eCorporate Compliance News (eCCN)

Subscribe to eCCN and stay abreast of the latest in compliance news. Each week we scour the major news sources and summarize the top compliance-related stories for you.  We keep you informed and save you hours of reading. Each news story contains a link to its source, if you need a more in-depth look. This news service is not available anywhere else!

Stories in this weeks eCCN              Click here for the current issue of eCCN

Proposed Changes to FSGs Would Credit Compliance Programs

On January 29, 2010, the Wall Street Journal reported, “Corporations facing criminal prosecution could face reduced penalties if they meet standards for tackling white-collar crime at their companies, under changes proposed by the U.S. Sentencing Commission. Under the proposal, corporations could receive credit during sentencing if they have corporate compliance programs designed to combat white-collar crime. To qualify, a company's compliance officer must have direct access to the board of directors and be responsible for detecting criminal activity. The company must quickly report the misconduct to authorities.”

More: http://online.wsj.com/article/SB20001424052748704194504575031603625356536.html

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Volcker Urges Congress to Curb Big Banks’ Risky Investing

On February 2, 2010, Reuters reported, “White House economic adviser Paul Volcker on Tuesday told Congress to curb risky investing by big banks, warning his soul would haunt lawmakers when the next banking crisis hits if they did not heed him now. The 82-year-old former Federal Reserve chairman, whose star is rising in the Obama administration, faced tough questions from lawmakers about the White House's latest and far-reaching proposals for a crackdown on the banking industry.”

More: http://www.reuters.com/article/idUSN029951820100202

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Obama Budget Proposes More Funds for Market Regulators

On February 1, 2010, Reuters reported, “The White House proposed giving market regulators more funding to examine and police Wall Street as the government struggles to hold those accountable for the worst financial crisis in decades. Under the Obama administration's fiscal 2011 budget, the Securities and Exchange Commission would get a 10.3 percent increase in funding and the Commodity Futures Trading Commission's budget would increase by 28 percent.”

More: http://www.reuters.com/article/idUSN0118345020100201

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Koss Fraud Case Demonstrates Why Sarb-Ox Exemption Can’t Last

On February 1, 2010, CFO magazine reported, “If allegations that a finance executive pilfered as much as $31 million over five years from Koss Corp. prove true, it won't just be bad news for Koss: it may also deal a blow to those who hope that smaller, publicly traded companies will be exempted from full compliance with the Sarbanes-Oxley Act.”

More: http://www.cfo.com/article.cfm/14470842/c_14470994

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Court Dismisses Madoff Associate’s Fraud Suit

On February 2, 2010, Reuters reported, “A U.S. court has dismissed a U.S. regulator's claims that Cohmad Securities Corp and three of its top executives helped the now imprisoned swindler Bernard Madoff conduct a $65 billion Ponzi scheme. Judge Louis Stanton signed the order on Monday, fewer than six months after lawyers for Madoff's friend Robert Jaffe had asked the Manhattan federal court to dismiss the four counts in the U.S. Securities and Exchange Commission's civil fraud suit.”

More: http://www.reuters.com/article/idUSN0212195020100202?type=marketsNews

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SEC Charges Gilat Exec With Insider Trading

On February 2, 2010, Reuters reported, “The U.S. Securities and Exchange Commission on Tuesday filed an insider trading lawsuit against a Gilat Satellite Networks Ltd. executive it said used nonpublic information to profit from buying shares of a company that was looking to be acquired.”

More: http://www.reuters.com/article/idUSN0211329120100202

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SEC Admits It Mistakenly Got Galleon Wiretaps

On February 2, 2010, the Wall Street Journal reported, “The  Securities and Exchange Commission conceded in court filings that federal prosecutors mistakenly sent the agency confidential wiretap information from the criminal insider-trading case against  Galleon Group’s founder,  Raj Rajaratnam. The S.E.C. said in its filing that in December it received a limited number of wiretap communications from the United States attorney for the Southern District of New York, as part of a large production of documents made available to some defendants in the case. In its own letter the U.S. Attorney’s office said it inadvertently sent the S.E.C. the wiretap information and rejected claims that it was trying to hide the disclosure from others in the case.”

More: http://dealbook.blogs.nytimes.com/2010/02/02/sec-admits-it-received-galleon-wiretaps/

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UK Charges Count in BAE Corruption Case

On January 29, 2010, the Guardian reported, “One of BAE's former confidential agents, Count Alfons Mensdorff-Pouilly, was today charged by the  Serious Fraud Office  with bribery over arms deals. He was remanded in custody in London. It is the first ever criminal case brought during long-running corruption investigations into the British weapons manufacturer, which began more than five years ago after disclosures in the Guardian.”

More: http://www.guardian.co.uk/world/2010/jan/29/bae-mensdorff-pouilly-bribery

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SEC Bolsters Money Market Fund Rules

On January 27, 2010, Reuters reported, “U.S. securities regulators adopted rules aimed at making money market funds a safer investment after the collapse of the Reserve Primary Fund triggered a run on the $3.24 trillion market in 2008. The Securities and Exchange Commission on Wednesday voted to bolster the funds' liquidity, limit their riskier investments and to show investors that the funds may not always maintain a stable $1 share value.”

More: http://www.reuters.com/article/idUSN2718588620100127

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SEC Sets Standard for Corporate Climate-Change Disclosure

On January 27, 2010, Business Week reported, “Companies must consider the effects of global warming and efforts to curb climate change when disclosing business risks to investors, the U.S. Securities and Exchange Commission said. Guidelines approved today require companies to weigh the impact of climate-change laws and regulations when assessing what information to include in corporate filings, the commission said. The SEC is responding to investors who said companies aren’t providing enough data on the potential risks to their profits and operations from environmental-protection laws.”

More: http://www.businessweek.com/news/2010-01-27/sec-sets-climate-change-disclosure-standards-for-companies.html

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WEF Leaders Raise Concerns About U.S. Plans to Curb Bank Risk

On January 27, 2010, Bloomberg reported, “U.S. President Barack Obama’s plan to impose new rules on bank size and risk dominated talk among bankers on the first day of the World Economic Forum in Davos, Switzerland, as executives said big banks are essential and rules should be coordinated globally.

“‘We are in a global financial market and need a level playing field,’ Josef Ackermann, chief executive officer of Deutsche Bank AG, Germany’s biggest bank, told reporters today. ‘It would not be productive to have different regulatory frameworks.’”

More: http://www.bloomberg.com/apps/news?pid=20601087&sid=a4ghTiapI5Og&pos=4

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NY AG Probes Online Retail Fraud

On January 27, 2010, CNN Money reported, “New York Attorney General Andrew M. Cuomo said Wednesday his office is investigating 22 online businesses for allegedly linking consumers with discount promotions that end up charging them unauthorized fees. Visitors to online sites of retailers including Staples Inc., Barnes & Noble Inc., Avon Products Inc. and Orbitz Worldwide Inc. ‘deceptively link’ consumers to fee-based membership programs run by third party companies that charge unauthorized fees under the guise of discount offers and also receive consumers' credit card numbers, Cuomo said in a statement.”

More: http://money.cnn.com/news/newsfeeds/articles/djf500/201001271136DOWJONESDJONLINE000528_FORTUNE5.htm

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Staffing Firm Agrees to $20M Restitution in Fraud Claim

On January 26, 2010, Workforce Management reported, “A judge ordered Bellflower, California-based staffing firm Staffing Services Inc. to pay $20 million in restitution after a plea bargain was reached in a  workers’ compensation fraud  case, the California Department of Insurance announced Monday, January 25. Staffing Services allegedly misrepresented the types and number of employees in order to pay smaller workers’ comp premiums, according to the office.”

More: http://www.workforce.com/section/00/article/26/96/84.php

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Critics Cast Doubt on Chicago Mayor’s Hiring Reforms

On January 27, 2010, the Chicago Tribune reported, “Mayor Richard Daley's administration says it has made great strides in cleaning up the city's corrupt hiring system, but others say it's a muddy record of progress that raises lingering doubts about whether City Hall has embraced reform. Daley has said that this year he will seek to end federal court involvement in city personnel practices, arguing that it is time to take off the training wheels and let the city manage its hiring. At stake is how the city's 36,000 jobs get filled, how coveted overtime is dished out and how job assignments are made, and whether those decisions are made free of politics.”

More: http://newsblogs.chicagotribune.com/clout_st/2010/01/daley-claims-strides-in-cleaning-up-hiring-but-critics-voice-doubts.html

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Judge Blasts 'Corrupt' Wall Street Culture

On January 26, 2010, the New York Law Journal reported, “In sentencing former Credit Suisse securities dealer Eric Butler to five years in prison, Eastern District of New York Judge Jack B. Weinstein has condemned ‘the pernicious and pervasive culture of corruption’ on Wall Street.

“‘The blame for this condition is shared not only by individual defendants like Butler, but also by the institutions that employ them, those who carelessly invest, and those who fail to regulate,’ Weinstein wrote in the Statement of Reasons for the sentencing he issued on Friday in United States v. Butler, 08-cr-370.”

More: http://www.law.com/jsp/article.jsp?id=1202439500771&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=NW_20100126&kw=In%20Securities%20Dealer's%20Sentencing,%20Judge%20Blasts%20'Corrupt'%20Wall%20Street%20Culture

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DHB Industries Founder On Trial for Fraud

On January 25, 2010, Bloomberg reported, “David Brooks, a founder and former chief executive officer of military contractor DHB Industries Inc., committed a $185 million fraud and looted the company to pay for personal expenses, a prosecutor told jurors at a trial. Brooks and former Chief Operating Officer Sandra Hatfield are accused of insider trading as well as securities fraud and tax, wire and mail fraud for manipulating financial records to increase DHB’s reported earnings and profits. DHB, based in Pompano Beach, Florida, and now called Point Blank Solutions Inc., makes body armor for the military and police.”

More: http://www.bloomberg.com/apps/news?pid=20601103&sid=aK5NTP8MhSZM

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Swiss Court Ruling May Pull UBS Back into U.S. Court

On January 25, 2010, Business Week reported, “A Swiss court ruling that impedes the Internal Revenue Service’s ability to collect data on 4,450 UBS AG accounts may prompt the U.S. to revive a lawsuit that shaped the IRS crackdown on offshore tax evasion. The case involves an Aug. 19 agreement by UBS, the biggest Swiss bank, to settle a U.S. suit seeking data on clients suspected of dodging U.S. taxes. UBS ended the case by agreeing to hand over 4,450 accounts involving ‘tax fraud or the like.’ That accord violated Swiss law by defining fraud too broadly, Switzerland’s Federal Administrative Court ruled in an opinion released Jan. 22.”

More: http://www.businessweek.com/news/2010-01-25/ubs-tax-ruling-by-swiss-court-may-prompt-new-u-s-legal-battle.html

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Ex-Lockheed Worker Wins Whistleblower Case

On January 25, 2010, the Denver Post reported, “A former Lockheed Martin employee was retaliated against after she complained her boss was having affairs with U.S. Army soldiers in the company's Pen Pal program and billing the government for the liaisons, a federal administrative law judge has ruled. Andrea L. Brown, who was director of communications for Lockheed Martin technical operations in Colorado Springs, filed a whistle-blower complaint against the company in 2008 under the federal Sarbanes-Oxley Act. In a decision made public Monday, Judge Russell D. Pulver ruled that Brown should get her job back — along with the pay and benefits she lost.”

More: http://www.denverpost.com/news/ci_14267232

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