Global Investigations Review - The law and practice of international investigations

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Monday, 30 March 2020

King & Spalding withdraws from Halkbank sanctions case

King & Spalding will no longer represent Turkish lender Halkbank in its high-profile sanctions and money laundering case in New York.

The firm announced it planned to withdraw as counsel in court filings on 27 March, the same day that Williams & Connolly told the Manhattan federal court that it had been hired by the bank.

Williams & Connolly said in the same filing that it had been instructed to enter a not guilty plea on behalf of its client at the bank’s arraignment hearing in Manhattan on 31 March.

US prosecutors charged Halkbank in October 2019 over its alleged role in a $20 billion scheme to illegally route oil profits through the US financial system in violation of sanctions on Iran.

EasyJet founder demands cancellation of £4.5 billion Airbus deal over bribery claims

The founder of UK airline easyJet, Stelious Haji-Ioannou, has called for the company to cancel a £4.5 billion airplane supply contract with Airbus citing the European aircraft manufacturer’s recent blockbuster bribery settlement.

Haji-Ioannou, who reportedly owns 34% of easyJet, said in a 29 March letter to company’s chairman, which was tweeted by ITV’s business and economics editor, that easyJet should cancel the order to avoid a UK government bailout.

Citing an Asia Times article about Malaysian airline AirAsia investigating its dealings with Airbus, Haji-Ioannou questioned if easyJet had investigated whether Airbus paid bribes to secure the £4.5 billion deal.

Haji-Ioannou wrote: “Did you launch an official investigation to check if similar practices were deployed by Airbus in securing the easyJet orders? If NOT, why NOT?”

European Commission requests extra €3.3 million for EPPO

The European Commission has proposed giving the European Public Prosecutor’s Office (EPPO) a further €3.3 million – a 48% increase – as part of the EU’s 2020 budget.

The commission put forward a new draft budget on 27 March. It said the rise in funds would enable the EPPO to recruit qualified staff more quickly and secure the necessary IT equipment to start processing cases.

The draft budget now needs to be approved by the European Parliament and the European Council.

EPPO’s chief prosecutor Laura Kövesi has previously complained about a lack of funding for the agency, which is due to become fully operational in November.

US prosecutors fight ex-Merril Lynch trader’s attempt to dismiss spoofing charge

The US Department of Justice has called an attempt by former Merrill Lynch trader John Pacilio to dismiss a single spoofing charge “absolutely bewildering”.

Prosecutors demanded the US District Court for the Northern District of Illinois reject Pacilio’s request, in a motion filed on 27 March.

The DOJ filed a superseding indictment against Pacilio in February, adding 15 counts of fraud and a single count of spoofing to the 2018 indictment.

Pacilio had argued on 25 March that prosecutors had based the spoofing count on a “generalized” allegation concerning unidentified trading episodes.

The DOJ attempted to refute this claim by restating, in the 27 March motion, that it alleges Pacilio engaged in spoofing between 16 July 2011 and November 2014. 

Fisheries CEO returns to handle Covid-19 fallout amid ongoing bribery probe

Icelandic seafood company Samherji has reinstated Thorsteinn Baldvinsson as co-CEO to manage the company’s response to the coronavirus crisis. 

Samheji said Baldvinsson stepped down from the role in November 2019 to protect the integrity of its internal investigation into bribery allegations against the company’s Namibian subsidiary.

Samherji said in a statement on 27 March that the internal probe, led by Norwegian law firm Wikborg Rein, will be unaffected. Wikborg Rein will report directly to the board, not the CEO, the company said.

The investigation is reviewing a whistleblower’s claims that the company bribed the former Namibian fisheries minister and other officials to secure access to government fishing quotas.

EY steps down as auditor of Finablr

EY has notified financial services company Finablr that it will no longer act as its auditor due to concerns about the company’s board, its corporate governance, and its “financial arrangements”.

Finablr, which owns forex company Travelex, said in a filing to the London Stock Exchange on 30 March that EY had cited concerns about recent events at Finablr and hospital operator NMC Health, which were both founded by Indian businessman BR Shetty.

EY also voiced concern over Finablr’s board and “recent issues” that prompted an independent review of its financial arrangements.

Finablr reportedly said on 12 March that it had launched an internal investigation into its financial situation amid suspect accounting discrepancies at NMC Health, which recently said it has uncovered billions in previously unreported debt.

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