prices, but which has not yet been made public.
The report said the court filings, which contained excerpts of taped conversations, showed that Rajaratnam and his co-conspirators treated informants as if they were outsourced analysts, at times discussing earnings projections and deals.
Among the deals that the group were privy to was the bid by the Blackstone Group to take the Hilton chain of hotels private. Using this information, The Galleon Group bought and sold 400,000 Hilton shares, and earned an illicit profit of US$4 million. An analyst at Moody’s Investors Service received US$10,000 for the tip, the report said.
Cooperating witnesses who provided information to the group said Rajaratnam and his cohorts were similarly alerted to sensitive commercial information at wireless broadband service provider Clearwire, Google, and Sun Microsystems. The network of informants also allegedly extended to companies including internet platform provider Akamai Technologies, chipmaker Advanced Micro Devices, investor relations firm Market Street Partners, telecommunications equipment manufacturer Polycom, and software maker Peoplesoft.
Sunday 11 October 2009
BAE snubs £300 million settlement offer
Under investigation for allegedly bribing foreign officials to secure lucrative defence contracts in Africa and Eastern Europe, BAE Systems has reportedly turned down an offer to settle the case for £300 million.
However, the report appearing in The Times newspaper also said that the UK defence contractor would be willing to settle the six-year investigation by the UK’s Serious Fraud Office (SFO) into its corporate conduct, but only if it is presented with compelling evidence to support the bribery claims.
The company, which is alleged to have bribed officials in Africa and Eastern Europe to win arms sales contracts, is also unwilling to settle the case if it came at too great a cost, the report said.
The BAE board is refusing to pay the rumoured £300 million settlement sought by the SFO to end the case, the report said. BAE directors were advised that it may leave themselves exposed to lawsuits alleging misuse of shareholder funds if they agreed to the amount, the report added.
The newspaper report also noted that there has been suggestion inside BAE that a payment of £20 million would be more suitable. The company was also willing to admit to a measure of guilt that its agents and middlemen had acted improperly. The report said that BAE was keen to avoid the trial over fears it would damage its reputation.
Separately, The US Department of Justice (DoJ) is believed to have also turned its attention to whether the same BAE deals in Africa and Eastern Europe breached American anti-corruption rules. The report in The Independent said that there has already been an informal exchange of information between the SFO and the DoJ, and that this is expected to become formalised soon.
However, the report appearing in The Times newspaper also said that the UK defence contractor would be willing to settle the six-year investigation by the UK’s Serious Fraud Office (SFO) into its corporate conduct, but only if it is presented with compelling evidence to support the bribery claims.
The company, which is alleged to have bribed officials in Africa and Eastern Europe to win arms sales contracts, is also unwilling to settle the case if it came at too great a cost, the report said.
The BAE board is refusing to pay the rumoured £300 million settlement sought by the SFO to end the case, the report said. BAE directors were advised that it may leave themselves exposed to lawsuits alleging misuse of shareholder funds if they agreed to the amount, the report added.
The newspaper report also noted that there has been suggestion inside BAE that a payment of £20 million would be more suitable. The company was also willing to admit to a measure of guilt that its agents and middlemen had acted improperly. The report said that BAE was keen to avoid the trial over fears it would damage its reputation.
Separately, The US Department of Justice (DoJ) is believed to have also turned its attention to whether the same BAE deals in Africa and Eastern Europe breached American anti-corruption rules. The report in The Independent said that there has already been an informal exchange of information between the SFO and the DoJ, and that this is expected to become formalised soon.
IBM probed over anti-trust claims
The US Department of Justice is probing allegations that IBM has abused as its dominant position in mainframe computers, illegally keeping new competitors out of the market by refusing to license the use of its software.
IBM both manufactures expensive mainframe computers, used by government agencies and multinational organisations to handle vast volumes of information, and also writes the software that they run on.
The accusations are that while IBM used to license its software to competitors building mainframe computers using non-IBM hardware, the company stopped the practice a few years ago to choke off competition, according to the report by the Associated Press.
The reported cited the Computer and Communications Industry Association, a US trade body. The association said that the government was requesting information from IBM’s competitors over the anti-trust allegations.
The probe originated from complaints filed by two companies. They are Boston-based IT solutions developer Platinum Services, and Tampa-based T3 Technologies. In particular, T3, which used to resell IBM mainframe computers, has accused IBM of frustrating the smaller company’s ambitions to expand into the hardware manufacturing business. They allege that IBM denied the company licenses to use IBM software “for no reason other than to remove all competition from the mainframe market.”
Currently, IBM enjoys a virtual monopoly in the mainframe computer market, but some companies try to build computers that are less expense than those offered by the computing giant, but which also run the same IBM software.
“IBM will tell big customers that if you buy that other stuff, we’re not going to let that stuff talk to our stuff. We think of the Internet as open and innovative, but that’s a lock’em up strategy. That’s very unsatisfactory for the customer base,” said Ed Black, CEO of the Computer and Communications Industry Association.
The DoJ did not comment. IBM said it will cooperate with any inquiries from the department. The company also said it believes there were no merits to T3’s claims, and that IBM was entitled to enforce its intellectual property rights.
In 1956, IBM was forced to operate under anti-trust agreement with the government over allegations it was abusing its monopoly power in the electronic tabulating machines market. The agreement also covered computers, but was gradually phased out over the years, and all its provisions were dropped in 2001.
IBM both manufactures expensive mainframe computers, used by government agencies and multinational organisations to handle vast volumes of information, and also writes the software that they run on.
The accusations are that while IBM used to license its software to competitors building mainframe computers using non-IBM hardware, the company stopped the practice a few years ago to choke off competition, according to the report by the Associated Press.
The reported cited the Computer and Communications Industry Association, a US trade body. The association said that the government was requesting information from IBM’s competitors over the anti-trust allegations.
The probe originated from complaints filed by two companies. They are Boston-based IT solutions developer Platinum Services, and Tampa-based T3 Technologies. In particular, T3, which used to resell IBM mainframe computers, has accused IBM of frustrating the smaller company’s ambitions to expand into the hardware manufacturing business. They allege that IBM denied the company licenses to use IBM software “for no reason other than to remove all competition from the mainframe market.”
Currently, IBM enjoys a virtual monopoly in the mainframe computer market, but some companies try to build computers that are less expense than those offered by the computing giant, but which also run the same IBM software.
“IBM will tell big customers that if you buy that other stuff, we’re not going to let that stuff talk to our stuff. We think of the Internet as open and innovative, but that’s a lock’em up strategy. That’s very unsatisfactory for the customer base,” said Ed Black, CEO of the Computer and Communications Industry Association.
The DoJ did not comment. IBM said it will cooperate with any inquiries from the department. The company also said it believes there were no merits to T3’s claims, and that IBM was entitled to enforce its intellectual property rights.
In 1956, IBM was forced to operate under anti-trust agreement with the government over allegations it was abusing its monopoly power in the electronic tabulating machines market. The agreement also covered computers, but was gradually phased out over the years, and all its provisions were dropped in 2001.
Sunday 4 October 2009
Corruption not confined to poor countries
Almost two out of five business in a recent global survey said they had been asked to pay bribes to governments in the normal course of doing business.
The latest Global Corruption Report, issued by the non-profit organisation Transparency International, also found that half of the international business executives polled believe that corruption added at least 10 per cent to project building costs. Around 20 per cent said they had lost business to competitors paying bribes.
Transparency International said that that bribery and price-fixing were influencing global public policy and costing countries billions in lost revenue. It also undermined fair competition, and stifled economic growth. It estimated that bribes paid to politicians and officials were in the area of US$20 billion to US$40 billion annually.
It estimated that consumers around the world were over-charged by around US$300 billion in the 15 years between 1990 and 2005, because of the existence of nearly 300 private business cartels around the world.
The report also ranked country by how corrupt they were perceived to be. Denmark, New Zealand, and Sweden were the most corruption-free. Hong Kong ranked 13th, the UK 17th, and the US 20th. China was ranked 72nd. The lowest ranked countries were Iraq, Myanmar, and Somalia. There were a total of 180 countries ranked.
Corruption was not confined to poor countries, and blatant bribery was only part of the problem, it said. In many places, nepotism, favouritism, and informal understandings between businesses led to inefficiencies, and waste of resources.
There were also “revolving doors” between the private and public sectors which fostered “deceitful public procurement deals where non-competitive bidding and opaque processes lead to immense waste and unreliable services or goods”.
The report noted that the world’s biggest companies all have codes of ethics, but few monitor how they are implemented.
The group’s global programmes director, Christiaan Poortman, said tackling corruption was especially important in light of the current financial crisis. He noted that financial and economic stability hinged on an efficient and transparent market.
He noted that corruption acted as a catalyst for the downturn, since ratings agencies “turned a blind eye to high levels of risk” - in a clear conflict of interest, he said. The report called on companies to issue regular reports on efforts they were making to fight corruption, and to reveal financial support donated to politicians, lobbyists, and governments.
The latest Global Corruption Report, issued by the non-profit organisation Transparency International, also found that half of the international business executives polled believe that corruption added at least 10 per cent to project building costs. Around 20 per cent said they had lost business to competitors paying bribes.
Transparency International said that that bribery and price-fixing were influencing global public policy and costing countries billions in lost revenue. It also undermined fair competition, and stifled economic growth. It estimated that bribes paid to politicians and officials were in the area of US$20 billion to US$40 billion annually.
It estimated that consumers around the world were over-charged by around US$300 billion in the 15 years between 1990 and 2005, because of the existence of nearly 300 private business cartels around the world.
The report also ranked country by how corrupt they were perceived to be. Denmark, New Zealand, and Sweden were the most corruption-free. Hong Kong ranked 13th, the UK 17th, and the US 20th. China was ranked 72nd. The lowest ranked countries were Iraq, Myanmar, and Somalia. There were a total of 180 countries ranked.
Corruption was not confined to poor countries, and blatant bribery was only part of the problem, it said. In many places, nepotism, favouritism, and informal understandings between businesses led to inefficiencies, and waste of resources.
There were also “revolving doors” between the private and public sectors which fostered “deceitful public procurement deals where non-competitive bidding and opaque processes lead to immense waste and unreliable services or goods”.
The report noted that the world’s biggest companies all have codes of ethics, but few monitor how they are implemented.
The group’s global programmes director, Christiaan Poortman, said tackling corruption was especially important in light of the current financial crisis. He noted that financial and economic stability hinged on an efficient and transparent market.
He noted that corruption acted as a catalyst for the downturn, since ratings agencies “turned a blind eye to high levels of risk” - in a clear conflict of interest, he said. The report called on companies to issue regular reports on efforts they were making to fight corruption, and to reveal financial support donated to politicians, lobbyists, and governments.
UK fraud buster to prosecute BAE
Britain’s Serious Fraud Office (SFO) said it will seek permission from the country’s attorney general to prosecute the national defence contractor BAE, over bribery charges.
According to the report which appeared in the UK’s The Times, the country’s fraud-buster said it is preparing to submit papers to the Baroness Scotland to seek consent to prosecute BAE for “offences relating to overseas corruption”.
This comes after a controversial decision in 2006 by then-Prime Minister Tony Blair not to prosecute the company for alleged bribery in order to secure a contract to supply 100 fighter jets, worth £43 billion, to Saudi Arabia. The case was dropped on national security grounds.
The report noted that the agency has been investigating the case for the last six years, and will submit the paperwork when it “believes it is ready to proceed”. No further details on the timing of such a prosecution, which has to be approved by the attorney general, were provided by the office.
What was revealed was that investigators had probed alleged bribes paid by BAE to win contracts in the Czech Republic, Romania, South Africa, and Tanzania.
BAE has responded by describing the charges levied against it by the SFO as “historical”, and that it was making “considerable effort” to resolve them. The company also repeated its assertion that it had always acted “responsibly” in its business dealings.
“If the director of the SFO obtains the consent that he seeks from the Attorney General and proceedings are commenced, the company will deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court,” the company said.
The Times report also noted that the agency is believed to be willing to settle the case if BAE were to accept a fine of £500 million.
According to the report which appeared in the UK’s The Times, the country’s fraud-buster said it is preparing to submit papers to the Baroness Scotland to seek consent to prosecute BAE for “offences relating to overseas corruption”.
This comes after a controversial decision in 2006 by then-Prime Minister Tony Blair not to prosecute the company for alleged bribery in order to secure a contract to supply 100 fighter jets, worth £43 billion, to Saudi Arabia. The case was dropped on national security grounds.
The report noted that the agency has been investigating the case for the last six years, and will submit the paperwork when it “believes it is ready to proceed”. No further details on the timing of such a prosecution, which has to be approved by the attorney general, were provided by the office.
What was revealed was that investigators had probed alleged bribes paid by BAE to win contracts in the Czech Republic, Romania, South Africa, and Tanzania.
BAE has responded by describing the charges levied against it by the SFO as “historical”, and that it was making “considerable effort” to resolve them. The company also repeated its assertion that it had always acted “responsibly” in its business dealings.
“If the director of the SFO obtains the consent that he seeks from the Attorney General and proceedings are commenced, the company will deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court,” the company said.
The Times report also noted that the agency is believed to be willing to settle the case if BAE were to accept a fine of £500 million.
Thursday 1 October 2009
One-third of companies have no FCPA controls
More than a third of respondents to a survey said their companies had no compliance programme to detect or prevent violations of the US Foreign Corrupt Practices Act.
The online survey by Deloitte Financial Advisory Services of 1,090 executives found that 34 per cent of respondents said their companies had no comprehensive compliance plan dealing with the FCPA. This is despite the fact that 72 per cent of respondents said they expect the US government, through the Securities and Exchange Commission and the Department of Justice, to up its enforcement of the act, which bars Americans from bribing foreign officials.
When asked where they expected FCPA violations to most likely occur, 35 per cent responded that they imagine it would be from a US company’s foreign subsidiary, 28 per cent said from an agent or consultant, and 18 per cent said joint ventures or strategic partnerships.
Just under a quarter (23 per cent) of respondents attributed the lack of attention to the fact that many companies are unaware of the harsh penalties meted out for breach of compliance.
Ed Rial, Deloitte Financial Advisory Services principal, noted that FCPA enforcement is increasing significantly, even in industries not traditionally targeted such as insurance and financial services. “When it comes to FCPA, corporate ignorance is not bliss,” he said.
“Regardless of the industry or country where a US company or issuer is conducting business, an organisation should have a well-documented and communicated FCPA compliance programme in place, with monitored controls to prevent and detect potential violations,” he added.
The survey, which polled professionals from a cross-section of industries, also found that 59 per cent expected the increased enforcement activity to deter some FCPA violations in the next two years.
The online survey by Deloitte Financial Advisory Services of 1,090 executives found that 34 per cent of respondents said their companies had no comprehensive compliance plan dealing with the FCPA. This is despite the fact that 72 per cent of respondents said they expect the US government, through the Securities and Exchange Commission and the Department of Justice, to up its enforcement of the act, which bars Americans from bribing foreign officials.
When asked where they expected FCPA violations to most likely occur, 35 per cent responded that they imagine it would be from a US company’s foreign subsidiary, 28 per cent said from an agent or consultant, and 18 per cent said joint ventures or strategic partnerships.
Just under a quarter (23 per cent) of respondents attributed the lack of attention to the fact that many companies are unaware of the harsh penalties meted out for breach of compliance.
Ed Rial, Deloitte Financial Advisory Services principal, noted that FCPA enforcement is increasing significantly, even in industries not traditionally targeted such as insurance and financial services. “When it comes to FCPA, corporate ignorance is not bliss,” he said.
“Regardless of the industry or country where a US company or issuer is conducting business, an organisation should have a well-documented and communicated FCPA compliance programme in place, with monitored controls to prevent and detect potential violations,” he added.
The survey, which polled professionals from a cross-section of industries, also found that 59 per cent expected the increased enforcement activity to deter some FCPA violations in the next two years.
Party officials ordered to reveal family assets
Chinese officials will soon be required to disclose assets and investments held by their family members, in addition to their own, under new rules announced at the end of the Chinese Communist Party’s most important plenary of the year.
Xinhua News Agency reported that high-ranking members of the Chinese government will be ordered to disclose all housing and business dealings, and the jobs held by their spouses and children. This was announced by the government’s Central Commission for Discipline Inspection at the end of the Fourth Plenary Session held in Beijing.
The commission renewed its commitment to punish people who sell or buy an official post, and those who try to rig election results. It will also renew efforts to investigate abuses of power, corruption and bribery, complaints about dereliction of duty, and official misconduct.
The move is aimed to “beef up self-discipline and strengthen the management of officials whose spouses and children have emigrated abroad,” the report said.
Among the measures the commission has taken in stamping out graft include the monitoring, since July 2004, of job and college applications made by party officials and their relatives, the report said. Between July 2003 and last December, more than 880,000 officials were punished for misconduct, the commission revealed.
There was also a call for disciplinary inspection and supervisory bodies in the government to improve oversight, and communist party cadres were reminded they must present an image that is respectable and approachable, the report said.
At the end of the Chinese government’s fourth plenum, officials also acknowledged that were problems within the party that “seriously damage [its] flesh and blood bond with the people and seriously affect the solidity of [its] ruling status,” according to the report.
The party’s Central Committee also pledged that it would “resolutely fight corruption” during the four-day plenum.
Xinhua News Agency reported that high-ranking members of the Chinese government will be ordered to disclose all housing and business dealings, and the jobs held by their spouses and children. This was announced by the government’s Central Commission for Discipline Inspection at the end of the Fourth Plenary Session held in Beijing.
The commission renewed its commitment to punish people who sell or buy an official post, and those who try to rig election results. It will also renew efforts to investigate abuses of power, corruption and bribery, complaints about dereliction of duty, and official misconduct.
The move is aimed to “beef up self-discipline and strengthen the management of officials whose spouses and children have emigrated abroad,” the report said.
Among the measures the commission has taken in stamping out graft include the monitoring, since July 2004, of job and college applications made by party officials and their relatives, the report said. Between July 2003 and last December, more than 880,000 officials were punished for misconduct, the commission revealed.
There was also a call for disciplinary inspection and supervisory bodies in the government to improve oversight, and communist party cadres were reminded they must present an image that is respectable and approachable, the report said.
At the end of the Chinese government’s fourth plenum, officials also acknowledged that were problems within the party that “seriously damage [its] flesh and blood bond with the people and seriously affect the solidity of [its] ruling status,” according to the report.
The party’s Central Committee also pledged that it would “resolutely fight corruption” during the four-day plenum.
Subscribe to:
Posts (Atom)