Stock promoter convicted in £100 million stock fraud trial  

Louis Petrossi, the founder and CEO of the Wealth Research Institute, was found guilty on all counts after a two-week trial in which prosecutors accused him of endorsing ForceField shares to investors without disclosing that he had been paid for his reviews. Petrossi, who pled not guilty in January, was convicted of conspiracy to commit securities fraud, conspiracy to commit wire fraud, money laundering conspiracy and securities fraud.

DOJ Foreign Corrupt Practices Act Pilot Program remains indefinitely  

On 10 March 2017 the Acting Assistant Attorney of the Department of Justice (DOJ) announced that the one-year Foreign Corrupt Practices Act Pilot Program, which was planned to end on April 5, would continue in full force for an indefinite period of time.  DOJ will begin the process of evaluating the utility and efficacy of the “Pilot Program,” whether to extend it, and what revisions, if any, it should make to it. 

FCPA whisteblower wins retaliation case  

On 10 February 2017, the US District Court for the Northern District of California entered judgment in favour of Sanford Wadler, who asserted that his former employer Bio-Rad Laboratories, Inc. ("Bio-Rad") retaliated against him in violation of the Dodd-Frank Act whistleblower protection provisions.  Wadler was previously general counsel of Bio-Rad and reported FCPA violations to the company's audit committee.  Wadler's employment was subsequently terminated by Bio-Rad's CEO. The jury found that despite Bio-Rad's falsified negative review of Wadler, his termination was based on his whistleblowing report. The jury awarded Wadler £2.2 million in wages and £3.8 million in punitive damages.  The defendants have filed a motion for a new trial.

SEC continues to award whisteblowers  

The Securities and Exchange Commission (SEC) announced on 2 May 2017, that it has awarded an estimated £380,000 to a company insider for reporting information that prompted an SEC investigation into well-hidden misconduct that resulted in an SEC enforcement action.  Additionally, on 25 April 2017, the SEC awarded an estimated £2.5 million to a whistleblower who tipped the agency with detailed and specific information about serious misconduct and provided additional assistance during the ensuing investigation, including industry-specific knowledge and expertise.

Fine of £850 million for export control violations  

On March 7 2017, in one of the largest fines ever imposed for violations of U.S. economic sanctions and export control regulations, Zhongxing Telecommunications Equipment Corporation, a Chinese telecommunications equipment seller, as well as ZTE Kangxun Telecommunications Ltd. (ZTE), agreed to pay £850 million in penalites, resulting from its violations of the Export Administration Regulations (EAR) and Iranian Transactions and Sanctions Regulations (ITSR). For further details of the enforcement action please click here.

FinCEN fines bank for anti-money laundering violations  

On 27 February 2017 the Financial Crimes Enforcement Network (FinCEN) announced an estimated £5.5 million penalty against Merchants Bank of California for wilful violations of several provisions of the Bank Secrecy Act (BSA). The Office of the Comptroller of the Currency (OCC), the primary federal regulator of Merchants Bank, identified deficiencies in the bank's practices that resulted in violations of previous consent orders entered into by the bank, as well as other violations. According to FinCEN, the bank failed to (a) establish and implement an adequate anti-money laundering program, (b) conduct required due diligence on its foreign correspondent accounts, and (c) detect and report suspicious activity. The bank's failures allegedly allowed billions of dollars to flow through the U.S. financial system without effective monitoring to adequately detect and report suspicious activity. Bank insiders directly interfered with the BSA staff’s attempts to investigate suspicious activity related to these insider-owned accounts.