Odebrecht scandal brought down Peru’s president, but hasn’t hurt other leaders

Peruvian President Pedro Pablo Kuczynski’s resignation over the Odebrecht corruption case may be welcome as a sign of the strength of Peru’s democratic institutions. But there’s huge irony here: Other Latin American governments — such as Venezuela’s — were much more tainted by the same corruption scandal and haven’t suffered any consequences.

Peru was a relatively small piece of the corruption scandal that shook Latin America last year when it was disclosed that Brazil’s Odebrecht construction firm had paid more than $800 million in bribes to government officials in 11 countries. read more »

SEC Whistleblower Program Proves That Honesty Can Pay

Sometimes crime pays well on Wall Street. But the SEC is doing what it can to show that honesty can also pay.

In fact, the SEC’s whistleblower program is handing out its “highest-ever Dodd-Frank whistleblower awards” to two claimants that will share “nearly $50 million,” and a third claimant that will get more than $33 million. Previously, the highest amount was a hefty $30 million paid out in 2014.

The latest milestone is also significant because it means that the SEC has rewarded 53 Whistleblowers with more than $262 million since 2012.

Sorting out what the whistleblowers did has been hidden via the SEC’s redactions, but “Claimants #1 and #2 jointly voluntarily provided original information to the Commission that led to the successful enforcement of the Covered Action pursuant to Section 21F(b)(1) of the Exchange Act and Rule 21F-3(a) promulgated thereunder,” according to the SEC’s order. “Based on our review of the record, including declarations from Commission staff who handled the Covered Action, we find the following events occurred with respect to Claimant #1’s and #2’s jointly submitted information.”

The event information has been redacted, but the SEC’s Division of Enforcement was sent “a specific and detailed whistleblower tip on Form TCR” via claimants #1 and #2. read more »

Insider-Trading Paradise: Where No One Worries About Jail Time

A stock plunges just before bad news hits, or soars ahead of a bullish headline. On Wall Street, that sounds like it could be insider trading. In Mexico, it’s more like business as usual.

Insider trading is rife in the $400 billion Mexican stock market -- and almost everyone knows it. As in the U.S., trading on non-public information is illegal. Mexico’s financial regulator has been making penalties public only since 2008, and just 28 people have been punished since then. It takes an average of more than five years for the agency to issue penalties for insider dealing. No one has been criminally charged or gone to prison, and while U.S. punishment can run into the tens of millions of dollars, fines in Mexico have added up to a mere $60,000 per perpetrator. The Mexican regulator said it only acts based on its constitutional authority and declined to comment on whether it does enough to stem insider trading. read more »

Facebook gave data about 57bn friendships to academic

Volume of data suggests trusted partnership with Aleksandr Kogan, says analyst

Before Facebook suspended Aleksandr Kogan from its platform for the data harvesting “scam” at the centre of the unfolding Cambridge Analytica scandal, the social media company enjoyed a close enough relationship with the researcher that it provided him with an anonymised, aggregate dataset of 57bn Facebook friendships.

Facebook provided the dataset of “every friendship formed in 2011 in every country in the world at the national aggregate level” to Kogan’s University of Cambridge laboratory for a study on international friendships published in Personality and Individual Differences in 2015. Two Facebook employees were named as co-authors of the study, alongside researchers from Cambridge, Harvard and the University of California, Berkeley. Kogan was publishing under the name Aleksandr Spectre at the time.

“The sheer volume of the 57bn friend pairs implies a pre-existing relationship,” said Jonathan Albright, research director at the Tow Center for Digital Journalism at Columbia University. “It’s not common for Facebook to share that kind of data. It suggests a trusted partnership between Aleksandr Kogan/Spectre and Facebook.” read more »