For only the second time in its history, and for the first time against an individual, Canada has prosecuted an incident of overseas bribery. Last month, the Royal Canadian Mounted Police announced the arrest of Nazir Karigar, a Canadian citizen, under the Corruption of Foreign Public Officials Act. Canada’s CFPOA is similar to the FCPA in the U.S.

Karigar’s arrest relates to allegations that an unidentified company’s officials made a payment to an Indian government official in order to facilitate the execution of a multi-million dollar contract for the supply of a security system. Karigar was charged with one count of Corruption under Section 3(1)(b) of the CFPOA.

As discussed in Matt Kelly’s podcast today on “Anti-Bribery Enforcement in Canada,” lawyers practicing in the anti-corruption area in Canada have been expecting increased enforcement, as Canada has been criticized by the OECD for its inaction. In response, as also discussed on the FCPA Blog, Canada’s RMCP established specialized units in April 2008 to focus on “allegations of international corruption in accordance with the Criminal Code and the [CFPOA].”

Mark Morrison of the law firm Blake, Cassels and Graydon in Calgary told Matt Kelly that the CFPOA is very similar to the FCPA in its anti-bribery provisions. The key difference, he said, was that the CFPOA contains no “books and records” provision as the FCPA does, and the CFPOA is a purely criminal statute with no civil enforcement.

A big online welcome, please, for “The Defense of Raj Rajaratnam,” the newly-unveiled website that “provides factual information regarding the defense of Mr. Raj Rajaratnam.”  The home page proclaims that Rajaratnam intends to establish his innocence at trial before a jury of his fellow citizens, and it promises that the site will “provide formal responses to news items that contain inaccurate and/or misleading information about Mr. Rajaratnam.”

The site’s “Media Inaccuracies” section includes, for example, a letter to the Wall Street Journal taking issue with one WSJ reporter’s “irresponsible reliance on anonymous sources.” Perhaps growing weary of the same “perp walk” photos of him that have appears in many articles, The Defense of Raj Rajaratnam website also graciously provides 10 new photos of Rajaratnam in a more positive environment.

(via Dealbreaker)

Check out this photo of “The Enforcers” in Monday’s New York Times.

Robert S. Khuzami, center, with members of his team, from left, Kenneth Lench, Daniel M. Hawke, Cheryl Scarboro, Thomas A. Sporkin, Robert B. Kaplan and Lorin L. Reisner.

I think it must have gone down something like this:

“Alright, everyone into Rob’s office. Rob, get in the middle and cross your arms like you just caught an insider trader chewing the memory card from his cell phone. Good. Cheryl, can’t really see your face, can you move to your right just a hair–perfect. OK, ready?

[Puts down camera]… Listen, this ain’t a birthday party. Wipe those smiles off your faces! Game faces, people! Lorin, the left corner of your mouth is almost smiling–turn it back down. Ken–we only need one person folding their arms here, you’re stealing Rob’s thunder!

Kaplan! Wake up back there! You and Hawke need to remember we’re going for “don’t mess with us” here, not “skeptical” or “sad.” Just do what Tom’s doing-he’s got it. Hey, Tom, you OK? You haven’t moved in a while.

Alright, forget it. I need to go take Elaine Greenberg’s photo even though she is not mentioned anywhere in the article. Let’s just go with what we have.  Click.”

Yesterday, the Dutch central bank took control of DSB Bank after a run on the institution that appears to have been fueled by “tweets” on Twitter.

The FT reports that this weekend, talks to sell the privately-held bank to a consortium of the five biggest Dutch banks failed. Wouter Bos, the Dutch finance minister, blamed DSB, stating that the “problems at DSB Bank were not caused by the credit crisis. This is a single, relatively small bank that got itself into trouble because of its own policies, the departure of its customers, unclear communication and all the uncertainty that that caused.”

Dirk Scheringa, the owner of DSB, disagreed, and accused the Dutch authorities of leaking suggestions “that the bank was bankrupt” on Sunday night. This led to postings on Twitter that quickly caused a bank run, he said.

There are several articles on the role of Twitter in this matter in the Dutch press today, but even with Google Translate I can’t make much sense of them (see these stories).  Anyone have additional insight on this?

With “Enron” (the play) supposedly bringing down the house in London, it was probably only a matter of time before Hollywood came knocking, as well. Now comes word that following a “high six-figure deal,” Columbia Pictures has acquired the screen rights to “Enron” and the play will be adapted into a feature length drama for Columbia Pictures.  The script is reportedly being written now by the play’s writer Lucy Prebble and producer Laura Ziskin.

According to Variety, my new go-to source for securities litigation-related news, after opening at Britain’s Chichester Festival Theater in July, “Enron” transferred to London’s Royal Court last week and will move on to Broadway in the spring.

Say what you will about SEC Chairman Mary Schapiro but at least she is not, to date, actively bashing the firms she regulates on Wall Street as “socially useless” and agitating for a new multi-billion dollar tax on banks as a measure to curb large bonuses for banking executives.  Yet that is just what appears to be happening in the UK.

Yesterday, Adair Turner, chairman of the Financial Services Authority, said he would support taxes on the financial sector to prevent bonuses for executives if they continued with “excessive risk-taking.” He also made sure to throw in his opinion that some activities of London’s financial sector were “socially useless” and questioned whether the sector has grown too large. “If you want to stop excessive pay in a swollen financial sector you have to reduce the size of that sector or apply special taxes to its pre-remuneration profit,” Turner said.  He added that if “increased capital requirements are insufficient I am happy to consider taxes on financial transactions - Tobin taxes” in an effort to cut banks’ profits and reduce the pool of money available for bonuses.

Rebukes to Turner’s comments have come swiftly. Reuters reports that aides to Britain’s finance minister Alistair Darling immediately responded that such taxes were not under consideration.  In addition, a British Treasury spokesman effectively told Turner to stay out of the discussion, saying that taxation was “a matter for the Chancellor (finance minister).”

Finally, Stuart Fraser, chairman of policy at the City of London, the municipal authority for the British capital’s financial district, issued a curt reminder that the FSA’s job is not to downsize the financial sector, impose taxes, or fuel “bash the banker” sentiment. “We live in a very competitive environment. Other centres would dearly love to have business from London. If we want to shoot ourselves in the foot, they would be delighted to take the business,” he said.

Martin Luther King, Nelson Mandela, Muhammad Ali, Albert Einstein, Mother Teresa, Bill Gates… sending a man to the moon, standing in front of tanks in Tienanmen Square, the miracle of creating human life, curing disease, tearing down the Berlin Wall, climbing Mount Everest…

What is the next logical item in the sequence above? Find out below. By the way, the self-proclaimed answer to this question was seized by the Icelandic government after it collapsed and its entire board of directors resigned.

As Kevin LaCroix points out, the video contains Kaupthing Bank’s fatal last words: “We can if we think we can… We think we can continue to grow the same way we always have.”

(via The D&O Diary and Clusterstock)

I’m pretty much flabbergasted to learn that (a) someone saw fit to write a play about the Enron scandal, and (b) it is getting rave reviews!

Via Enforcement Action’s London bureau (actually, via the Twitter feed of Werner Kranenburg, of London), I learned today that “Enron” the play opened last month in Chichester and starts a run in London in September.  The Guardian called Enron “an exhilarating mix of political satire, modern morality and multimedia spectacle.”

So much for the “conditional sentences” featuring lectures at business and theatre schools proposed by the Livent co-founders following their convictions.

Today, Ontario Superior Court of Justice Mary Lou Benotto surprised many observers by handing down harsh prison sentences to the two co-founders of Livent Inc.  The judge sentenced Garth Drabinsky to seven years in jail and his partner Myron Gottlieb to a six-year term for their roles in the company’s accounting fraud.

The Financial Post reports that both men are expected to be released on bail by mid-afternoon Wednesday pending appeal of the convictions and sentence.

As discussed here, some Canadian legal experts predicted that under Canada’s more lenient sentencing precedents, the judge was likely to sentence the pair to just two or three years, with anything over four years being “unrealistic.”

North of the border, the Livent prosecution (aka “Canada’s WorldCom) moves closer to its final phase, as Garth Drabinsky and Myron Gottlieb will be sentenced tomorrow. Last month, Crown Attorneys told the court that the Livent co-founders, convicted in late March of fraud and forgery related to the company’s accounting scandal, should receive sentences of 8 to 10 years.  Drabinsky and Gottlieb, on the other hand, have asked for no jail time, but rather for conditional sentences or house arrest, with community service that would include lectures at business and theater schools across the country.

U.S. lawyers watching the case say that the defendants’ request for no jail time at all would be a non-starter here: “If this were the U.S., that suggestion would result in the entire courtroom bursting out with laughter,” said Jacob Frenkel, a former SEC lawyer.

Observers such as Richard Powers, a lawyer and director of MBA programs at the University of Toronto’s Joseph L. Rotman School of Management, who studies white-collar crime in Canada, believe that the Livent case will set an important precedent for white collar sentencing in Canada.  He stated that if the court was to accept the defendants’ suggestion of no prison time it “would make a joke out of the entire case” and “acknowledge once again that Canada is the place to go if you want to commit white-collar crime.”  Powers predicts that the judge in the Livent case will probably sentence them to two or three years, and adds that expecting more than four would be unrealistic.