The U.S. Justice Department is in the process of taking on a compliance specialist to help determine whether to prosecute companies charged with foreign bribery. Also in recent GRC news: Mead Johnson Nutrition Co. will pay the SEC $12 million to settle foreign bribery charges; and a Goldman Sachs unit will pay $1.8 million for failing to accurately report trade orders to the Financial Industry Regulatory Authority.
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U.S. Justice Department hires compliance counsel
The U.S. Department of Justice (DOJ) will hire a compliance counsel to help prosecutors decide whether companies charged with foreign bribery are victims of rogue employees or are willfully turning a blind eye to compliance and should be prosecuted.
The hire is the DOJ’s response to concerns in the business community that some companies do not get enough credit for establishing solid compliance programs that try, but ultimately fail, to prevent foreign bribery acts by conducted by employees, reported The Wall Street Journal.
The new counsel has already been chosen and is being vetted. In addition to helping DOJ decide whether to prosecute bribery claims, the compliance specialist will also aid in determining appropriate fines and whether further monitoring is necessary, Andrew Weissman, chief of the fraud section of the DOJ, told the WSJ.
The compliance counsel will also assist the DOJ’s fraud division with other investigations, including healthcare and securities charges.
Mead Johnson will pay $12M in bribery settlement
Mead Johnson Nutrition Co., a global manufacturer of infant formula, will pay $12 million to settle U.S. federal civil charges alleging that the company’s Chinese subsidiary bribed doctors and other health professionals to recommend its flagship product, Enfamil.
The Securities and Exchange Commission (SEC), which announced the settlement last week, also alleged that the Chinese subsidiary paid health professionals to give Mead Johnson patient contact information to be used for marketing purposes.
The bribes added up to $2 million between 2008 and 2013 and generated about $7.8 million in profits for the manufacturer, according to the SEC. Mead Johnson failed to correctly record the payments, and lenient internal controls allowed the subsidiary to draw the bribes from “off-the-books slush funds,” said the head of the SEC’s foreign corrupt practices unit.
The SEC said that Mead Johnson conducted internal investigations to resolve the charges, and took corrective measures such as improving accounting controls and establishing a unit to monitor compliance.
Goldman Sachs to pay $1.8M for reporting negligence
The clearing and execution unit at Goldman Sachs Group Inc. must pay $1.8 million for failing to report “a substantial number” of details about its alternative trading system orders to a Financial Industry Regulatory Authority (FINRA) auditing system. The negligence occurred over a seven-year period.
Goldman Sachs didn’t confirm or deny the charges in reaching the civil settlement. A company spokesperson said Sachs reported many of the issues to FINRA, made voluntary moves to fix the problems and aided the FINRA investigation.
Further Goldman Sachs violations included sending inaccurate order data to FINRA for more than eight years and not implementing adequate controls to prevent infractions.