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Latest News

FinCEN Warns CCO of Huge Personal Fines for AML Lapses

The Treasury Department's Financial Crimes Enforcement Network notified a former chief compliance officer of MoneyGram that he could face personal fines of up to $5 million for anti-money laundering compliance failures. In November 2012, MoneyGram agreed to forfeit $100 million and enter into a deferred-prosecution agreement with the Justice Department to resolve money laundering charges. Details inside.
 

FASB, IASB Plan to Resume
Talks on Lease Accounting

The Financial Accounting Standards Board will resume talks next week with the International Accounting Standards Board to see if the two boards can agree on how to revise their joint standard on lease accounting. The boards plan to focus on lease modifications, contract combinations, and determining the discount rate. More details inside.
 

SEC Charges Two Audit Committee Chairs for Turning a Blind Eye

The Securities and Exchange Commission recently delivered enforcement actions to two audit committee chairs, a rare enforcement target, accusing both of failing to act on obvious red flags of fraudulent accounting and financial reporting. The cases involve two China companies, AgFeed Industries and L&L Energy, where the SEC says audit committee chairs continued to oversee the filing of financial statements they knew were faulty. More inside.
 

GAO Scolds SEC for Ongoing Cyber-Security Deficiencies

A new report from the Government Accountability Office warns that the Securities and Exchange Commission must improve its cyber-security efforts. A key system that processes and tracks financial information could be vulnerable to hackers and, despite having a disaster recovery plan, a key database didn't have a suitable back-up, the report said.
 

Groups Ask SEC to Make It Harder to Put Repeat Items on the Proxy

A coalition of business groups is petitioning the Securities and Exchange Commission to increase the threshold of favorable votes that a shareholder proposal must get before a company is obligated to include proposals on the same issue on the proxy the next year. Proposals must garner at least 3 percent of the total vote the first year to be resubmitted and 6 percent of votes in the second year. More inside.
 

Astellas Pharma Pays $7.3
Million to Settle FCA Violations

Astellas Pharma reached a $7.3 million deal with the Department of Justice to settle allegations that it violated the False Claims Act when marketing and promoting its drug Mycamine for pediatric use. The Justice Department has recovered a total of more than $19.1 billion through FCA cases, many of them charges against drug companies for off-label promotion. More details inside.
 

SEC Commissioner Derides Unauthorized Standard Setters

Third parties trying to set disclosure standards for public company financial reporting, like the Sustainability Accounting Standards Board, are ruffling some feathers at the Securities and Exchange Commission. Commissioner Daniel Gallagher recently protested attempts by SASB, and other groups not authorized by the SEC, to tell companies what they should disclose in their financial statements. More inside.
 

Ruling May Delay Conflict Minerals Disclosure; Won’t Stop It

Rather than providing clarity, a federal court decision this week provides even more uncertainty for companies facing a fast-approaching deadline for disclosing the use of conflict minerals in their products. While a variety of scenarios may unfold, experts are urging companies to stay the course with their preparations.
 

In-Depth Coverage

Tension Builds Over PCAOB
Plans to Overhaul Audit Reports

During discussions to explore a proposal for new auditor disclosures, preparers voiced more objection than auditors, who seemed conciliatory when addressing demands that they tell investors more about what they find during the audit. Some said it was the company's job to disclose problems. "It feels strange to have the auditor giving information other than the basic audit steps," said Monty Garrett, vice president of finance for Verizon.
 

Anti-Corruption Enforcement Widens Nets to More Industries

Global regulators are looking beyond the usual suspects for potential violations of bribery and corruption laws. According to a new report, enforcement actions are quickly piling up in industries that haven't had much exposure in the past, such as retail, technology, and entertainment. Regulators are "reaching into industries that traditionally have not been thought of as posing high FCPA risk," says Laurence Urgenson, a partner with law firm Mayer Brown.
 

Extraction Payment Disclosure Moves Forward, Despite Delays

The Securities and Exchange Commission will rewrite a Dodd-Frank Act requirement that oil, gas, and mining companies disclose payments they make to foreign governments. When remains unclear, but some multinational companies, now facing similar regulations around the world, are moving forward and voluntarily reporting the expenditures. Full details inside.
 

FDA Cautions Drug and Medical Companies on Promotion Pitfalls

The Food and Drug Administration is urging drug and medical device companies to use caution when making product claims on social media, during interviews, in investment materials, and in other public communications. "There's the possibility that the FDA could view materials as promotional even if the company might not have thought of them that way," says Julie Tibbets, a partner in the FDA group at law firm Alston & Bird.
 

High-Speed Trading Under Siege

A new book, an FBI crackdown on insider trading, and plenty of populist rhetoric is putting the heat on firms that conduct high-frequency trading. The big question is what, if anything, regulators will do to level the playing field? Some ideas include a tax on HFT and "speed bumps" to slow order entries, but some say plenty of rules are already in place. More on the debate inside.
 

New Leadership, Same Priorities for the DoJ’s Criminal Division

As Leslie Caldwell awaits Senate confirmation to become assistant attorney general and the new chief of the U.S. Department of Justice's Criminal Division, many are wondering what the transition will mean for the agency's enforcement priorities. During her confirmation hearing, she testified that she intends to enforce criminal laws vigorously and "apply them with equal force, whether the wrongdoing occurs in a boardroom, across a computer network, or on a street corner." More details inside.
 

Columnist 

In Praise of the Under-Used
FCPA Opinion Release Process

When dealing with the Foreign Corrupt Practices Act, that old idea that it's better to ask for forgiveness than permission doesn't work well. What does work well is the Justice Department's opinion release process, which gives companies views on whether specific actions would violate the law. Inside, columnist Thomas Fox looks at some of the latest opinion releases and concludes that the Justice Department responds to well-reasoned arguments better than many might think.
 

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