Whistleblower News: $2.5 Billion Bribe Fine Global Record, Singapore to Ban Former Goldman Banker, Abu Dhabi SWF gets entangled in 1MDB scandal, Pimco to pay $20 mln over misleading investors

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Petrobras ‘Carwash’ Probe Said to Bring $2.5 Billion Bribe Fine

Penalty payments to U.S. and Brazil would set a global record

Odebrecht, Braskem to sign settlements over Petrobras payments

U.S. and Brazilian authorities are set to impose $2.5 billion in foreign-corruption penalties on Odebrecht SA, Latin America’s biggest construction company, and an affiliate for violating anti-bribery laws, people familiar with the discussions said.

Prosecutors say Odebrecht and the affiliate, Braskem SA, paid officials at Petroleo Brasileiro SA, the state-run oil producer known as Petrobras, to win contracts. Odebrecht and Braskem will plead guilty to charges involving the U.S. Foreign Corrupt Practices Act, three people said. A Swiss investigation of Odebrecht is also part of the settlement.

“Odebrecht recognizes it participated in inappropriate practices,” the company said in a written statement on Thursday after a Bloomberg News report that more than 60 company executives were signing plea agreements in the case. “It was a grave mistake, a violation of our principles, an aggression to values of honesty and ethics. We won’t allow it to happen again.” read more »

Singapore to Ban Former Goldman Banker in Connection With 1MDB Scandal

Executive allegedly wrote unauthorized reference letter for Malaysian U.S. authorities say is at the center of fraud at state investment fund

Singapore’s probe into a multibillion-dollar financial scandal touched Goldman Sachs Group Inc. for the first time on Friday as its central bank said it was planning to ban the Wall Street firm’s former top executive in Southeast Asia from operating in the city-state’s financial system for 10 years.

The executive, Tim Leissner, was Goldman’s point man on deals involving Malaysian state investment fund 1Malaysia Development Bhd., or 1MDB. The Monetary Authority of Singapore, the central bank, announced the proposed ban on Mr. Leissner after it found he had written a recommendation letter for a Malaysian financier, Jho Low, in June 2015. In it, Mr. Leissner claimed that Goldman had performed due diligence on Mr. Low.

“These statements were untrue and were made by Mr. Leissner without Goldman Sachs’ knowledge or consent,” the MAS statement said. read more »

Abu Dhabi SWF gets entangled in 1MDB scandal

A futuristic 35-story tower where doors swoosh open with the wave of a hand houses a little-known firm long used by this emirate to deploy its oil riches around the world.

When Barclays needed to raise capital in 2008, the Abu Dhabi sovereign wealth fund, known as IPIC, invested more than $5 billion in the UK bank. Through a subsidiary, IPIC acquired holdings in German auto maker Daimler and Swiss commodities powerhouse Glencore. It helped finance the ultraluxury New York skyscraper One57, nicknamed the Billionaire Building.

Driving IPIC was Khadem Al Qubaisi, a nightclub aficionado with slicked-back hair, a taste for the good life and close ties to princes who rule the emirate.

In June, Abu Dhabi’s crown prince abruptly ordered an end to the 32-year-old sovereign wealth fund’s existence as a standalone firm, saying it would be merged with another state entity.

Al Qubaisi? He now sits in an Abu Dhabi jail, fired and under investigation for money laundering, corruption and other possible offenses, according to people familiar with his situation. read more »

Pimco to pay $20 mln over misleading investors about ETF performance

Pacific Management Investment Co (Pimco) will pay $20 million to settle charges it misled investors about the performance of a top exchange-traded fund it manages, U.S. regulators said on Thursday.

The Securities and Exchange Commission's settlement with Pimco, a unit of German insurer Allianz SE, came more than two years after bond manager Bill Gross, who managed PIMCO Total Return Exchange-Traded Fund , left the company for smaller rival Janus Capital Group Inc.

The SEC said Pimco overstated the ETF's value and provided "misleading" reasons for the fund's early success, which was premised on buying small pieces or "odd lots" of mortgaged-backed securities that sell at a discount to larger units. read more »

United Settles Charges in Case of Flight Route to Benefit Public Official

The Securities and Exchange Commission today announced that the parent company of United Airlines has agreed to pay $2.4 million to settle charges in a case where shareholders wound up footing the bill so a public official could get more convenient flights.

According to the SEC’s order instituted today, United reinstated a nonstop flight between Newark, N.J., and Columbia, S.C., at the behest of David Samson, the then-chairman of the Port Authority of New York and New Jersey who sought a more direct route to his home in South Carolina. The route previously experienced poor financial performance and was canceled by Continental Airlines prior to its merger with United, and a preliminary financial analysis conducted after Samson began privately advocating for the route’s return revealed it would likely lose money again.

Nevertheless, the SEC’s order finds that United officials feared Samson’s influence could jeopardize United’s business interests before the Port Authority, including the approval of a hangar project to help the airline at Newark’s airport. The company ultimately decided to initiate the route despite the poor financial projections. The same day that United’s then-CEO approved initiation of the route, the Port Authority’s board approved the lease agreement related to the hangar project. United employees were told “no proactive communications” about the new route read more »

Goldman Gets Fed Slapdown on Ultimate Fighting Loan

Regulators have expressed concern over cash-flow adjustments

Central bank is clamping down on risky lending practices

Federal Reserve regulators reprimanded Goldman Sachs Group Inc. a second time for flouting lending guidelines in a risky debt deal it arranged for the $4 billion buyout of Ultimate Fighting Championship.

The rebuke came after the bank appealed an earlier risk warning from the regulators, according to people with knowledge of the matter who asked not to be identified as it is private. The regulator now considers it a substandard loan, the people said. That’s a lower rating than the Fed’s prior classification of the deal as a so-called special mention, which was based on its concerns over accounting adjustments that inflated cash flow projections for the mixed martial arts promoter. read more »