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Walter Shaub, Bitcoin, and IPOs

Katherine O'Hara | July 7, 2017

In case you missed it, Ethics Office Director Walter Shaub resigned after differences in opinion with the administration, bitcoin offers evaders new tax havens after the Panama Papers leak, and IPO regulations are taking the spotlight in this week's rundown of compliance news from around the web.

Ethics Office director Walter Shaub resigns, saying rules need to be tougher
Washington's top ethics officer has hit the silk. Walter Shaub, (former) director of the Office of Government Ethics handed in his resignations papers this week, saying the ethics program needs to be stronger than it currently is. Shaub was pretty vocal with his opinions about the administration, especially on President Trump's need to divest himself from his business interests. But it looks like that when his words weren’t getting him anywhere, he decided to get out of Dodge.

BNP Paribas faces accusations over the Rwandan genocide
France’s biggest bank, BNP Paribas, is accused of helping to fund the 1992 Rwandan genocide. This isn’t even the first jaw-dropping allegation that’s been thrown at the bank—three years ago it plead guilty for funding Sudan’s government, which supplied the militants that wiped out thousands of citizens in Darfur. (Qatar is doing little dances of joy that the spotlight is off them for a news cycle)

SEC said to scrutinize hedge funds’ handling of hot IPO shares
IPOs, so hot right now. The SEC thinks some of them might be a little too hot, or at least used to make returns look hotter than they are. The commission is looking into whether some hedge funds might be unfairly allocating profits from IPOs to make their investments seem like they’re doing better than they are. Speaking of which...

SEC lets all firms keep parts of IPO filings secret
Normally compliance comes a heaping pile of transparency, but the SEC wants to try something completely new—incognito mode for private firms. These companies will be able to keep parts of their strategies close to the chest early during an initial public offering, making it easier for those who want to go public. Market specialists aren’t so sure. The new program is slated to begin July 10.

U.S. threatening to stop financial regulation cooperation
The U.S. is planning to go a little more stick than carrot with financial market regulations. According to German weekly magazine, Der Spiegel, President Trump is threatening tariffs on European products if they don’t open markets to U.S. meat. This comes just before the G20 summit, where countries come together to discuss things like financial regulations and tax matters. That timing, though.

Panama Papers: Germany 'pays millions' for leaked data
Eyebrows are being raised at Germany’s interpretation of “takes money to make money.” Turns out they paid €5 million ($5.7 million) to get the 11 million documents that helped break the Panama Papers scandal last year. While it’s not exactly illegal in Germany to pay for unlawfully obtained data, it’s controversial. In the meantime the Federal Crime Office (BKA) will put the inventory into electronic form to allow for detailed evaluation. Should only take a couple … months.

Prosecutors seek gag order for ‘pharma bro’ Martin Shkreli
Martin Shkreli is having some trouble keeping his opinions to himself—and prosecutors aren’t thrilled. Recently the pharma bro went on a long rant to reporters, and then potentially continued his tirade on social under a fake name. The prosecution wants a gag order to prevent tainting any future jurists, or at the very least a semi-sequestration. Assuming they can find anyone who doesn’t already have a tub of popcorn in hand.

Arrests made as China’s ‘straddling bus’ project looks more and more like a giant scam
You may remember the bus that the internet went crazy for a few years back—the one that promised to revolutionize the world of transportation as we knew it. Who cares about gridlock when you can just sail right past it? Many were excited, but some critics wondered, “But what about bends in the road? Or turning? Or vehicles taller than 6 feet? Or passing under bridges?” Despite naysayers, the Hebei-based Transit Elevated Bus Company (TEB) continued to raise money—until last week when 32 employees, including the CEO, were arrested for illegal fundraising. (There’s a pun to be had in there somewhere about driving a bus down a boulevard of broken dreams in there somewhere.)

Real Madrid's Luka Modric questioned for alleged perjury
Remember how members of Real Madrid have been under fire recently? No? Are you sure? Well the latest person in the frying pan is midfielder Luka Modric, who’s being accused of falsely testifying about his financial deals—namely the ones with a former director charged with embezzlement and tax fraud. We’ve all heard this song before.

SEC hires Congress liaison, sources say
In the wake of top government compliance and ethics officers hitting the road, eyes are starting to look at the SEC’s new liaison to congress. Quick recap: the administration and Congress have big plans to rip up post-2008 regulations they feel are too hindering, but the Senate has to approve it which seems unlikely at the moment. This leaves the SEC with a large role in what happens next, so having a body in the house to lay the groundwork of playing nice is important. (right?)

United States files civil action to forfeit thousands of ancient Iraqi artifacts imported by Hobby Lobby
Hobby Lobby is turning over a handful of ancient artifacts that may have been smuggled into the country. In July 2010, the arts and crafts company’s president, Steve Green, traveled with a consultant to the UAE to inspect the items. The consultant advised him to make sure to check sources, and that he should keep an eye out for Iraqi items that may have been looted from archaeological sites. Now Green is saying “My bad,” and promising there will be better internal controls. Oops.

Thanks for reading! Keep your eyes glued to this column for another roundup of the latest news from the wider world of compliance. And as always, please send any questions, comments or leads to katherine.ohara@complianceweek.com.