Author: Jorge Amador

Nicolas Puech, 81-year-old Hermés heir and major shareholder, lost his $13 billion fortune. Recently, a Swiss court ruled Puech responsible for this loss. Puech claimed Eric Freymond, his wealth manager at the time, committed “gigantic fraud” in the 24 years that he was in control of his bank accounts. In the end the court dismissed Puech’s misfortune and ruled that he could have revoked Freymond’s access at any time. https://www.thedailybeast.com/hermes-heir-nicolas-puech-has-no-clue-where-his-dollar13-billion-fortune-went

A federal judge dismissed part of an SEC lawsuit against SolarWinds and its Chief Information Security Officer, Tim Brown. The lawsuit involved SolarWinds handling of a 2020 cyber breach affecting U.S. government agencies. Ultimately, the judge ruled the SEC’s claim that SolarWinds didn’t fully disclose the cyberattacks’ impact on shareholders was based on “hindsight and speculation.” However, the lawsuit will turn to Solarwinds’ pre-breach of cybersecurity disclosures. Since this lawsuit, the SEC has new rules for when and how companies must disclose cyberattacks. https://www.wsj.com/articles/solarwinds-defeats-part-of-secs-fraud-case-over-hack-ec69169a

A Delaware court ordered Thomas Braziel, a managing partner at distressed investing firm 117 Partner based in Italy, to pay back about $1.95 million. Braziel took the $1.95 million from a receivership he oversaw to fund his own investments and purchase of luxury goods. According to court filings, Braziel used funds from the defunct financial services information company Fund.com. Braziel acknowledged the accuracy of the findings and agreed to provide restitution and to pay the investigation costs.  Braziel made a name for himself by buying claims in high-profile cryptocurrency bankruptcy cases from customers.  https://www.wsj.com/articles/ftx-claims-broker-thomas-braziel-stole-1-9-million-from-a-receivership-for-personal-gain-court-says-d3375130

U.S. law firms have significantly expanded their presence in London over the past few decades. Initially seen as a risky move, firms particularly from the U.S. such as Paul Weiss, Rifkind, Wharton & Garrison, have grown into London powerhouses. Their dominance in London has reshaped the legal market, which has challenged traditional UK law firms known as the “magic circle.” This shift has been pushed by an increased demand from U.S. private equity firms in London, which led to a surge in competitive legal talent recruitment. U.S. firms offer substantially higher pay, with their top partners earning up to $20 million annually and new lawyers reaching £180,000. Despite concerns of high billing requirements and long working hours, U.S. firms are landing top law graduates. https://www.ft.com/content/c238b2a8-7747-4ff5-9b36-c2e913b9bf89

Former Goldman Sachs banker and dual U.S. and Ghanaian citizen, Asante Berko, pleaded not guilty in federal court in Brooklyn to charges he bribed Ghanaian government officials to secure a lucrative power-plant contract for a client. Before his arraignment, Berko fought his extradition from the U.K., where he worked at Goldman Sachs’s London subsidiary. He was released on $600,000 bail. Federal prosecutors allege that Berko arranged $4.5 million in bribes from 2014 to 2017, and personally delivered funds to Ghanaian parliament members. Berko now faces charges for violating the Foreign Corrupt Practices Act and money laundering. https://www.wsj.com/articles/former-goldman-banker-pleads-not-guilty-to-charges-of-bribing-ghanaian-officials-63aac123

Germany’s financial watchdog, BaFin, criticized Deutsche Bank’s 2019 financial report, because it did not meet international accounting standards, such as  failing to disclose key details about the lender’s historic U.S. losses. According to BaFin, the bank failed to disclose €2.1 billion in deferred tax assets related to multiyear losses at its U.S. operations. The Bank also failed to disclose how it expected to generate future profits in the region, which is required under International Financial Reporting Standards (IFRS) rules. Deutsche hoped to offset the historic losses against future profits in the region. According to Deutsche Bank, BaFin’s finding “related to a footnote in our 2019 financial statements” and there was “no suggestion on BaFin’s part that there is any inaccuracy in Deutsche Bank’s 2019 accounts, and no restatement or other action is required.”
https://www.ft.com/content/0dec1baf-6a44-4bc0-9293-355e29f5256c

The Wall Street Journal surveyed compliance professionals and found that cybersecurity threats have significantly increased for businesses over the past year. Nearly all companies, particularly midsize ones with revenues between $50 million and $1 billion, reported heightened risks. The survey also highlighted concerns about regulatory scrutiny, digital transformation challenges, and geopolitical tensions impacting businesses. While challenges emerge, many companies expressed confidence in their cybersecurity compliance programs. Artificial Intelligence is also of interest to compliance professionals, although most have yet to use it as part of their compliance efforts.

https://www.wsj.com/articles/cybersecurity-risk-rose-in-past-year-say-compliance-professionals-64ad4223

A New York jury convicted Chinese businessman and government critic, Guo Wengui, for defrauding his followers of over $1 billion. Wengui was found guilty on nine of the twelve federal charges against him, including racketeering and fraud which may lead to substantial prison time and asset forfeiture. Prosecutors said that he used his influence to pitch schemes as ways to make money for personal gain while he undermined the Communist Party. Wengui used this money to fund a lavish lifestyle, which included stunning properties in New York, Connecticut, and New Jersey, a Lamborghini, Bugatti, Ferrari, a yacht and racks of Italian suits. Paul Doran, a corporate risk adviser with experience in China described Wengui as “public enemy No. 1 in China.”

https://www.wsj.com/world/china/china-tycoon-who-angered-beijing-found-guilty-of-fraud-in-new-york-35f066a5?mod=hp_listb_pos2

Operation Jackal III, an annual global law enforcement operation across 21 countries on five continents targeted online financial fraud and the West African groups behind it. It ran from April to July and resulted in about 300 arrests, over 400 identified suspects, and blocked more than 720 bank accounts. Additionally, it seized $3 million worth of assets and disrupted criminal networks involved in cyber fraud, human trafficking, and drug smuggling. Director of INTERPOL’s Financial Crime and Anti-Corruption Centre stated, “By identifying suspects, recovering illicit funds and putting some of West Africa’s most dangerous organized crime leaders behind bars, we are able to weaken their influence and reduce their capacity to harm communities around the world.”

https://www.interpol.int/News-and-Events/News/2024/INTERPOL-operation-strikes-major-blow-against-West-African-financial-crime

Canadian grocery store Loblaw Cos. and its parent company, George Weston, agreed to a C$500 million class action settlement (about US$362 million) over a bread price-fixing scandal dating back to 2001. The class action was filed in 2017 after Canada’s competition regulator raided Loblaw’s corporate head offices looking into alleged price fixing. The class action lawsuit accused Loblaw Cos. and George Weston of colluding on bread prices. The settlement included C$404 million in cash plus C$96 million from a prior customer-card program. Loblaw and George Weston apologized and have committed to compliance reforms. Lawyers for the plaintiffs said they are now prepared for trial in actions against other companies that were also alleged to be involved in the price fixing, such as Sobeys, Metro, and Walmart Canada. https://www.wsj.com/articles/loblaw-parent-george-weston-to-pay-c-500-million-to-settle-price-fixing-suit-d4abbf2a