Global Investigations Review - The law and practice of international investigations


Wednesday, 16 September 2020

Australian regulator fines State Street for reporting failures

Australia’s financial intelligence agency has issued a AU$1.25 million (US$916,000) infringement notice to the local arm of US lender State Street for failing to report international financial transfers. 

The Australian Transaction Reports and Analysis Centre (Austrac) fined the bank AU$12,600 for each of the 99 alleged breaches of Australia’s anti-money laundering law, which requires banks to report all international financial transfers to the agency within 10 days.

State Street has 28 days to pay the fine or it could face criminal or civil penalty proceedings, according to the notice.

Lawyers have recently said that Austrac has shown its teeth in recent years and that foreign banks should be wary of its onerous reporting obligations. 

Internal investigation clears Kodak executives of US securities law breaches

US camera manufacturer Kodak published an internal investigation on 15 September that says its executives did not violate US securities laws by purchasing company stock shortly before the announcement of an emergency loan from the US government that caused the company’s stock prices to briefly rise by more than 500%.

However, Akin Gump Strauss Hauer & Feld, which conducted the investigation, found that Kodak’s legal department was under-resourced, relied on outdated internal policies, and that its general counsel was “overwhelmed” by his workload. 

Kodak said it had given the law firm “unfettered access” to company documents.

The US Securities and Exchange Commission (SEC) is reportedly investigating the matter.

FIOD searches European bank over suspected money laundering failures

The Netherlands’ Fiscal Information and Investigation Service (FIOD) has searched the Dutch branch of an unnamed European bank over allegations it violated the country’s money laundering and terrorist financing law.

The FIOD said on 15 September that the bank is suspected of failing to conduct appropriate customer due diligence, monitor customer transactions and report any unusual cash flows to the Financial Intelligence Unit between 2016 and 2018.

The FIOD said it was first alerted to the potential violations by the Dutch Central Bank.

Former world athletics chief found guilty of corruption

A French court has sentenced Lamine Diack, the former president of the International Association of Athletics Federations, to two years in detention and a fine of €500,000 after finding him guilty of corruption, according to reports.

The court found Diack guilty of giving and receiving bribes to allow athletes suspected of doping to compete in international events, such as the London 2012 Olympic Games and the 2013 World Athletics Championships in Moscow.

It is unclear if he will serve his sentence in prison or under house arrest. 

Prosecutors alleged at trial that Diack solicited £3.1 million from athletes to conceal their alleged offences and took money from Russia to interfere in doping cases targeting Russian athletes. 

Dutch authorities investigate Isabel dos Santos-owned energy business

Dutch prosecutors are reportedly investigating Exem Energy, which is owned by Isabel dos Santos, the daughter of Angola’s former president, and her husband. 

Prosecutors are reportedly examining dealings between Exem Energy and Angola’s state-owned oil company, Sonangol. Exem Energy has denied wrongdoing. 

A consortium of journalists has reported in January that Isabel dos Santos has embezzled over $2 billion from the African nation. She has denied wrongdoing and says the allegations against her are politically motivated. 

UK FCA fines London trader for market manipulation

The UK Financial Conduct Authority (FCA) announced a £100,000 fine against Fenician Capital Management trader Corrado Abbattista on 16 September for allegedly manipulating the price of financial derivatives.

The regulator alleges that between January and May 2017 Abbattista placed large orders for derivatives linked to several companies, including drinks producer Diageo and retailer Marks & Spencer, which he did not intend to fulfil to create false demand in the market – a practice known as spoofing.

The FCA said Abbattista has appealed against the decision to the Upper Tribunal at the FCA. 

GIR reported in March that the FCA had five ongoing spoofing investigations.

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