Corporate ethics

Is Walmart Too Big, Powerful, Influential to Obey the Law?

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Richard Trumka – April 26, 2012

This week's reports from the New York Times about Walmart's practices in Mexico are breathtaking. The Times found "credible evidence that bribery played a persistent and significant role in Walmart's rapid growth in Mexico."

40% consider corruption widespread in Canadian businesses

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Mitchell Ogisi – May 10, 2012

About two in three adults worldwide believe corruption is widespread in the businesses in their countries. This belief is relatively commonplace everywhere in the world -- ranging from 60% in the U.S.A.  to a high of 76% in sub-Saharan Africa -- but it tends to be higher in lower income regions.

Gallup's data, collected in 2011, demonstrate that corruption in business is an issue for developed and developing countries. However, developing nations may suffer more because corruption can stymie financial development and foreign investments and foster income inequality.

Vast Mexico Bribery Case Hushed Up by Wal-Mart

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David Barstow – April 21, 2012

In September 2005, a senior Wal-Mart lawyer received an alarming e-mail from a former executive at the company’s largest foreign subsidiary, Wal-Mart de Mexico.

In the e-mail and follow-up conversations, the former executive described how Wal-Mart de Mexico had orchestrated a campaign of bribery to win market dominance. In its rush to build stores, he said, the company had paid bribes to obtain permits in virtually every corner of the country.

Financial industry employees reluctant to blow the whistle

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Alexander Eichler – April 13, 2012

How come there aren't more whistleblowers? It's a vexing question for anyone who'd like to see corporate crime reduced. Just this week, CNN noted that half of all misconduct at financial companies never gets reported, according to a study conducted by the Corporate Executive Board, a Virginia consulting firm.

But another recent story, this one in The New York Times, provides a painful illustration of why potential whistleblowers may not be that interested in speaking up. Not every whistleblower has an experience like Lynn Szymoniak, the mortgage-fraud tipster who got an $18 million settlement for her troubles. Often things can go a lot worse -- like they have for Jack Palmer.

BP Covered Up Blow-out Two Years Prior to Deadly Gulf Spill

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Deepwater Horizon

Greg Palast – April 19, 2012

Two years before the Deepwater Horizon blow-out in the Gulf of Mexico, another BP off-shore rig suffered a nearly identical blow-out, but BP concealed the first one from the U.S. regulators and Congress.

This week, EcoWatch.org located an eyewitness with devastating new information about the Caspian Sea oil-rig blow-out which BP had concealed from government and the industry.

What will it take for finance workers to report wrongdoing?

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Gary M. Stern – April 11, 2012

Half of all observed misconduct goes unreported, and a majority of managers said they'd only divulge information to a senior executive if the impact of the case exceeded $1 million, according to a recent study.

Turning a blind eye to the wrongdoing of colleagues has become the norm at many financial services firms. Despite the MF Global debacle, the rogue traders at UBS and Societe Generale, the subprime mortgage mess, and Goldman Sachs' tarnished reputation, most corporate employees continue to withhold information about misconduct by colleagues on issues they know are wrong, until it turns into a major financial imbroglio, according to a recent study.

Financial Advisers Flunk Undercover Sting

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A new study finds advisers often put client interests second to their own.

Ryan Sager – April 2, 2012

By now, you may have realized that you aren't always the most rational manager of your money. Chasing returns. Buying into bubbles. Selling into troughs. Keeping too much in cash or company stock. Heck, even if you keep a textbook, well-diversified portfolio of low-fee index funds, you've still probably felt tempted over the last month or so to buy Apple at $600. (You may turn out to be right in retrospect; that won't make it rational.)

To keep yourself in check, perhaps you've turned to a financial adviser. The majority of retail investors have. If so, a new study posted this month by the National Bureau of Economic Research has some bad news for you: Financial advisers not only fail to curb investors' worst habits, they actually tend to reinforce them -- especially when those habits generate fees for the advisers.

World Bank investigates Canada's SNC-Lavalin

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April 3, 2012

The World Bank has temporarily barred a unit of Canadian engineering and construction giant SNC-Lavalin from bidding on new projects following a corruption investigation into the Padma bridge project in Bangladesh.

In April 2011, the WB agreed to lend Bangladesh $1.2 billion to build a 6-km bridge over the river Padma to link Dhaka, and the country's main port.

BP Whistleblower Says Gulf Atlantis Facility Remains Unsafe

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Laurel Brubaker Calkins & Margaret Cronin Fisk - March 16, 2012

BP Plc’s Atlantis facility remains unsafe, according to a whistle-blower who said in a court filing that the company’s second-largest oil producer in the Gulf of Mexico is operating under permits BP obtained by lying to regulators.

“Immediate court action is needed to remedy unsafe conditions on Atlantis,” Mikal Watts, an attorney for former BP contractor Kenneth Abbott, said in papers filed yesterday seeking a trial date in federal court in Houston, where the case has been pending since 2009.

SNC-Lavalin CEO resigns as mystery payments probed

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Nicole Mordant and Euan Rocha – March 26, 2012

The head of SNC-Lavalin, one of the world's biggest engineering and construction companies, has stepped down after an internal investigation found he had broken company rules by authorizing $56 million in mysterious payments.

But based on the findings of the investigation, Montreal-based SNC said it did not believe the payments were related to Libya, where the company has worked on several projects, including building a prison for the now-deposed regime of Libyan dictator Muammar Gaddafi. The company was the subject of unflattering media attention in recent weeks over ties between a senior company executive and Gaddafi's family.

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