Em 10 anos, quatro mil foram expulsos do serviço público por corrupção

Isabella Souto 31/12/2012 Estado de Minas

Este é o número de servidores federais demitidos por atos de improbidade. Apesar disso, tem sido difícil punir os culpados com prisão e recuperar o dinheiro que eles desviaram

Exonerados do serviço público por atos de improbidade administrativa, servidores corruptos podem ser beneficiados pela morosidade da Justiça brasileira. Graças à estrutura precária do Judiciário e à infinidade de recursos previstos em lei, os réus muitas vezes se veem livres de punições como a devolução de dinheiro aos cofres públicos e até mesmo prisão. E não é pouca gente: para se ter uma ideia, nos últimos 10 anos perderam cargos na União por desvios 4.021 funcionários – o equivalente a 0,75% do total de 536.223 servidores ativos.

O caso mais comum é de servidores que usam do cargo para beneficiar a si próprios ou a outra pessoa, como por exemplo fraudar uma licitação para ajudar determinada empresa. Mas há também vários exemplos de enriquecimento ilícito e desvio de dinheiro público. O processo administrativo que pode culminar na expulsão ou mesmo perda de aposentadoria leva de um ano a 18 meses, período que vai depender do número de pessoas envolvidas e da complexidade do crime cometido. Tempo considerado pequeno, se for levada em conta a média de tramitação de processos na Justiça.
“O problema é que enquanto o processo administrativo leva um ano, o criminal ou cível demora muito mais, podendo levar até à prescrição do crime. É preciso que se modifique o arcabouço legal para garantir a punição”, argumenta o secretário-executivo da Controladoria Geral da União (CGU), Luiz Navarro. Ele lamenta ainda que muitos casos não vão parar no Judiciário, pela dificuldade de provas, necessárias para que o processo não seja desqualificado nos tribunais.
O processo envolvendo servidores tem início no próprio órgão de lotação com a tomada de contas especial para apurar os fatos e quantificar os valores desviados. A partir daí segue para a CGU e Tribunal de Contas da União (TCU), encarregado de julgar o caso. Cabe à Advocacia Geral da União (AGU) a tarefa de ajuizar ações judiciais para ressarcimento de recursos e sanção penal aos acusados.
Mas, ainda que eles possam se livrar das penas, Luiz Navarro lembra que só o fato de não ter direito a uma aposentadoria já é uma grande perda para os acusados. E mesmo quem já se aposentou pode perder o benefício. Nos últimos 10 anos, foram 259 casos. O pedido de devolução do vencimento recebido durante a ocupação do cargo, no entanto, não tem sido acolhido pelo Judiciário.
SEGREDO Relatório disponibilizado pela CGU com dados até novembro deste ano mostra que 2011 foi o ano em que mais servidores deixaram seus cargos (564), e que o Rio de Janeiro foi o estado onde mais pessoas foram condenadas (517) no decênio. Minas Gerais ocupa a 6ª posição, com 123 demitidos. E a vassoura foi passada com mais força no Ministério da Previdência Social (MPS), líder do ranking de expulsões, com 992 pessoas, ou 2,466% da folha de pessoal. Uma explicação dada por Luiz Navarro é que se trata de uma pasta que tem um efetivo grande e lida com muitos recursos.
“Não é segredo para ninguém que há várias tentativas de fraude na Previdência. É uma estrutura que lida com muito dinheiro e de forma muito pulverizada. Há representantes do INSS em diversos estados, por isso há uma fragilidade maior”, disse. Por outro lado, para ele o número pode refletir um trabalho pesado de controle pela corregedoria do INSS. “Ter mais expulsões pode mostrar também    que o sistema de combate à corrupção está funcionando”, completou.
Prisões pela PF
Ao longo de 2012 a Polícia Federal prendeu 102 servidores públicos nas 287 operações deflagradas – o menor número desde 2003. Naquele ano, foram 122 prisões em 16 operações.Já 2008 foi o ano em que foram feitas mais apreensões: 396 servidores presos em 235 operações realizadas pelos policias.  A alegação da PF para a queda na estatística é legislativa: a Lei 12.403/11 teria alterado regras referentes a prisão processual, pagamento de fiança e liberdade provisória. Pela nova lei, a prisão preventiva, por exemplo, passou a ser determinada apenas pela Justiça e para casos mais específicos, como aqueles em que foi empregada violência, o investigado já tenha sido condenado ou em que haja real possibilidade de fuga.

Small companies need to pay heed to anti-corruption matters

 by  Jennifer Brown December 31, 2012

RCMP may be targeting big companies now but enforcement is becoming more stringent

It’s still early days when it comes to the enforcement of Canada’s anti-corruption legislation, but some companies may still not be ready should the RCMP come calling, says a senior counsel with Barrick Gold Corp.

“I think what Canadian companies have to come up to speed on is all of the learning and education that comes out of the U.S. prosecutions that are being adopted here in Canada. They should be tapping into that knowledge,” says Jonathan Drimmer, vice president and assistant general counsel at Barrick Gold Corp.
“In the last couple of years, the RCMP has been enforcing in a more serious way and there is no way to reach any other conclusion than they seem to be fairly serious about reaching resolutions,” says Drimmer. “They are on a serious enforcement tract.”
Considered a leading speaker on anti-bribery and corruption in the United States, Drimmer will be speaking at an anti-corruption and compliance conference being held in Toronto Feb. 20-22. He says while big companies such as SNC Lavalin are in the headlines right now, small to mid-size operations could easily be targets for the RCMP as it seeks to enforce Canada’s Corruption of Foreign Public Officials Act.
“It certainly feels like they’re sending a signal that they’re going to start with an iconic Canadian company and pursue it aggressively,” says Drimmer. “You could certainly see relatively new prosecution entities wanting to make a splash with a case against a big name as a means of establishing themselves and sending a signal. SNC is important because it is an iconic company.”
In Sept. 2011, the RCMP executed a search warrant at SNC’s Oakville, Ont., office. In April 2012, the RCMP charged two Canadians and former SNC employees, Ramesh Shah and Mohammad Ismail, with violating the Corruption of Foreign Public Officials Act.
In November, Quebec’s special anti-corruption squad arrested former CEO Pierre Duhaime. SNC’s former president is accused of fraud, conspiracy, and forgery in relation to the $1.3-billion contract to build McGill University’s new super-hospital.
“But it’s also important for the small and medium-sized companies to understand they can also be a target and they can’t say, ‘We’re not SNC so we’re safe.’ Based on the public disclosures of SNC, it looks like fairly traditional kinds of bribery you see out there,” says Drimmer.
For large multinationals like SNC, he says the day has passed for loose anti-corruption controls.
“The reality is you look at the fact this [SNC] is about situations in Bangladesh, Libya, and Montreal and you think they really must have had seriously lax controls. This isn’t one operating unit, not just one project — this does seem to be more of a global pattern for them. I would be pretty nervous if I was on their board. I like SNC and we work with them, but you look at that span and you wonder about the strength of their systems.”
Drimmer, who is based in Washington, D.C. and Toronto, was a partner at Steptoe & Johnson LLP where he helped run the anti-corruption practice. Barrick was a client before he went to work for the company.
“Somehow they managed to talk me into going in-house,” he says.
He will be leading a session at the second annual Canadian and Global Anti-Corruption Compliance Conference called “Effectively complying with government investigations.” He will discuss the current priorities of anti-corruption units, what to expect with an investigation by the RCMP, and how to respond. Some of the current investigations he will refer to include one involving Calgary-based mining company Blackfire Exploration Ltd. In September, the RCMP raided the office of the Canadian mining company alleging in an affidavit that it funnelled bribes into the personal bank account of a small-town Mexican mayor to ensure protection from anti-mining protesters. The company has not been charged and says it is co-operating with the RCMP investigation.
Drimmer will also address cross-border corruption and bribery investigations through assessing how enforcement is co-ordinated between regulatory bodies in different countries.
“A lot of it has to do with interfacing with government authorities in a multi-jurisdiction investigation and how you deal with the different investigation authorities,” he says.
Barrick has a dedicated anti-corruption compliance program that is consistent with what’s going on in the United States.
“We want a level playing field for what we’re doing and we try and operate honestly and ethically everywhere we are. We are diligent in our compliance efforts and we think everyone else should be too, just to level the playing field,” says Drimmer.
The upside to all the developing anti-corruption legislation and enforcement, Drimmer notes, is when it comes to making acquisitions, partnerships, and joint ventures, the increased regulatory framework means companies can be more confident when others say they’re obeying the law they won’t get into trouble for doing business with them.

Risk Management Resolutions for 2013

Susan Palm DEC 28, 2012 9:00am ET AMRICAN BANKER

In the last few years, this notion of risk has taken center stage.

Today, risk is marked by increasing complexity and velocity, and in light of our mobile, social and big-data landscape, there is urgency around proactively identifying and managing risk. As such, organizations are reassessing fundamental risk management strategies and best practices needed to create and sustain a thriving business.

Risks today are interconnected and horizontal, running across departments and business units. In conversations with CEOs, board members and banking executives, there are a few key overlapping risk areas that are most top of mind going into 2013.

Strategic risk is more connected to compliance risk. New regulations are impacting how banks make money and develop products. There are complexities resulting from the Durbin Amendment, new capital requirements under Basel III and increasing costs associated with understanding and adhering to the expansive Dodd-Frank rules. The demand for mobile payment products exists, but the uncertainty around consumer compliance and vendor governance creates additional hurdles and costs. Product development lifecycles expand as banks take time to review and understand existing and expected rules.

Compliance risk is complex. "Fair lending" requirements seem to impact most products offered by banks. Every loan, every overdraft and every mortgage default resolution requires a fresh eye.

Reputational risks are increasingly linked to operational missteps and compliance violations, civil money penalties and fines. Thanks to social media, pervasive content sharing and strong opinions are the new norm. Smartphones, real-time newsfeeds and geo-located review sites enable stakeholders to publish content that can put entire organizations – or individual employees – in the hot seat. Compliance violations are headline news and penalties can impact earnings.

Operational risk is unavoidable. A greater reliance on vendors and third-parties, and a vulnerable IT environment (as witnessed by recent distributed denial-of-service attacks), means that banks no longer have complete control of their business operations.

Prior to the financial crisis, banks were encouraged to take risks and the government promised to insure their deposits and act as the last resort lender. Elijah Brewer, professor of Finance at DePaul University and former economist at the Federal Reserve of Chicago shared with me some facts he presented at Lawrence University in October 2012: Research shows that roughly 60% of financial firms' liabilities worth an estimated $25 trillion had access to some type (explicit or implicit) of government safety net at the end of 2009. This kind of support for bankers can distort their incentives, and could cause banks to take excessive risks in their loan portfolios. It is this type of behavior that resulted in the probability of default among subprime lenders reaching alarmingly high levels from 2007-2009.

Since then, the government has responded swiftly, raising lending standards and capital requirements. Furthermore, banks have broadened their focus to assess the quality of a customer's underlying assets before approving loans. According to a 2012 research paper written by Minh Nguyen, macroeconomic researcher at Lawrence University, "Lending standards and the corresponding screening process have gotten stricter, and therefore credit risk is likely on the decline." As a result of scrutiny from their boards, a tighter review process and more frequent loan reviews, most banks have a better handle on their credit risk going into 2013.

When it comes to New Year's resolutions, there are plenty of best practices to consider. Some of the most successful banks are rethinking their approach to risk management and have defined their business processes and linked them to risks, controls, policies and even their vendors. This helps ensure that stakeholders can collaborate to assess the impact of key risks on broader business objectives. Successful banks are also focusing on education and employee training courses.

Additionally, successful banks are establishing a formal enterprise risk management department that creates frameworks and processes to routinely assess risk, ensure continuous monitoring and provide "enterprise-level" reporting to management and the board. The EVP of Enterprise Risk is emerging as a key role, but more than ever, banks are looking to every single employee as a risk owner acting as the first line of defense.

Audit departments are also tying resources to real risk exposures, and audit plans themselves are becoming risk-based, not calendar-based. Auditors are also moving away from merely executing audit-related tasks to analyzing trends and connecting the dots.

Lastly, successful banks are tying compensation to risk management by establishing performance scorecards that allocate 10%+ of variable compensation to metrics around audit findings, repeat findings, closed issues, risk self-assessments and scheduled control testing.

No doubt the uncertainties facing banks will continue, and risk management will continue to require more innovation, more resources and more qualified people. 

Susan Palm is vice president of industry solutions for MetricStream, a provider of enterprisewide governance, risk, compliance and quality management solutions.

Picture Source: Google search.

Construtora MRV volta à "lista suja" do trabalho escravo em nova atualização

28/12/2012 - 19:00

Principal construtora do programa Minha Casa Minha Casa é reinserida no cadastro por conta de outro flagrante. Empresa havia conseguido forçar saída graças a liminar

Daniel Santini e Maurício Hashizume

A MRV Engenharia, uma das principais construtoras do país, e mais 55 empresas e pessoas físicas foram incluídas na atualização de dezembro do cadastro de empregadores flagrados explorando pessoas em situação análoga à de escravos, a chamada "lista suja" do trabalho escravo. Mantida pelo Ministério do Trabalho e Emprego (MTE) e pela Secretaria de Direitos Humanos da Presidência da República (SDH/PR), a relação é considerada uma das mais importantes ferramentas na luta pela erradicação da escravidão contemporânea no Brasil.

A lista serve como parâmetro para bancos na avaliação de empréstimos e financiamentos e para empresas na contratação de fornecedores. As signatárias do Pacto Nacional pela Erradicação do Trabalho Escravo, acordo que reúne alguns dos principais grupos econômicos do país, comprometem-se a não realizar transações econômicas com os que têm o nome na relação.

Antes de serem incluídos, todos têm chance de se defender em um processo administrativo. Além das inclusões, também foram divulgadas as exclusões. São empregadores que permaneceram por dois anos na relação, quitando débitos trabalhistas e cumprindo todas obrigações previstas na portaria interministerial que criou a lista.

Flagrante foi na obra do Edifício Cosmopolitan, em Curitiba Fotos: Divulgação/MTE

A MRV foi reincluída no cadastro agora devido a um flagrante de escravidão na construção do Edifício Cosmopolitan, em Curitiba (PR), onde 11 trabalhadores foram resgatados em 2011. É a segunda vez que a construtora entra na relação. A primeira foi na atualização de julho de 2012, quando foram considerados flagrantes de escravidão nas obras dos condomínios Parque Borghesi, em Bauru (SP), e Residencial Beach Park, em Americana (SP), ambos também de 2011.

A reportagem tentou por e-mail e telefone ouvir representantes da construtora sobre a nova inclusão. Ninguém da assessoria de imprensa, porém, foi encontrado nesta sexta-feira, 28.

Dormitório dos trabalhadores. Colchões
no chão e espumas amarradas

Minha Casa Minha Vida
A empresa, uma das principais construtoras do Programa Minha Casa Minha Vida, do Governo Federal, chegou a ter a concessão de crédito suspensa pela Caixa Econômica Federal por ter entrado na lista. Após acionar a Justiça, porém, a MRV foi beneficiada por liminar concedida em 48 horas pelo ministro Benedito Gonçalves, do Superior Tribunal de Justiça, que suspendeu a inclusão no cadastro. Com faturamento bruto de mais de R$ 2,5 bilhões em 2011, a empresa esta entre as sete maiores construtoras do país, de acordo cominformações da Câmara Brasileira da Indústria da Construção, organização que reúne 62 sindicatos e associações patronais do setor.

O avanço no setor de construção de habitação popular garantiu o crescimento e conquistas. A empresa terminou 2011 como a construtora com maior lucro das Américas, segundo a Economatica, e alcançou o posto de terceira maior construtora brasileira no ranking da ITC, ambas consultorias empresariais que fazem levantamentos sobre o setor.

De olho em novos investimentos do governo federal em programas de moradia, o presidente e fundador da MRV, Rubens Menin Teixeira de Souza, defendeu a revisão de valores do programa Minha Casa Minha Vida em palestra para analistas em agosto. Rubens é um dos seis brasileiros incluídos em 2012 na lista de bilionários organizado revista Forbes. 

A ascensão da MRV, porém, tem sido marcada por problemas. Além dos flagrantes de escravidão, a empresa enfrenta questionamentos também relacionados ao que o Ministério Público do Trabalho (MPT) classifica como exploração irregular sistemática de mão de obra nos canteiros. No primeiro semestre o MPT fez representação inédita acusando a empresa de "dumping social" à Secretaria de Direito Econômico do Ministério da Justiça (SDE/MJ) solicitando abertura de um procedimento administrativo para apuração do conjunto de infrações que envolvem a empresa no âmbito do Conselho Administrativo de Defesa Econômica (Cade).  

Confira abaixo as inclusões e exclusões da atualização divulgada:

Inclusões e Exclusões da "Lista Suja" do Trabalho Escravo

Entraram em 28/12/2012

Ademir Furuya    311.073.381-15
Adolfo Rodrigues Borges    013.202.708-91
Agro Mercantil Baseggio Ltda    83.507.137/0001-64
Agropecuária Pôr do Sol Ltda - ME    00.198.189/0001-79
Ambiental Paraná Florestas S. A.    76.013.937/0001-63
Ana Salete Miotto Lorenzetti    369.643.879-00
Antônio Carlos Françolin    627.916.998-72
Antônio Roberto Garrett - ME    13.627.789/0001-57
Carvan Indústria e Comércio de Carvão Vegetal Ltda - ME (PLANTERRA Comercial Ltda - EPP)    04.185.934/0001-04
CIFEC Compensados da Amazônia Ltda    04.470.498/0001-07
Cleiva Alves da Silva - ME    04.598.076/0001-11
Complexo Agroindustrial Pindobas Ltda    28.477.313/0010-45
Conrado Auffinger    294.843.919-15
Cooperativa Agroindustrial do Estado do Rio de Janeiro Ltda - COAGRO    05.500.757/0001-68
Coracy Machado Kern 084.221.251-53
Décio Pacheco & Cia Ltda    76.986.702/0001-58
Dilcelani Silva do Prado    985.730.801-59
Edilson Lopes de Araújo    967.023.704-15
Elizeu Sousa da Silva    698.837.183-49
Emídio Nogueira Filho    661.389.738-87
Ervateria Giotti Ltda – EPP (Giott e Basi Ltda EPP)    03.744.353/0001-94
Ervino Gutzeit    009.180.752-20
Francisco Gil Cruz Alencar – EPP    05.633.466/0001-48
Geraldo Otaviano Mendes    909.298.296-20
Gilberto Afonso Lima de Moraes    508.651.372-34
Green Ambiental Projetos e Execuções Ltda – ME    03.399.173/0001-12
Hélio Duarte Soares    044.549.318-60
Jairo Luiz Alves    035.734.866-49
José de Paula Leão Junior    745.499.798-87
José Essado Neto    015.866.531-72
José Gonçalves Rolo    368.166.398-04
José Pereira Barroso    163.045.602-06
José Queiroz    004.699.636-20
Josué Agostinho da Silva    045.162.494-72
Liro Antônio Ost    163.090.060-53
Luiz César Costa Monteiro    319.833.161-72
Luiz Ney de Lima    523.463.742-53
Marcelo Kreibich    430.066.711-04
Marcos André Mendes de Castro    627.682.202-72
Marcos Nogueira Dias    066.315.332-87
Markus Josef Dahler    035.394.498-09
MRV Engenharia e Participações SA    08.343.492/0002-00
Obiratan Carlos Bortolon    445.452.319-34
Onivaldo de Oliveira Paracatu    450.490.501-97
Priscilla Bressan Bagestan    015.780.849-11
Renato Sérgio de Moura Henrique    989.028.061-20
Ronaldo Rebert de Menezes – ME    09.036.764/0001-01
Rubens Ramos de Moura    001.705.931-34
Rubens Roberto Rosa    955.424.858-04
Selson Alves Netto    159.949.706-97
Sigma Florestal Indústria e Comércio Ltda - EPP    08.259.718/0001-09
Tárcio Juliano de Souza    654.016.702-49
Transportadora M G Ltda – ME    22.715.262/0002-56
Valdemar Osvaldo Gonçalves    209.518.689-34
Welson Albuquerque Ribeiro Borges    448.935.741-91
Wester Gude Butzke    714.761.992-72

Clique aqui para conferir mapa com a localização de todos os flagrantes

Saíram em 28/12/2012

Ademar Teixeira de Barros    193.494.086-00
Agroflorestal Tozzo S/A    02.298.006/0002-01
Agropecuária São José Ltda.    03.141.488/0001-65
Airton Fontenelle Rocha    026.711.583-00
Airton Rost de Borba    336.451.750-91
Antônio Assunção Tavares    049.302.073-04
Antônio Luiz Fuchter    138.445.129-34
Ari Luiz Langer    300.237.779-15
Bioauto MT Agroindustrial Ltda.    08.645.222/0002-54
Cleber Vieira da Rosa & Cia. Ltda.    09.025.835/0001-70
Dario Sczimanski    026.596.899-20
Diego Moura Macedo    992.103.803-63
Dissenha S/A-Indústria e Comércio    81.638.264/0007-62
Edésio Antonio dos Santos    130.382.903-78
Elcana Goiás Usina de Álcool e Açúcar Ltda.    08.646.584/0001-89
Ervateira Regina Ltda.    84.585.470/0001-54
Espedito de Bertoldo Galiza    066.925.083-04
Esperança Agropecuária e Indústria Ltda.    06.385.934/0008-41
Fabiano Queiroz    876.184.946-49
Isaías Alves Araújo    257.529.951-91
João Ribeiro Guimarães Neto    127.367.591-68
Madecal Agro Industrial Ltda.    83.053.777/0002-22
Manoel Luiz de Lima    117.134.109-15
Nelcimar Borges do Prado    039.738.081-04
Nivaldo Barbosa de Brito 291.805.382-15
Roberto Sebastião Pimenta    223.128.116-34
Sebastião Levi de Carvalho    011.690.681-20
Valdivino Barbosa da Silva    268.106.702-20
Valtenir João Rigon     680.445.349-20
Von Rommel Hofmann Peixoto    001.693.997-29
Wanderley Rabelo de Andrade    376.882.436-53
Clique aqui para consultar a lista completa atualizada

Veja abaixo reportagens sobre atualizações anteriores:

Atualizações anteriores

Confira o histórico completo da "lista suja"*

Setembro de 2005 - Lista suja de empregadores aos olhos de todos
Novembro de 2005 - Ex-prefeito de Santos é incluído na 4ª atualização
Julho de 2006 - Senador Ribeiro e acusado de matar Stang na lista
Dezembro de 2006 - Libertação recorde está na nova "lista suja"
Dezembro de 2006 - Libertação recorde foi inserida por equívoco
Julho de 2007 - Nova "lista suja" inclui pela primeira vez AM, CE e SC
Dezembro de 2007 - Atualização traz reincidentes e grandes empresas
Julho de 2008 - Pecuaristas, usineiros e carvoeiros entram na lista
Dezembro de 2008 - Juiz e proprietários em dez estados na lista
Julho de 2009 - "Lista suja" adiciona produtores da fronteira agrícola
Dezembro de 2009 - Cosan e mais 11 entram para a "lista suja"
Julho de 2010 - Governo divulga atualização da "lista suja"
Dezembro de 2010 - "Lista suja" inclui 88 novos empregadores
Julho de 2011 - Com 48 inclusões, "lista suja" chega a 251 registros
Dezembro de 2011 - Atualizada, "lista suja" chega a 294 nomes
Julho de 2012 - MRV e empregadores ligados à política entram na lista

clique na data para ler a notícia

  * desde a criação do sistema de consultas da Repórter Brasil (a primeira Lista Suja foi publicada em novembro de 2003)

Confira mapa de todos os flagrantes que resultaram nas inclusões desta atualização:

Visualizar Atualização semestral da "lista suja" do trabalho escravo em um mapa maior

Montreal’s corruption culture ‘needs to be wiped out,’ whistleblower says

LES PERREAUX MONTREAL — The Globe and Mail Published Thursday, Dec. 27 2012, 8:20 PM EST

This article is part of Next, The Globe's five-day series examining the people, places, things and ideas that will shape 2013.

A man who helped blow the lid off of years of corruption in Quebec says one major chore remains in 2013 if Montrealers want their city to have a chance at a squeaky-clean slate.

Every single elected official who has been around Montreal city hall for more than a few years must be thrown out of office, according to André Cédilot, a long-time crime writer who first blew the whistle on corruption in the greater Montreal region in the early 1990s. He was also responsible for some of the more recent major scoops that led to the Charbonneau Commission and the establishment of an anti-corruption police unit.

In 2013, Montrealers will have their chance to throw the bums out. A civic election will take place in November, punctuating a year that will see both the Charbonneau Commission and the province’s anti-corruption squad hit full stride while the first kickback prosecutions go to trial. The revelations of 2013 may make 2012 look like a mere preface.

One after another, officials from the now-resigned mayor, Gérald Tremblay, on down have maintained they did not know what was going on among corrupt officials who fixed contracts, signed off on inflated bills and overlooked fraud in return for bribes. The systematic theft went on for years and cost taxpayers in Montreal and across the province hundreds of millions of dollars.

Mr. Cédilot doesn’t buy the denials. The former journalist made his living busting corruption and splaying it across the front page. Just before he retired, he co-authored a definitive book on the mob in Montreal, Mafia Inc., with his partner in crime coverage, André Noël, who retired to become an investigator with the Charbonneau Commission. Mr. Cédilot has known about the rot going back 25 years, and cannot believe any long-time councillor who still haunts city hall could have not noticed it.

“It’s become a culture that needs to be wiped out,” Mr. Cédilot said. “We need an entirely new generation of politicians if we’re really going to change anything. In Laval, too.”

Even since the departure of Mr. Tremblay and the resignation of the mayor of Laval, Gilles Vaillancourt, Mr. Cédilot and other city watchers have noted a remarkable inability to change among civic leaders in and around Montreal.

In Laval, the interim administration is coaching city staff on how to answer questions from investigators in the wake of at least nine raids by police on City Hall and the mayor’s office and home. Montreal’s interim mayor, Michael Applebaum, whose election by city council was noteworthy because he is a rare anglophone in the office, has presided over a city hall that has descended in record time into factionalism, backbiting and halting efforts at transparency.

“Honestly, I’m completely gutted by what I’m seeing, after all we’ve been through,” Mr. Cédilot said. “This is grave corruption, the people are indignant, and they’re still blowing smoke in our eyes.”

For months now, Montrealers have batted around ideas for thwarting corruption, from bureaucratic suggestions such as independent oversight committees to watch municipal official to quixotic legal manoeuvres such as suing mobsters and other fraudsters to try to get the millions back.

Some have suggested abolishing the city’s party system. Rare in Canadian municipal politics, Montreal’s civic parties tend to come and go with mayoral candidates and have more to do with building expensive electoral machines and raising money than joining ideological forces.

Cathy Jackson, a 54-year-old Montreal nurse, said she has become quite cynical about it all and regrets that she and her fellow citizens have failed to get more forcefully involved in how their city is run. Montreal, like many municipalities, has habitually dismal voter turnout.

Even the resignation of the mayor leaves her little hope for change. “It’s a big cleanup we need, and what we get is more smoke and mirrors. I don’t really think anything is going to come out of any of this,” she said. “The leaders have to want to clean up the act here. We’ll see about that. We also need some people to go to jail.”

More than anything, the grassroots has to rise up in the same way the city’s student movement mobilized opposition to tuition hikes and the Charest government, she said. She wishes the student protests had expanded and persisted as a forceful call for change on corruption. “A lot of us are just too busy working and paying taxes,” she said.

Many people underestimate how difficult it will be to loosen the grip of the violent mobsters who are behind much of the exposed rot, Ms. Jackson said. “The reality in the whole mess is that these bad guys are really bad. They do threaten, they do hurt. They know exactly how to do it. They’re thugs with their own set of rules, they’re well entrenched, I’m not sure how a citizen can resist.”

More than anything, Montrealers seem to long for strong and new leadership. Early potential candidates bandied about in the city include the popular and populist federal Liberal Denis Coderre and Gilbert Rozon, the businessman who founded the Just for Laughs comedy festival.

It’s far from clear either man, the former an experienced political operator in the city’s backrooms, the latter an enthusiastic Montreal booster, would ruthlessly wield the heavy shovel required to clean out the mess at Montreal City Hall.

Benoit Gignac, a novelist who worked for former mayor Jean Doré and wrote a biography of his long-serving predecessor, Jean Drapeau, said there is no leader with iron will on the horizon.

“We require a mayor who can strike fear into the hearts of provincial politicians. I don’t see anyone who has the weight to do it, but any new blood will help,” Mr. Gignac said.

Even if there was, there’s no guarantee the new mayor will have his eye on the right priorities, he added.

Mr. Drapeau’s decades in office are a handy lesson. Mr. Drapeau was indeed an imposing character when he began his second term in 1960, but he spent much of his political capital building baubles and trying to make Montreal a player on the international stage. The 1976 Olympics and Expo 67 were on his watch. By the time he left in 1986, the city’s economy and infrastructure were crumbling away.

“By the time Mr. Drapeau’s strategy started falling apart in the 1980s, we had all these sewer lines rotting away beneath all those sparkling [Expo and Olympic] pavilions,” Mr. Gignac said.

If Montreal gets any respite from the corruption spotlight in 2013, it may be because anti-corruption crusaders have broadened their hunt from city hall to other cities and towns and other government spending. The province’s daycare system and the Hydro-Québec and Plan Nord economic development projects are all on the radar. “It’s everywhere in Quebec,” said Robert Lafrenière, head of the anti-corruption squad, in an interview. “We will be looking for new stratagems organized crime is using, including by moving out into other regions, and not just in construction.”

Shared misery makes for scant consolation. But when Mr. Gignac examines the coming years in Montreal, he’s far more optimistic than many city watchers. He said corruption is a cyclical problem of governance in a city where most citizens are getting on with work and taking advantage of the city’s vibrancy.

“For the average citizen, the city is not going so badly. And what problems there are have more to do with economy, infrastructure and transportation,” he said, pointing to major projects to overhaul a freeway and build a new major bridge and new hospitals that are nearly complete.

One of the two major hospital projects, the McGill University Health Centre, is under investigation by the province’s anti-corruption unit. But when complete, the city will still have a shiny new hospital, Mr. Gignac pointed out.

Infrastructure, Mr. Gignac insists, remains a far greater problem in Montreal than corruption. “A series of major public works will take us through 2020, and when we get there we will have an extraordinary city.”

Picture source: Montrealgazetta.com

Caen colombianos involucrados de lavado de dinero en España

EL País Por: Elpais.com.co I EFEJueves, Diciembre 27, 2012 - 8:30 a.m

Los delincuentes tenían una compleja red de locutorios por medio de la cual hacían llegar las ganancias del narcotráfico a Colombia.

La Policía española desmanteló una red de locutorios que contrataban organizaciones de narcotraficantes para hacer llegar a Colombia los beneficios de la venta de drogas en España, método con el que supuestamente llegaron a blanquear más de 30 millones de euros.

Según informó la Policía, en la operación fueron detenidas 49 personas en Madrid, Barcelona y Albacete (centro) , entre ellos el presunto líder del grupo y los responsables de los locutorios.

La organización desarticulada usaba doce locutorios abiertos al público pero sin apenas actividad comercial, con los que podían lavar una media de 50.000 euros diarios.

El origen del caso se remonta a octubre de 2010, cuando se detuvo a 41 personas relacionadas con el blanqueo de más de 200 millones de euros procedentes del narcotráfico.

Investigaciones posteriores revelaron que formaban parte de otro entramado dedicado al blanqueo dirigido por un colombiano.

El jefe de esta organización recibía grandes sumas de dinero de narcotraficantes que operaban en España para enviarlas a Colombia.

Para ello utilizaba una red de locutorios situados en su mayoría en Madrid, que "camuflaban" las operaciones de blanqueo bajo la apariencia de remesas de dinero remitidas por ciudadanos extranjeros residentes en España a sus países de origen.

10 Biggest Banking Scandals Of 2012

Halah Touryalai, Forbes Staff 12/27/2012 @ 11:39PM

Jamie Dimon, chairman of the board, president and CEO of JPMorgan Chase & Co. testifies before a US Senate Banking Committee full committee hearing on 'A Breakdown in Risk Management: What Went Wrong at JPMorgan Chase?'

No year would feel complete without a few high-profile financial scandals.

It’s been just fours years since the financial crisis hit yet there’s been no shortage of bad behavior among the world’s powerful money men and women since then.

Libor Scandal Just Took A Nasty Turn,

Know Your Financial Scandals: Libor, Peregrine And The London Whale

This year’s financial scandals and trouble makers resulted in billions lost and  included a too-big-to-fail bank, a small Iowa-based futures brokerage and a once boring benchmark rate that is suddenly at the center of a massive, global investigation. Criminal charges and prosecutions were few and far between but that’s not anything new for the industry. Many of these scandals ended like many before it-with a monetary settlement.

1.First up is perhaps the biggest financial scandal this year. It stemmed from the nation’s biggest and arguably safest bank, JPMorgan Chase. In May chief executive and Wall Street poster boy Jamie Dimon revealed that his bank had suffered a massive trading loss initially reported to be $2 billion. That $2 billion turned into roughly $5.8 billion loss.

While there was no wrongdoing at hand Dimon did find himself front and center testifying not once but twice before members of Congress. His long-time, trusted CIO Ina Drew lost her job amid the loss as well as a handful of other executives. The trading mess left JPM with billions less but perhaps more significantly put a mark on Dimon’s previously stellar reputation.

2. The Libor manipulation scandal was the year’s most far-reaching, hitting dozens of banks across the U.S. and Europe. This summer Barclays was the first bank to settle allegations that it manipulated the London Interbank Offered Rate–a benchmark rate tied to hundreds of trillions of dollars worth of financial contracts and derivatives.

Robert E Diamond, former Barclays CEO, lost his job after the bank paid $450 million for its role in Libor-rigging.

Barclays paid up $450 million and American CEO Bob Diamond lost his job over the matter after regulators lost their faith in him.

There’s plenty more where that came from as over a dozen other banks are under investigation for their own role in Libor rate-rigging.

3. UBS learned that the hard way last week when it paid a jaw-dropping $1.5 billion to settle Libor allegations. The Swiss bank admitted its wrongdoing and some of its former traders were arrested in Europe as a part of the investigation.

The UBS settlement doesn’t bode well for the remaining banks under investigation. Why? The charges made against UBS show the bank not only manipulated the Libor rate to make itself look healthier to outsiders but also, and perhaps more often, to make money by apparently colluding with other banks. From a regulator’s perspective that’s a lot worse than lying a bit to appear in better condition.

4. The UBS settlement amount was only outdone by the one paid by HSBC just a week prior. The British bank paid a record $1.9 billion to UK and U.S. regulators over money laundering. More specifically, HSBC settled charges that its lax money-laundering policies allowed billions in Mexican drug money and Iranian terrorist money to be transferred into the U.S. financial system.

5. That wasn’t the only money laundering settlement this year. Standard Chartered, a UK bank, paid $327 million to U.S. regulators in December over alleged illegal transactions with Iran, Sudan, Libya, and Burma. The countries are all subject to U.S. sanction and the U.S. Department of Justice and Federal Reserve say Standard Chartered Bank moved millions of dollars between 2001 and 2007 illegally through the U.S. financial system on behalf of Iranian, Sudanese, Libyan and Burmese entities.

Earlier this year in August, Standard Chartered paid $340 million to a New York state regulator over similar allegations. The NY Department of Financial Services said the British bank schemed with the Iranian government for nearly a decade, reaping hundreds of millions of dollars in fees through thousands of secret transactions involving $250 billion.

6. Back at UBS the scandals keep rolling. Late last year UBS disclosed one of its traders had gone rogue and lost the bank over $2 billion as a result. According to documents Kweku Adoboli’s bets exposed the bank to $12 billion in losses even though his unit was only authorized to risk $100 million intra-day and $50 million overnight. He was found guilty on two counts of fraud in November after a 10-week trial.

7. Not all scandals involved billions of dollars. A small futures brokerage firm in Iowa went under after its CEO allegedly engaged in fraud losing over $215 million of client money.

CEO Russell Wasendorf Sr. was indicted by federal prosecutors who say he submitted false information for his U.S. futures and currency brokerage firm. Wasendorf pleaded not guilty even though last month he confessed in a suicide note that he  had been using fake bank statements to embezzle millions of dollars from customers.

8. A larger brokerage firm faced another type of mess. Market-maker Knight Capital Group this summer suffered a $440 million loss after a problem with its trading system resulted in unwanted securities purchases. The loss forced it to be saved by outside investors including TD Ameritrade, Blackstone and Jefferies.

It ended up selling itself to one of its investors, Getco, for $3.75 a share. Knight shares were trading around $10 before the trading screw-up.

9. Insider trading has been a big focus for regulators over the last year. The prosecution of former hedge fund titan Raj Rajaratnam over illicit profits he made on inside information also shined a spotlight on one of his informants. Rajat Gupta, a former Goldman Sachs director, was fined $5 million and jailed for two years for sharing inside information with Rajaratnam. Among the secret information was a $5 billion investment Warren Buffett would make in Goldman Sachs amid the 2008 financial crisis.

10. Prosecutors have been circling billionaire hedge fund manager Steven Cohen and his firm, SAC Capital, for quite some time. In recent weeks it appears they’ve been getting closer in their attempt to take him down.

A former portfolio manager at an affiliate of SAC Capital Advisors was indicted this month for allegedly trading on inside information. Mathew Martoma worked for a unit of SAC and according to documents his inside information was apparently used by Cohen–though he isn’t named in any of the prosecution’s documents.

It won’t be the last we hear of Cohen, SAC and the regulators. After all, 2013 is just around the corner and will require its share of financial scandals.

Anti-money Laundering Compliance

AML Compliance (Anti-money Laundering Compliance, em inglês) caracteriza-se pelo conjunto de processos e políticas desenvolvidos dentro de uma instituição financeira com a finalidade de combater e prevenir a Lavagem de Dinheiro e o Financiamento da Atividade Terrorista, por meio da conformidade com Leis, Normas e Políticas de combate ao crime financeiro.

Bancos, fundos de investimentos, trading, cooperativas de créditos e qualquer instituição de valores mobiliários estão sujeitos à realização desses processos e de se submeter às Políticas de AML Compliance.

Geralmente estas instituições funcionam sob as legislações de cada país e estão subordinadas aos seus respectivos Bancos Centrais, seguindo e aplicando Leis e Normas das FIUs (Finance Intelligence Units) que são as Unidades de Inteligência Financeiras responsáveis pelo monitoramento de atos ilícitos relacionados à lavagem de Dinheiro e Financiamento da Atividade Terrorista.

No Brasil, essa atividade é geralmente conhecida como PLD (Prevenção à Lavagem de Dinheiro) e está submetida ao COAF (Conselho de Controle das Atividades Financeiras), órgão (FIU) responsável pelas Políticas, Normas e Resoluções de combate à Lavagem de Dinheiro. O COAF, órgão do Ministério da Fazenda estrutura-se na forma de um colegiado entre 12 orgãos públicos e autarquias institucionais, Banco Central do Brasil, Ministério da Justiça, Ministério da Previdência Social, Secretária da Receita Federal, CVM (Comissão de Valores Mobiliários), SUSEP (Superintendência de Seguros Privados), Controladoria-Geral da União, Procuradoria-Geral da Fazenda Nacional, ABIN (Agência Brasileira de inteligência) Ministério das Relações Exteriores, Polícia Federal do Brasil e Ministério da Fazenda.

O COAF faz parte da FATF (Financial Action Task Force) ou – GAFI (Grupe d’Action Financière) órgão intergovernamental de combate à Lavagem de Dinheiro e Financiamento da Atividade Terrorista composto por 36 países e responsável pelas FATF Recommendations, documento Padrão Internacional de Prevenção e Combate à Lavagem de Dinheiro e Financiamento da Atividade Terrorista.

Este documento é um conjunto de 40 recomendações que conjugam um Padrão Internacional sob o qual estão submetidas 180 jurisprudências. É a partir dessas recomendações que cada país cria suas jurisprudências de Combate à Lavagem de Dinheiro e Financiamento da Atividade Terrorista.

No Brasil a Lei em voga é a Lei 12.683 de julho 2012 que “Altera a Lei no 9.613, de 3 de março de 1998, para tornar mais eficiente a persecução penal dos crimes de lavagem de dinheiro.”

Em obediência a Lei 12.683, toda instituição financeira como Bancos Comerciais, Bancos de Investimentos, Fundos de investimentos, Corretoras de Valores Mobiliários, Caixas Econômicas, Cooperativa de Créditos, entre outras, devem criar políticas e processos de identificação, prevenção e combate ao crime de Lavagem de Dinheiro e Financiamento da Atividade Terrorista.

Isto significa dizer, monitorar por meio de processos KYC Know Your Customer (Conheça seu Cliente) atividades suspeitas ou a ligação de pessoas físicas ou jurídicas com o crime organizado ou que possam estar colocando dentro do Sistema Financeiro Nacional, dinheiro advindo de atividades ilícitas como Corrupção, Tráfico de Drogas, Evasão de Divisas, Sonegação Fiscal, Suborno, Fraudes ou de qualquer outra infração penal, conforme generaliza o Artigo 1º da Lei 12,683, “Ocultar ou dissimular a natureza, origem, localização, disposição, movimentação ou propriedade de bens, direitos ou valores provenientes, direta ou indiretamente, de infração penal”.

AML Compliance, portanto, significa manter a instituição financeira em conformidade com os Padrões Internacionais, bem como com a jurisprudência local no Combate e Prevenção à Lavagem de Dinheiro e Financiamento da Atividade Terrorista, sob o risco de ser enquadrada judicialmente e penalmente como participe do crime ou facilitador dele.

Lumturo Strigo Compliance Consulting: Growing With Guidance.

Canadian O&G Cos Risk Greater Bribery Exposure with Global Investment

by  Karen Boman Rigzone Staff Wednesday, December 26, 2012

Canadian oil and gas companies face exposure to bribery and corruption as they increase investment in emerging markets that include Brazil, India, Russia and China (BRIC) at a time when they face more stringent enforcement of anti-bribery regulations at home and worldwide.

Canadian oil, gas and extractive companies are facing increased pressure to ensure their operations at home in Canada and abroad from two sources, Toby Duthie, partner and head of global consulting firm Forensic Risk Alliance (FRA) UK, told Rigzone in a recent interview.

One source is the Organization for Economic Cooperation and Development (OECD), which has been critical of Canadian companies for their efforts to stamp out bribery and corruption within their operations. In fact, the OECD gave Canada a "fail" grade in the OECD Phase three report published in March 2011.

The other source is the Royal Canadian Mounted Police – the equivalent of the Department of Justice (DOJ) or the Federal Bureau of investigation in the United States – which is beginning to pursue bribery and corruption cases more aggressively than they have in the past since the OECD Phase three report was released.

The increase in investigations in Canada is being carried out under the Corruption of Foreign Public Officials Act (CFPOA), which became law in 1999. CFPOA was created by Canada in response to the OECD Convention which Canada and other OECD member states signed in 1997 to fight bribery of foreign public officials. Enforcement of the law increased in 2007, after Canada signed the United Nations Convention Against Corruption. The Royal Canadian Mounted Police also formed two special teams to focus on cases ofCanadian companies making illicit payments abroad, The Globe and Mail reported last month.

In 2011, Canadian oil and gas firm Niko Resources pled guilty to bribery charges under Canada's Corruption of Foreign Public Officials Act (CFPOA). The company was fined $9.5 million for bribing a Bangladeshi government official. The investigation into Niko marked the first major prosecution under the CFPOA by the Royal Canadian Mounted Police, The Global and Mail reported.

At the same time, Canadian oil and gas companies also must contend with the U.S.'s Foreign Corrupt Practices Act or the UK's recently enacted Bribery Act. The Swiss and German governments are also stepping up their enforcement of anti-bribery and anti-corruption laws. These efforts are being encouraged by the U.S. DOJ, said Duthie.

The Dodd-Frank Act passed earlier this year in the United States, which requires oil and gas and extractive industry companies to disclose all payments made to governments, also is part of the international initiative to increase transparency in financial dealings as a means of fighting corruption.

The increased investment by Canadian companies into BRIC countries and emerging markets in Southeast Asia and Sub-Sahara Africa, which are home to significant natural resources, also is driving Canadian companies to strengthen their compliance to mitigate the risk of business interruption and reputational damage arising from corruption events, said FRA COO Maggie Deacon in an Oct. 31 presentation in Vancouver, Canada, on anti-corruption for the mining sector.

New technology and oil prices are making projects economically viable in countries that have not traditionally been provinces for oil and gas operations. No oil industry existed in regions such as East Africa a decade ago, but the region's deepwater assets is drawing industry here, Duthie noted. But these opportunities in emerging markets, including BRIC countries, also open up companies to risk.

Fighting corruption in operations overseas can be cumbersome. And in some cases, such as with custom clearance agencies, companies are not bribing customs officials for profit but just as part of the everyday routine of doing business, Duthie said. But companies must address these issues in order to avoid exposure.

Canadian extractive companies that operate in BRIC countries are vulnerable to enforcement due to the higher corruption perception index in the markets in which they operate; exposure to inadvertent infringements of the law through joint venture partners, customs clearance through which bribery and corruption are rife, and use of agents in business dealings, according to the findings of a series of roundtable discussions in Canada on effective risk assessment due diligence and audits for mining companies operating in foreign jurisdictions.

The real cost of a bribery investigation is higher than actual penalties levied, including a drop in stock price and liability associated with class action suits, distraction from core business, loss of investor financing, resource costs and professional fees associated with responding to allegations, and negative publicity that results in a decrease in the company's brand value, according to the findings of recent roundtable discussions.

Additionally, agreements such as bilateral investment Treaties can become null and void as a result of bribery to secure contracts, leaving exposed companies with little recourse in the event that a concession is wrongfully taken away.

Oil majors and service companies, who often carry out projects through joint ventures, are increasingly worried they will be exposed to risk of prosecution due to vendors or joint venture parties, Duthie commented. FRA is seeing challenges for energy-related companies operating in Brazil and other BRIC countries, such as offshore drillers getting their drilling rigs through customers without paying bribes.

Russia offers a very challenging environment in terms of bribery and corruption not only in the public but the private sector, Duthie noted. But there is also a growing sense that if you want to pursue opportunities with multi-national companies, then a company needs to have an anti-bribery and anti-corruption program in place. Corruption also has been an issue in China, but protests by the middle class against corruption within the government have occurred in recent times.

However, Canadian companies are taking a more pro-active approach to addressing bribery issues, including an increased focus on managing third-party relationships through audits, Deacon said. Anti-bribery audits are used as part of a top-down and bottom-up approach in a balanced compliance program. Key business risk areas for corruption include the tendering process for project, vendors, mergers and acquisitions and joint ventures, taxes/customs, regulatory, financial controls and government support.

"From our hands-on experience we can reveal that companies who carry out an anti-bribery audit proactively, rather than in response to an inquiry from a regulatory authority, will win out because they can minimize their exposure to business costs and punitive fines," said Deacon in a statement.
When conducting an anti-bribery audit, companies should look at accounting areas, such as control over funds, payment procurement, accounting records, sales and marketing, cost accounting, receivables management, technology controls, and tendering and contracts, Deacon said.

"We have seen a clear trend that Canadian companies are waking up to the reality of their vulnerability when operating in emerging markets and that extractive sector companies are being proactive in the sense that they are taking action to minimize their exposure to risk now, rather than taking a 'wait and see' approach'," Deacon commented.

According to the OECD's March 2011 Phase three report on Canada's implementation and enforcement of the 1997 Convention – in which the OECD concluded that Canada's legislative and institutional framework remains problematic for enforcing anti-bribery laws -- Canadian mining companies had invested over $60 million in developing countries, including approximately $41 billion in Latin America and Mexico and nearly $15 billion in Africa. In 2008, 1,293 companies, or 75 percent of the world's exploration and mining companies, were headquartered in Canada.

However, Transparency International, in its September 2012 progress report, Exporting Corruption? Country Enforcement of the OECD Anti-Bribery Convention, that Canada has moved up to the moderate enforcement category, a positive change from the organization's 2011 progress report where no countries moved to a higher category. But the organization reported that the overall level of enforcement remains inadequate, with only seven countries having attained Active Enforcement status. This number has not changed since 2009.

"Governments need to integrate anti-corruption actions into all aspects of decision making," according to Transparency International's website. "They must prioritize better rules on lobbying and political financial, make public spending and contracting more transparent, and make public bodies more accountable."

The group noted that corruption destroys lives and communities and undermines companies and institutions. "It generates popular anger that threatens to further destabilize societies and exacerbate violent conflicts," Transparency International noted.

In the United States, measures that require more transparency in money paid to foreign governments for projects have not been well received by some in the oil and gas industry. The American Petroleum Institute filed suit against the U.S. Securities and Exchange Commission over the Dodd-Frank Act, Dow Jones Newswires reported in October. API argued that the measure would hurt the competitiveness of the oil and gas industry overseas.

In Duthie's views, however, legislation such as the Dodd-Frank Act in the United States that are driving transparency as a means of fighting corruption will be the new world order. While Duthie sympathizes with oil and gas companies' argument that too much transparency can hurt their business, the industry would be better off collaborating and lobbying for clarity, noting that it will become harder for those companies and countries who are resisting Dodd-Frank and the Extractive industries Transparency Initiative.

Canada Bank Bonds, China Internet, Ukraine Bank: Compliance

By Carla Main - Dec 26, 2012 3:01 AM GMT-0200

Canadian banks issued a record amount of domestic debt this year as they rushed to get ahead of new rules that will make issuing subordinated bonds costlier as of next month.

Lenders such as Royal Bank of Canada and Canadian Imperial Bank of Commerce sold C$31.6 billion ($31.8 billion) in domestic bonds this year, or 11 percent more than in 2011 and the most in Bloomberg League Tables dating to 1999. So far in December, banks sold C$4.6 billion in bonds, more than double the amount from the same period last year, the data show.

Borrowing accelerated before rule changes take effect that will change the way regulators treat callable subordinated debt, which banks use to build capital provisions. Beginning Jan. 1, Canadian banks will no longer be able to issue subordinated notes as so-called Tier 2 securities, part of a system where lenders classify capital depending on the ability of the bonds to absorb losses.

Next year’s issuance of debt by the country’s eight largest banks will fall as much as 20 percent, said John Aiken, an analyst in Toronto at Barclays Plc. (BARC) Although banks aren’t restricted from issuing subordinated debt, it won’t be as economical for them to do so, he said.

Canada’s banking regulator released final Basel III capital adequacy rules this month that aim to bring the country’s lenders into line with new global standards beginning next year.

For more, click here.

Compliance Policy

Dodd-Frank Swap Rules Delayed Six Months for Overseas Trades

The largest Wall Street banks and foreign-based financial companies won a six-month delay in some swap regulations for overseas trades, even as they must begin registering with U.S. regulators by year-end.

The Commodity Futures Trading Commission, the main U.S. derivatives regulator, voted 4-1 to leave the registration deadline in place while providing a delay until July 12 for capital and other requirements for overseas operations of JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and other banks, the agency said in a statement. The CFTC also reduced the number of overseas offices immediately registering.

The international reach of CFTC swap rules has been one of the most controversial elements of the agency’s Dodd-Frank Act rules, prompting opposition from financial companies. The agency has also faced criticism from European and Asian regulators over the reach of a rule requiring trades to be guaranteed at clearinghouses and traded on exchanges or other platforms.

The CFTC is working with international regulators to determine when overseas rules can be used to substitute compliance with Dodd-Frank measures.

Under the exemption order, foreign-based banks and overseas operations of U.S. banks don’t need to count trades they have with non-U.S. clients to determine whether they cross the threshold requiring registration with the CFTC. The agency also sought additional public comment on how to define U.S. entities and foreign branches of U.S. companies.

Dennis Kelleher, CEO of Better Markets, a Washington-based organization advocating stricter financial regulation, said the delay fails to protect U.S. taxpayers.

China Web Stocks Sink on State Rules as E-House Jumps

Chinese equities fell Dec. 24 in New York, after posting the longest stretch of weekly gains since October, as concern the government will take stricter measures to control the nation’s online access sent Internet stocks lower.

The Standing Committee of the National People’s Congress, China’s lawmaking body, will decide this week on proposed legislation that would require Web users to register their real names to gain Internet access, the Xinhua news agency reported Dec. 23. Sina Corp. (SINA), owner of the Twitter-like Weibo service in China, dropped the most in three weeks andSohu.com Inc. (SOHU) retreated from a six-month high. E-House China Holdings Ltd. (EJ)surged the most in two weeks.

The People’s Daily newspaper, published by the ruling Communist Party, has featured during the past week front-page editorials calling for more regulation of the Web, saying the “chaotic Internet” needs to be controlled.

The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., also declined. The ETF has risen 12 percent this year.

Japan May Expand List of High-Capital Banks, Nikkei Says

Japan may expand its list of banks it requires to maintain high levels of capital, Nikkei reported, without attribution.

Major trust banks, including Sumitomo Mitsui Trust and Norinchukin, would be added to the list of Japanese banks required to maintain the higher levels, according to the Nikkei report. The proposal recommends a capital ratio 0.5 point higher than regular banks for the newly designated banks, to be phased in beginning in 2016.

Mitsubishi UFJ, Mizuho Financial, Sumitomo Mitsui Financial are on the G-20 list of 28 global banks that are to have the 2.5 point surcharge.

Japan’s Financial Services Authority next year will start evaluation of banks to determine the list.

Russia Plans Tax Law for Off-Shore Projects, Vedomosti Says

Russian government ministries approved a draft tax law for companies working on the continental shelf, Vedomosti reported, citing an unidentified government official.

The law may be signed by year-end. The draft law doesn’t contain the amendment proposed by the Natural Resources Ministry that had added a profit tax for offshore projects, the newspaper reported, citing Deputy Minister Denis Khramov. The newspaper said Khramov didn’t elaborate.

The draft included all of the government’s proposed tax incentives, the paper reported, citing Deputy Energy Minister Pavel Fedorov.

Companies will pay a mineral extraction tax at five to thirty percent of the oil price, will be guaranteed a stable tax regime for 15 years, and will get tax benefits, according to draft law.

Compliance Action

SouthGobi Says Mongolia Corruption Probe to Look At Licensing

SouthGobi Resources Ltd. (SGQ) said the Mongolian Independent Authority Against Corruptionis continuing its investigation into historical licensing issues, according to a statement to the Hong Kong stock exchange.

The Authority will investigate divestment of SouthGobi licenses to third parties and the involvement and conduct of government officials. SouthGobi said the authority has concluded its questioning of its chief legal counsel Sarah Armstrong, and she is no longer a suspect.

SEC Puts Off Decision on BlackRck’s Copper ETF to February

The Securities & Exchange Commission, the U.S. regulator, delayed a decision to approve or disapprove BlackRock Inc. (BLK)’s proposed copper exchange-traded fund from Dec. 24 to Feb. 22.

More time is needed to consider comments submitted, the SEC said in a notice dated Dec. 21 on its website. NYSE Arca Inc. had filed on June 19 a request to list the iShares Copper Trust, sponsored by BlackRock Asset Management International Inc., the SEC said.

Melissa Garville, a spokeswoman for BlackRock in New York, declined to comment Dec. 24 on the SEC’s decision.

JPMorgan Chase & Co. won regulatory approval for the first U.S. ETF backed by physical copper, according to an SEC order on its website date Dec. 14. The regulator accepted the proposal amid remarks from some industrial users that the product may disrupt the copper market.

Comings and Goings

Ukraine Central Banker Joins Government Amid IMF Loan Talks

Ukrainian President Viktor Yanukovych promoted central bank chief Serhiy Arbuzov to first deputy premier as the government seeks its third bailout loan from the International Monetary Fund since 2008.

Serhiy Arbuzov, who led Natsionalnyi Bank Ukrainy since December 2010, will be responsible for the country’s finances and economy, as well as trade, social, tax and agricultural policies, Yanukovych said in a decree posted on his website Dec. 24. Ihor Prasolov, who was head of the central bank’s advisory council, was appointed economy minister.

The country’s legislature approved Mykola Azarov’s return as prime minister on Dec. 13, after he resigned earlier in the month due to his election to parliament.

For more, click here.

El-Erian Named by Obama to Lead U.S. Global Development Council

President Barack Obama will appoint Mohamed El-Erian, the chief executive officer of Pacific Investment Management Co., to head the U.S. global development council.

El-Erian, who shares the title of co-chief investment officer of Newport Beach, California-based Pimco with Bill Gross, will be chairman of Obama’s global development council, which was created earlier this year to advise the president on ways to promote economic development and good governance in countries all over the world, according to a Dec. 21 statement from the White House. El-Erian, 54, will head the council as a member of the private sector and his role at Pimco won’t change.

El-Erian coined the “new normal” phrase in 2009, which describes an era of lower returns, heightened government regulation, diminishing U.S. clout in the world economy and a bigger role for developing nations. He is the author of “When Markets Collide,” a 2008 New York Times bestseller, and regularly writes commentaries on topics ranging from the global economy to education.

Congressman McHenry to Lead House Investigations Subcommittee

Congressman Patrick McHenry, a Republican from North Carolina, was chosen to lead the House Oversight and Investigations Subcommittee in the 113th Congress, according to a statement on his website.

The appointment was made by the incoming chairman of the Financial Services Committee, Congressman Jeb Hensarling, a Republican from Texas.

As chairman, McHenry “will provide oversight of the Federal Reserve, Treasury, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Department of Housing and Urban Development, the Federal Housing Finance Agency, and the Export- Import Bank,” according to the statement.

To contact the reporter on this story: Carla Main in New Jersey at cmain2@bloomberg.net.

To contact the editor responsible for this report: Michael Hytha at mhytha@bloomberg.net.

Canada Credit Unions, JPMorgan ‘Whale’ Order: Compliance

By Carla Main - Dec 24, 2012 11:55 AM GMT-0200 Bloomnerg

Canada’s federal government issued new rules on Dec. 21 that give credit unions the option to become federally incorporated entities, allowing them to expand across the country and better compete with banks.

Credit unions, financial institutions owned by their customers and overseen by provincial regulators, have been waiting for the changes first announced in the 2010 federal budget. TheDepartment of Finance released the final rules in a statement on its website.

Credit unions choosing to convert would fall under the oversight of Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, giving them the ability to operate nationally instead of being limited to their home provinces.

David Phillips, chief executive officer of the trade association for the country’s credit unions, said in a statement that the organization welcomed the announcement as a “major milestone.”

Compliance Policy

Banks’ Loan-Loss Reserves Seen Jumping 50% in FASB Proposal

Banks’ loan-loss reserves may jump about 50 percent under a proposed U.S. accounting-rule change that redefines how quickly firms must recognize bad debts, standard-setters said.

The Financial Accounting Standards Board’s proposed rule, revising a February draft, pushes banks to start recognizing losses on loans, debt securities and other financial receivables when firms see early signs of potential loss. The policy would move from an “incurred loss” model to an “expected loss” model, similar to changes under consideration by the International Accounting Standards Board, which sets the rules used in most nations outside the U.S.

FASB’s estimate shows banks probably would need to boost reserves by billions of dollars if the new rule is implemented. JPMorgan Chase & Co. (JPM), the largest U.S. bank by assets, had $24 billion in its allowance for credit losses at the end of September. Charlotte, North Carolina-based Bank of America Corp., ranked No. 2, had $26 billion.

Spokesmen for Bank of America, New York-based JPMorgan and Citigroup Inc., the third-largest U.S. bank, declined to comment.

The FASB draft is open for comment until April 30. Even if the final proposal is adopted next year, it probably won’t take effect before 2015, according to a person with knowledge of the plans, who requested anonymity because the timing wasn’t announced. The effective date was left blank in the Dec. 20 draft.

The accounting board is looking to change how reserves and asset values are measured after the financial crisis forced lenders to devote capital to losses, leaving some of the world’s largest banks struggling to meet regulatory thresholds and remain solvent.

For more, click here.

Banks Told by U.S. Regulator to Share Cyber Attack Information

A U.S. banking regulator told financial institutions to report cyber attacks to law enforcement and alert customers to their impact as new assaults targeted PNC Financial Services Group Inc. (PNC) and other banks.

The Dec. 21 alert from the U.S. Office of the Comptroller of the Currency warned about a wave of so-called distributed denial-of-service attacks. Such actions harness networks of infected computers to pump large volumes of Internet traffic at websites, often causing slowdowns or disruptions.

A group calling itself Izz ad-Din al-Qassam Cyber Fighters announced plans to attack banks in a Dec. 10 statement posted on the website pastebin.com. The comptroller’s office, which didn’t identify targeted banks or the groups responsible for the attacks, said fraudsters can use them to distract bank personnel to disrupt bank operations.

China to Allow Companies to Invest Idle Proceeds, Xinhua Says

China will allow listed companies to invest idle proceeds from fundraising in “safe, good liquidity” investment products, such as government bonds and wealth management products from banks, the official Xinhua News Agency reported, citing China Securities Regulatory Commission.

Companies will be allowed to use raised funds to temporarily bolster working capital for 12 months, compared to 6 months previously, Xinhua reported.

Thirty percent of the raised funds can be used within 12 months to permanently bolster working capital and pay bank loans, up from 20 percent previously, Xinhua reported.

Compliance Action

Rate Scandal Sees U.K. Fines Triple Previous Record in 2012

Penalties against Barclays Plc (BARC) and UBS AG for their roles in the Libor rate-rigging scandal helped the U.K. Financial Services Authority more than triple its previous fines record in 2010 to at least 312 million pounds ($506 million) this year.

The FSA’s penalties would have been even higher, at more than 400 million pounds, without discounts granted in about two- thirds of cases for cooperation with the regulator, London-based law firm Reynolds Porter Chamberlain LLP said in an e-mailed statement.

The FSA fined Barclays around 60 million pounds and UBS 160 million pounds this year for attempting to manipulate the London benchmark interbank interest rate, known as Libor.

Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier.

U.K. Banks Seen Sacrificing Lending for BOE Capital Demand

U.K. banks, under pressure from the Bank of England to increase capital, may do exactly what the central bank doesn’t want them to do: cut lending.

While trimming or delaying dividends, selling assets, reducing pay or raising equity would also bolster capital, banks such as government-owned Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc (LLOY) may be tempted to shrink lending, said Paul Mumford, who helps manage about 350 million pounds ($569 million) including Barclays Plc, RBS and Lloyds shares at Cavendish Asset Management Ltd. in London.

Britain’s four-biggest banks may need as much as 60 billion pounds in extra capital to meet future loan losses, compensate customers and pay regulatory fines, according to the Bank of England’s Financial Stability Report last month. Central bank Governor Mervyn King is pressing banks to raise capital levels without reducing lending to support an economy struggling to avoid a triple-dip recession.

For more, click here.

JPMorgan Said to Face First Enforcement Action on Whale Loss

JPMorgan Chase & Co. will be the target of a regulatory enforcement order stemming from mistakes that led to at least $6.2 billion in trading losses, according to a person briefed on the situation.

The Office of the Comptroller of the Currency is preparing to issue a cease-and-desist order requiring the largest U.S. bank to fix internal risk controls that contributed to its wrong-way bet on credit derivatives, according to the person, who asked not to be named because the discussions aren’t public. Chief Executive Officer Jamie Dimon, 56, said in May that the firm’s strategy was beset by “errors, sloppiness and bad judgment.”

The timing of the enforcement is uncertain, the person said.

Joe Evangelisti, a JPMorgan spokesman, and Bryan Hubbard, an OCC spokesman, declined to comment on any potential enforcement actions, reported earlier in the Wall Street Journal.

The faulty trades within the bank’s chief investment office -- associated with London-based trader Bruno Iksil, widely known as the London Whale -- may eventually cost more than $6.2 billion, Dimon has said.

That investment office within JPMorgan’s national bank suffered from “inadequate risk management, Comptroller of the Currency Thomas Curry said during U.S. Senate testimony in June.

The U.S. Senate Permanent Subcommittee on Investigations is also probing the loss.

SEC Files Suit Against Former New Generation Biofuels Chairman

The U.S. Securities and Exchange Commission filed a civil action against Lee S. Rosen, the former chairman of New Generation Biofuels Holdings Inc. (NGBF), alleging he fraudulently avoided reporting his ownership interest in the company.

Rosen will settle with the SEC without admitting or denying the allegations, according to an agency statement Dec. 21. Rosen will pay a total of $911,484 in fines and will be barred from serving as a company’s officer or director.

The complaint alleges that in addition to receiving $666,000 in direct payments, he ‘‘indirectly benefited’’ from using New Generation shares held in trusts as partial payment for a yacht.

The SEC earlier suspended trading of Columbia, Maryland- based company, citing its lack of public disclosures since the period ending June 30, 2011.

A phone message left for Bryan McPhee, a company spokesman, wasn’t returned. An e-mail sent to him couldn’t be delivered. Previous filings said the company makes biofuels from oils and animal fats.

Courts

Barclays Staff Ask U.K. Court for Anonymity in London Libor Suit

Barclays Plc traders and employees who made submissions to set interest rates applied to a U.K. court asking for anonymity in the U.K.’s first civil lawsuit related to manipulation of the London interbank offered rate.

A hearing is scheduled for Jan. 21 to decide whether the bank’s staff implicated in the suit, filed by Guardian Care Homes Ltd. over a loss-making interest rate swap tied to the benchmark, can remain anonymous, according to court spokeswoman Rachael Collins in London.

Barclays was ordered to give affiliates of Guardian Care the identities of 208 employees named in the bank’s disclosure to regulators over the Libor-rigging allegations.

Kevin Roberts, a lawyer at Morrison & Foerster LLP representing some of the workers, didn’t immediately return a phone call and e-mail seeking comment. Jon Laycock, a Barclays spokesman, declined to comment.

The case is Graiseley Properties Ltd. & Ors. v. Barclays Bank Plc, High Court of Justice, Queen’s Bench Division Commercial Court, No. 12-1259.

Mathew Martoma Indicted for $276 Million Insider Trade

Mathew Martoma, the former SAC Capital Advisors LP portfolio manager accused in what prosecutors have called the biggest insider-trading case, was charged in an indictment with making $276 million for the firm on inside tips about a clinical drug trial, a sign that he may not be considering a plea deal.

The insider-trading indictment sets in motion a criminal trial process that puts new pressure on him to cooperate with the government’s investigation of the hedge-fund firm founded by billionaire Steven A. Cohen.

At issue in the Martoma case is a 20-minute phone call prosecutors said he had with Cohen after allegedly receiving negative test results about a drug that was intended for use by Alzheimer’s patients. The day after the call, SAC liquidated a $700 million position in Elan Corp. (ELN) and Wyeth LLC, the companies that were promoting the drug.

The government claims SAC netted $276 million in profits and averted losses in the Elan and Wyeth trades. Cohen isn’t alleged in Martoma’s indictment to have known Martoma had inside information. Prosecutors have made no claims about precisely what was said on the call.

Jonathan Gasthalter, a spokesman for Stamford, Connecticut- based SAC, declined to comment on the indictment. Gasthalter has said Cohen and SAC acted appropriately in making the trades. Cohen hasn’t been charged criminally or sued by regulators in the case.

Martoma was arrested at his Boca Raton, Florida, home on Nov. 20 and charged in a criminal complaint. The indictment charges him with one count of conspiracy and two counts of securities fraud. If convicted, Martoma faces as many as 20 years in prison on the securities fraud charges and five years on the conspiracy charge.

‘‘Though disappointing, today’s events come as no surprise,” Martoma’s lawyer, Charles Stillman, said in a statement Dec. 21. “The simple fact is that Mathew Martoma did not trade on inside information, is innocent of all these charges and we look forward to his ultimate vindication.”

The case is U.S. v. Martoma, 12-cr-00973, U.S. District Court, Southern District of New York (Manhattan).

Ex-Anglo Irish Chairman Fitzpatrick Charged for Hiding His Loans

Former Anglo Irish Bank Corp. Chairman Sean Fitzpatrick was charged with hiding personal loans of as much as 139.8 million euros ($184.5 million) from the auditors of the now-nationalized bank.

Fitzpatrick, 64, appeared in court in Dublin Dec. 21 after being charged with breaches of Irish company law for providing “misleading, false or deceptive” declarations to company auditors, according to court documents filed by prosecutors.

Earlier, Fitzpatrick and two other one-time Anglo Irish directors were ordered on Oct. 8 to stand trial in relation to loans to 16 clients to buy shares in the bank in 2008. He said at the time that while the transactions “were inappropriate and unacceptable from a transparency point of view,” they did not breach banking or legal regulations.

Fitzpatrick was remanded on bail until March 1, when the so-called book of evidence will be presented to the court. His solicitor Michael Staines didn’t immediately return calls to his office seeking comment on the charges.

Interviews

Themis’s Saluzzi Says NYSE, ICE Deal Good for ‘Players’

Joseph Saluzzi, co-head of equity trading at Themis Trading LLC, saidIntercontinentalExchange Inc. (ICE)’s plan to buy NYSE Euronext (NYX) will be “good for the players involved.” Saluzzi spoke with Bloomberg’s Pimm Fox and Vonnie Quinn on Bloomberg Radio’s “Taking Stock.”

For the video, click here.

Comings and Goings

Stone Resigns From Accounting Oversight Board After SEC Claims

Mary Stone resigned from the Financial Accounting Foundation’s board of trustees less than two weeks after she was accused by the Securities and Exchange Commission of violating her responsibilities in overseeing Morgan Keegan & Co. mutual funds during the credit crisis.

The FAF, which oversees the board that sets U.S. accounting standards, expects to fill Stone’s spot next year, according to a press release from the Norwalk, Connecticut-based organization. Stone, an accounting professor at the University of Alabama in Tuscaloosa, took a leave of absence on Dec. 10, the day the SEC announced its claims against her and seven other former directors of the funds.

The SEC accused the mutual funds’ directors of allowing assets backed by subprime mortgages to be overvalued as the housing market collapsed in 2007. The action followed a related $200 million settlement with Morgan Keegan, a subsidiary of Raymond James Financial Inc. (RJF), last year and sanctions against two employees in 2010.

Stone and five other directors acted “diligently and in good faith” and intend to contest the SEC’s allegations, which they “emphatically deny,” their attorney, Stephen Crimmins of K&L Gates in Washington, said in a Dec. 10 statement. Stone didn’t return a call for comment Dec. 21.

Beswick Appointed SEC Chief Accountant by Agency’s New Chairman

Paul A. Beswick, who has served as the U.S. Securities and Exchange Commission acting chief accountant for the past several months, was named to the position of chief accountant at the agency Dec. 21 by SEC Chairman Elisse Walter.

The appointment of Beswick was announced in a statement.