U.S. Government’s FCPA Probe of Weatherford Expands
The federal government’s probe into Weatherford International Ltd’s dealings in foreign countries has burgeoned far beyond a simple bribe inquiry by the Securities and Exchange Commission. It is now a multi-agency civil and criminal investigation into allegations that Weatherford did business with terrorist-friendly countries that are under U.S. trade sanctions.
Weatherford is one of the world’s largest oilfield service companies, operating in over 100 countries.
In an unusual twist to the tale last year, Weatherford general counsel Burt Martin left his job in mid-probe, and the company decided to move its headquarters from Houston to Geneva, Switzerland. It still has U.S. operations in Houston.
The company conceded in its 10-Q financial report to the SEC on May 3 that the federal inquiry that began in 2006 has now grown to include the Department of Justice, the Department of Commerce’s Bureau of Industry & Security, and the U.S. Treasury’s Office of Foreign Assets Control. The latter two agencies handle matters of national security.
The report said the feds are looking at allegations on three fronts. They include Weatherford’s participation in the scandal-plagued Oil-for-Food program, the possible misuse of $175,000 at a European subsidiary for alleged bribes in violation of the Foreign Corrupt Practices Act, and the sales of services and products “in certain sanctioned countries.”
It specifically cited Cuba, Iran, Sudan, and Syria — four countries under U.S. sanctions due to their support of terrorism and/or violations of human rights.
The company said it is cooperating with the multi-faceted probe. The report said it has incurred $53 million in costs related to its exit from sanctioned countries and incurred $108 million for legal and professional fees in connection with the ongoing investigations.
Delisting Watch: Daimler the Latest to “Go Dark” in U.S.
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Daimler’s delisting is the latest sign of German companies abandoning U.S. capital markets, opting instead to list solely in Frankfurt, re-fortified. The planned delisting and deregistration of Daimler AG is the latest in this months-long trend, propelled by the growth of Frankfurt and its Xetra electronic exchange, despite a weakening euro. It is also residual of Daimler’s bitter end in the Chrysler saga.
The carmaker announced its intention to “go dark” in a letter to the New York Stock Exchange, detailing its plans to delist its shares and to deregister with the SEC. As cited in a statement by Daimler, the primary reason for the planned listing is “a significant change in the behavior of international investors, who now primarily trade in Daimler shares in Germany and through electronic trading platforms.” Of note, however, Daimler, in its recent annual report, reported consistently low trading volumes in the United States, which amounted to well below 5% of the worldwide trading volume.
via Delisting Watch: Daimler the Latest to “Go Dark” in U.S..
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Inspector General Report: Investigation of the SEC’s Response to Concerns Regarding Robert Allen Stanford’s Alleged Ponzi Scheme
REPORT OF INVESTIGATION
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
OFFICE OF INSPECTOR GENERAL
Case No. OIG-526
Investigation of the SEC’s Response to Concerns
Regarding Robert Allen Stanford’s Alleged Ponzi Scheme
March 31, 2010
Civil Complaint for Investment Fraud | Securities and Exchange Commission v Goldman, Sachs & Co. | Justia.com – JDSupra
The Securities and Exchange Commission is suing Goldman, Sachs for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.
Investors are alleged to have lost more than $1 billion.
The SEC’s complaint charges Goldman Sachs and Goldman Sachs Vice President Fabrice Tourre with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.
Alcatel-Lucent signs deal with U.S. on bribery case | Reuters
Telecoms equipment gear maker Alcatel-Lucent set aside 93 million euros ($125.5 million) last quarter to settle a U.S. bribery investigation that began six years ago.
The Franco-American group said that it had reached agreements with the U.S. Department of Justice and the Securities and Exchange Committee under which it would pay fines, be put on a three-year probationary period, and be subject to a French anti-corruption monitor.
In exchange, the Department of Justice would defer prosecution of the company over charges that it violated the Foreign Corrupt Practices Act's anti-bribery provisions.
The accord must be approved by U.S. courts in order to take effect, according to a February 11 regulatory filing from Alcatel-Lucent.
“If finalized, the agreements would relate to alleged violations of the FCPA involving several countries, including Costa Rica, Taiwan, and Kenya,” said the company in the filing.
The investigation centered on an Alcatel executive Christian Sapsizian who pleaded guilty in 2007 to arranging for bribes to be paid to Costa Rican officials to obtain mobile contracts.
via Alcatel-Lucent signs deal with U.S. on bribery case | Reuters.
Exchange Server Archiving for E-Discovery
A recent survey sponsored by Metalogix Software indicates that fully half of respondents have received a legal discovery request within the past five years. If presented with such a request, will your IT department be able to find and provide all the requested information in a timely manner?
You can help yourself out by being prepared. Have well-documented retention policies in place for email and other company documents: Don’t keep what you don’t need to keep, according to whichever regulations apply to your organization. And for what you must keep, for either legal or business reasons, it’s a great idea to have a proper archive in place—one that can be effectively searched when an e-discovery request comes through. This buyer’s guide and the product table should help you assess the features you need in an archiving product for your Microsoft Exchange Server environment to be ready for e-discovery requests. Although there are many cloud-based services for archiving, this guide focuses only on software products.
PSTs and Other Problems
Exchange Server 2010 has introduced the personal archive feature, which is basically intended to replace PST files. It lets users decide what to archive versus what to delete. But for most legal purposes, this sort of archiving clearly won’t be sufficient, as pointed out by Frank Mitchell, the product director for Metalogix Software. “People abuse email. People delete things, lose email. People create PSTs, which to us is underground archiving,” Mitchell said. In other words, do you really trust your end users when legal issues are on the line?
Having some way of corralling PST data is essential because those files, too, are most likely subject to any e-discovery request—although they aren’t readily searchable or even discoverable through Exchange itself. Most Exchange archiving products these days, including all of the products in the accompanying product table, have some sort of PST migration or management features that can get PST data into the archive. As Mitchell said, “We’re trying to unwind that process by trying to get that data back and preserved and protected.” When the PST data is part of the archive, it’s searchable just like the rest of the archive data.
In addition to the PST problem, the archive might help with other potential problems. For instance, the reporting features of some archives are available with compliance-specific templates for things such as HIPAA and SOX. If they don’t have pre-made templates, the product might give you the ability to create your own custom reports, but keep in mind that means more work on your end.
The ability to establish legal holds on specific archive data is a feature that’s become standard. However, if you’re likely to be the target of many discovery requests, you’ll want advanced hold capabilities, such as the ability to create multiple, overlapping holds. In the interest of not holding things beyond the legal requirement, you can also find archives that let you expire data from the archive according to policies you configure.
eZOOM – a focus on Microsoft Outlook PST files
Email has become the focal point of most electronic discovery and disclosure projects as it has become the primary method of communication in the business world. Additionally, it has been estimated that Microsoft’s Exchange Server has 70% of the commercial email market.
The OST and PST files created by Exchange Server – and the Microsoft Outlook desktop software typically used to access them – can present challenges with the analysis of email data. One PST file will often contain thousands of emails and attachments along with vital metadata such as sender, recipient, date/time sent and subject. Typically, industry practice has been to process PST files through an e-discovery processing tool and load the resulting files and metadata data on to a hosted review platform for analysis. This process can be cumbersome not only in cost, but in time as well.
- PST indexing, analysis & reporting
- PST content analysis
- Email traffic reporting
- Sender/recipient analysis
- PST to file (MHT, MSG, EML), spreadsheet and database (Access, SQL Server, mySQL) conversion
- PST email filtering
- Custodian network analysis, reporting and visualization
- Email categorization and grouping
- Full text, metadata and attachment extraction
- Onsite review and tagging
Further information on eZOOM℠ Data Analytics is available at
The New Exchange 2010 Dumpster
In my previous blog I exposed the naked truth about Exchange deleted items and how easy it is to destroy potential email records.
Microsoft must have listened because the new version Exchange 2010 includes substantial improvements to the “dumpster” and deleted item behavior and closed the potential “leak” for eDiscovery.
The new Exchange 2010 dumpster is a complete new design. Here is a link if you want the complete story.
http://msexchangeteam.com/archive/2009/09/25/452632.aspx
The new Exchange 2010 dumpster features that are key for legal discovery are:
- The new dumpster now includes all deleted items from the mailbox including email, calendars, contacts, and more. The old dumpster only included email.
- The new dumpster is indexed so it can be searched using the new multi-mailbox search tool in Exchange 2010. The old dumpster was not indexed and could not be searched.
- The new dumpster has been extended with new Purges and Versions folders. Users can no longer bypass the dumpster behavior with a manual purge.
The Purges folder keeps items that users purge from the dumpster and keeps them for the length of the dumpster retention period.
The Versions folders keeps a copy-on-write snapshot of email that users modify.
The new Exchange 2010 dumpster still operates with a retention period (14 day default) or custom. The new dumpster features are a welcome addition to Exchange.
By capturing all deleted items and by preventing users from purging email, it closes all of the major “leaks” for email discovery and compliance.
via The New Exchange 2010 Dumpster | Email Archiving & Storage Management Experts.
Microsoft Adds E-mail Archiving to Exchange 2010
Microsoft (NASDAQ: MSFT) announced general availability of Exchange Server 2010 this week, and the messaging platform comes with new data storage and protection features.
E-mail archiving, e-discovery, regulatory compliance and security figure prominently in the new release, with features such as a Personal Archive, retention policies, legal hold, single-item restore, multi-mailbox search and access control.
Personal Archive is a special mailbox that appears alongside the primary mailbox folders in Outlook or Outlook Web App, so users have direct access to e-mail within the archive.
Exchange 2010 also offers new database availability, replication and failover capabilities for stronger disaster recovery, and storage I/O reductions and SATA and JBOD support reduce data storage costs.
Storage vendors such as EMC (NYSE: EMC), Dell (NASDAQ: DELL), Mimosa, Symantec (NASDAQ: SYMC), NetApp (NASDAQ: NTAP), Seagate/i365 (NASDAQ: STX), Azaleos and NeverFail have pledged support for Exchange 2010.
Despite the new storage capabilities, Enterprise Strategy Group analyst Brian Babineau said the new release still leaves plenty of room for storage vendors.
“We believe that the latest version of Exchange, including its archiving and retention capabilities, actually drives the need for purpose-built archive solutions,” Babineau said. “It is readily apparent that Microsoft wants Exchange 2010 customers to manage everything — storage, data protection, retention, discovery, etc. — inside of Exchange. However, this can get very complicated when a company goes through a significant amount of discovery requests, has several large mailboxes, and a multitude of retention policies that must be enforced.
via Microsoft Adds E-mail Archiving to Exchange 2010 – www.enterprisestorageforum.com.
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