Biggest Compliance Stories for June, 2014 Reply

Below is our roundup for June 2014’s biggest compliance stories.  Vote for which one you think deserves the top spot!

Dodd-Frank Conflict Mineral Disclosure Deadline Reached - June 2, 2014 was the first filing deadline for SEC issuers to comply with the SEC’s conflict minerals rule under Dodd Frank.  Listed companies must report to the SEC under the statute as to what due diligence measures they undertook regarding any conflict minerals in their chain of custody.

China Continues Arrests of Top-Level Officials as Part of Official Anti-Graft Campaign - In recent weeks, Wan Qingliang party chief of Guangzhou, Xu Caihou, a former vice-chairman of the powerful Central Military Commission, and Su Rong, vice-chairman of China’s parliamentary advisory body have all been fired or are under investigation for corruption.  Thousands of Communist party officials have been investigated for corruption since President Xi Jinping took power two years ago.

SEC Brings First Anti-Retaliation Case Under Dodd-Frank Act Whistleblower Provisions – In an administrative proceeding against Paradigm Capital Management, an investment adviser to private funds, the SEC alleged that the company had demoted a head trader and removed him from his trading and supervisory responsibilities after he’d disclosed infractions by the company to the SEC.  The company was penalized $2.1 million and ordered to hire an independent compliance consultant. More…

TRACE Poll: May’s Biggest Compliance Story Reply

Vote below for what you think was this month’s biggest compliance story:

  1. Conflict Mineral Disclosure Deadline Approaches. The Appellate Court for the District of Columbia denied the National Association of Manufacturer’s emergency stay motion to block the SEC’s conflict minerals rule.  Meanwhile, lntel Corporation filed its conflict minerals report with the SEC in advance of the June 2 deadline, noting that some of their suppliers were in fact “DRC conflict undeterminable.”
  1. 11th Circuit Court Rules on Definition of “Instrumentality” under the FCPA In a landmark ruling affirming the sentences of Joel Esquenazi and Carlos Rodriguez, the court upheld a multi-factor test used to determine that Telecommunications D’Haiti, S.A.M. (Teleco) was an “instrumentality” of the government and its employees were therefore “foreign officials” as defined by the FCPA.
  1. PetroTiger CEO Indicted for FCPA Violations. Joseph Sigelman, chief executive officer of the oil and gas services company PetroTiger, Ltd., was indicted by Grand Jury in New Jersey on May 9, 2014. The indictment charges that Sigelman negotiated the terms of a kick-back scheme and paid $333,500 in bribes to obtain approval from Colombia’s national oil company, Ecopetrol S.A., for a $39.6 Million contract. The payments were masked as “consulting services” conducted by an official’s wife on behalf of PetroTiger.


TRACE Poll: April’s Biggest Compliance Story Reply

Vote for what you think was this month’s top compliance story.

  1. Anti-corruption reporting becomes more transparent in Europe. The European Parliament adopted the long-awaited directive on the disclosure of non-financial and diversity information, which requires large public-interest entities with more than 500 employees to disclose anti-corruption and bribery matters, among other things, in their management reports.

  2. U.S.-based information technology company settles FCPA charges. Hewlett-Packard Company agreed to pay a $108 million settlement with the DOJ and SEC due to allegations that its subsidiaries paid bribes in Russia, Poland, and Mexico.

  3. Dodd-Frank’s Conflict Minerals rules are put to the test. A U.S. court of Appeals held that parts of Dodd-Frank’s Conflict Minerals rules violate the First Amendment. Meanwhile, the first reported filing under the conflict minerals rule was made on Thursday April 24 by Taiwan-based Siliconware Precision Industries Co., Ltd.

  4. DOJ investigates yet another company for FCPA violations in China. Qualcomm Inc, the world’s biggest mobile chipmaker, announced in an SEC filing this month that it was under investigation by the DOJ for potential violations of the FCPA because of instances in which special hiring consideration, gifts or other benefits were provided to Chinese state-owned companies or agencies.

  5. Guinean government shakes up the mining industry. A Guinean government committee has recommended that BSG Resources Ltd., the mining arm of Israeli tycoon Beny Steinmetz, be stripped of its rights to the Simandou iron-ore project, after finding that the company had obtained the rights to Simandou through corruption.


Disclosure Requirement of Conflict Mineral Rule Held Unconstitutional: Applicability, Due Diligence, and Reporting Requirements Remain Intact Reply

2519766036_9e37579642_oOn April 14, 2014, the U.S. Court of Appeals for the D.C. Circuit held that the disclosure requirement for conflict minerals in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Act”) was unconstitutional.  In National Association of Manufacturers v. Securities and Exchange Commission, the court found that requiring companies to declare whether their products are “DRC conflict free” forced commercial speech in violation of the First Amendment.  However, the other conflict mineral requirements in the Act regarding applicability, due diligence, and reporting remain intact.[1] More…