Enforcement Action

Citigroup Reaches $7 Billion Subprime Mortgage Settlement

Citigroup announced that it has agreed to pay $7 billion to the Department of Justice and others to settle a federal investigation into the sale of subprime mortgages. Citi has acknowledged that it knew some of the loans were defective. Details inside.

SBM Offshore Earmarks $240 Million to Settle Bribery Case

Aug. 7—Dutch oil and gas company SBM Offshore has disclosed in an earnings report that it could end up shelling out as much as $240 million to resolve an ongoing Department of Justice investigation concerning potential bribery payments made to government officials in Angola and Equatorial Guinea. Following the conclusion of a two-year internal investigation in April, SBM Offshore revealed that it had paid approximately $200 million in commissions to agents from 2007 through 2011. Details on the potential settlement inside.

Citigroup Compliance Update Posted

SEC Takes Aim at Smith & Wesson Over FCPA Charges

The Securities and Exchange Commission has charged Smith & Wesson, a Massachusetts-based firearms manufacturer, with violating the Foreign Corrupt Practices Act. It alleges that employees and representatives of the U.S.-based parent company authorized and made improper payments to foreign officials while trying to win contracts to supply firearm products to military and law enforcement overseas. More inside.

U.K. Regulators Oppose Offering Whistleblower Rewards

U.K. regulators are recommending that Parliament not create a financial reward program for whistleblowers akin to one administered by the U.S. Securities and Exchange Commission. According to the agencies, there is no evidence that financial incentives lead to an increase in the number or quality of disclosures, and they say a reward program could undermine internal whistleblower programs. More inside.

SEC Reverses Course, Awards $400,000 to Whistleblower

The Securities and Exchange Commission has reversed an earlier decision and awarded $400,000 to a whistleblower it had previously denied. The claim was initially dismissed because a self-regulatory organization was already investigating the matter. The whistleblower later persuaded officials that he or she was “engaged in diligent efforts to correct and to bring to light the underlying misconduct in this case.” More inside.

Avon Pays $135 Million To Resolve FCPA Charges

The SEC has charged Avon with Foreign Corrupt Practices Act violations by failing to prevent payments and gifts to Chinese government officials from employees at a subsidiary, resulting in a $135 million penalty. “Avon missed an opportunity to correct potential FCPA problems at its subsidiary, resulting in years of additional misconduct,” SEC Division of Enforcement Associate Director Scott Friestad said.