Samsung boss faces arrest as South Korea corruption scandal grows

Special prosecutors allege that Jay Y Lee paid $36m in bribes to disgraced friend of impeached president Park Geun-hye for business favours

Prosecutors investigating a corruption scandal that has plunged South Korea into its biggest political crisis in decades are seeking a warrant for the arrest of the acting head of Samsung, the country’s most powerful conglomerate, on bribery charges.

Special prosecutors alleged that Jay Y Lee, heir apparent to the Samsung group, had paid bribes totalling more than $36m (£30m) to Choi Soon-sil, a longtime friend of the country’s impeached president, Park Geun-hye, in return for business favors.

“The special prosecutor’s office, in making this decision to seek an arrest warrant, determined that while the country’s economic conditions are important, upholding justice takes precedence,” Lee Kyu-chul, a spokesman for the office, told reporters on Monday. read more »

Moody’s to Pay $864 Million to Settle Inquiry Into Inflated Ratings

Moody’s Corp. has agreed to pay nearly $864 million to settle federal and state claims it gave inflated ratings to risky mortgage investments in the years leading up to the financial crisis.

The deal announced on Friday was struck among the New York-based rating agency, the Justice Department and the attorneys general for 21 states and the District of Columbia.

It calls for $437.5 million to go to the Justice Department and $426.3 million to be divided among the states and the District of Columbia.

Moody’s — along with the other two major rating agencies, Standard & Poor’s and Fitch — were widely criticized for giving low-risk ratings to the risky mortgage securities being sold ahead of the crisis, while they reaped lucrative fees. read more »

BlackRock Charged With Removing Whistleblower Incentives in Separation Agreements

The Securities and Exchange Commission today announced that New York-based asset manager BlackRock Inc. has agreed to pay a $340,000 penalty to settle charges that it improperly used separation agreements in which exiting employees were forced to waive their ability to obtain whistleblower awards.

According to the SEC’s order, more than 1,000 departing BlackRock employees signed separation agreements containing violative language stating that they “waive any right to recovery of incentives for reporting of misconduct” in order to receive their monetary separation payments from the firm. read more »

Tax Cheats Beware: IRS Whistleblower Awards Soar 322%

The IRS's Whistleblower Office has released its 2016 Annual Report to Congress. It includes some good news for whistleblowers, as awards have jumped 322%. That could mean more corporate worry about budding whistleblowers contacting the IRS. In 2016, the Whistleblower Office made 418 awards, totaling about $61 million. That was a 322 percent increase over the 99 awards paid in 2015. The number of claims were up too, about 6.4 percent since 2015. And case closures of whistleblower cases went up 99 percent. read more »

Rolls-Royce Reaches $809 Million Settlement Over Bribery Probes

British engineering group Rolls -Royce Plc said on Monday that it had reached settlements with authorities in Britain, the U.S. and Brazil relating to bribery and corruption involving intermediaries, which would result in a series of payments totaling about $809 million. read more »

Outgoing SEC Chair Says Congress Stifling Regulator’s Mission

SEC’s Mary Jo White criticizes SEC regulatory bill passed by U.S. House last week

Outgoing Securities and Exchange Commission Chairman Mary Jo White on Tuesday criticized legislation she claimed would harm the commission’s independence, saying recent moves by Congress would crimp its ability to protect investors and impede responses to another financial crisis. read more »

Whistleblowers’ 2013 suit ground GJ airport to halt

Original complaint alleging fraud appears headed for settlement, with a whimper

The ill-fated federal investigation that sent Grand Junction Regional Airport into a two-year tailspin was launched by a secret lawsuit that two airport critics say should result in payments of as much as $5 million to them as whistleblowers. 

Federal whistleblower laws date to Civil War era

Whistleblower, or qui tam, lawsuits are filed secretly in federal court and are intended to allow whistleblowers to be rewarded for alerting the government to fraud.

Such cases have deep roots in common law and were codified in the United States under the False Claims Act, which was enacted during the Civil War and also is known as the Lincoln Law.

Under the False Claims Act, the government may recover up to three times the amount of money it lost as a result of a defendant’s fraud. 

Former Uzbek President’s Daughter Questioned by Swiss Prosecutors

ulnara Karimova is under house arrest after disappearing from public view almost three years ago, lawyer says

The elder daughter of Uzbekistan’s late President Islam Karimov was questioned recently over money-laundering accusations by Swiss prosecutors while under house arrest in Tashkent, according to a lawyer who attended the meetings.

The account provides the first tangible information on Gulnara Karimova’s situation since the once globe-trotting popstar and businesswoman disappeared from public sight nearly three years ago.

The fate of Ms. Karimova, who Swiss prosecutors have named as a suspect in a criminal corruption probe and who U.S. prosecutors believe was the beneficial owner of a hefty bribery payment, has been shrouded in mystery since she was detained in her country in February 2014. read more »

The fall of Black Elk Energy

Former CEO John Hoffman was forced out of Black Elk Energy in 2014. Now Black Elk is facing criminal charges, and Black Elk's backer, Platinum Partners, is under federal indictment

The fall of Black Elk Energy began in New York City nearly a decade ago, with a meeting, a handshake and a loan. read more »

Britain weighs tougher laws to tackle corporate crime

Britain is considering introducing a tough U.S.-style anti-corruption regime for multinational companies and their senior executives by making them liable for failing to prevent the economic crimes of staff and agents.

Ministers on Friday unveiled a range of proposals on how to crack down on corporate fraud, money laundering and false accounting as part of a consultation on how to repair public trust in businesses and improve accountability after companies have paid billions of pounds in fines for misconduct. read more »