Global Investigations Review - The law and practice of international investigations

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Tuesday, 23 June 2020

ProPetro finds weaknesses in internal controls

US oilfield services company ProPetro said in a 22 June market announcement that an audit committee review has uncovered weaknesses with its internal controls but has not found anything to warrant restating prior financial results.

The company is under investigation by the US Securities and Exchange Commission over its financial reporting and accounting irregularities.

The company flagged in 2019 that it may have to restate some of its financial results. 

The company said in the 22 June filing that the internal investigation also uncovered that it had failed to properly investigate whistleblower complaints. 

The company also found two instances of non-compliance with its internal insider trading policy. Former chief executive officer Dale Redman resigned from the company in March, reportedly over the insider trading issue.

New Zealand accuses Hong Kong bank subsidiary of AML breaches

The New Zealand Financial Markets Authority (FMA) has launched civil proceedings against CLSA Premium New Zealand (CLSAP), a subsidiary of a Hong Kong bank, over alleged violations of the country’s anti-money laundering law. 

The FMA said on 23 June that CLSAP “failed on numerous occasions” to conduct sufficient customer due diligence, report suspicious transactions or maintain adequate records in accordance with the Anti-Money Laundering and Countering Financing of Terrorism Act. 

The agency said the alleged violations allowed nearly NZ$50 million (US$32.5 million) in illicit funds to flow through the bank between 2015 and 2018. The bank could face a maximum NZ$2 million fine over the matter.



German prosecutors arrest former Wirecard CEO

Munich prosecutors arrested former Wirecard CEO Markus Braun on 22 June and released him a day later after he posted a €5 million bond, according to reports.

German payments company Wirecard announced last week that CEO Markus Braun had resigned with immediate effect, a day after the company announced that it is unable to account for €1.9 billion in its accounts, and after the company repeatedly and for months denied allegations that it fraudulently inflated sales and income.

Braun has not publicly commented on his arrest.

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