NEW YORK( Reuters) – The U.S. Securities and Exchange Commission will review the leaked “Panama Papers” uncovering holders of thousands of hidden bank account for possible violations of anti-bribery statute, said the head of the agency's unit that fights foreign corruption.
“Yes, we will be looking at it, as we do all public sources” that flag potential corruption-linked financial activity, told Kara Novaco Brockmeyer, chief of the SEC's Foreign Corrupt Practices Act( FCPA) unit in answer to a question at an industry conference on Wednesday. The conference was sponsored by the Securities Industry and Financial Markets Association.
The SEC official did not elaborate on what the agency was reviewing in the leaked documents of Panamanian statute firm Mossak Fonseca. The firm specializes in setting up offshore companies, often used to shelter the finances of political leaders and public figures around the world.
Global scrutiny into offshore accounts detailed among the millions of leaked documents implicated scores of political leaders and business figures internationally, though it has had limited fallout in the United States to date.
HIDDEN MONEY: CORRUPTION RED FLAG
Industry officials and regulators at the conference on anti-money laundering and financial crime used to say laundered fund is a red flag that points to a wide range of illegal practices, the most obvious being narcotics and terrorism network financing.
It also plays a lesser-known but critical role in many cases of bribery and corruption involving officials and corporations subject to SEC oversight under the FCPA.
“There will be much for the SEC to review” in the massive leak of data on clients of the Panamanian statute firm, told Ratan Narnolia, senior administrator of Crowe Horwath's anti-money laundering conformity consulting practice.
Mossak Fonseca has said it was the victim of a computer hack, and that it has consistently acted appropriately.
The case already claimed one head of state, Iceland's Prime Minister Sigmundur David Gunnlaugsson, who stepped down after his wife's secret offshore holdings were disclosed.
“The first thing the SEC will probably be doing is looking at names of U.S. corporations of individuals in the files. They need to cover their own danger, ” Narnolia told. “They can't go after everything. There are many countries seeming and they will have their own investigations. The SEC needs to set a demarcation so they can focus on the top priority — any involvement of U.S. organizations or U.S. citizens.”
The agency will also likely choose which suits to pursue based on the amount of money that has been hidden in accounts, since its main concern is publicly traded international companies involved in corruption. The SEC also polices a large number of multinationals with U.S. operations, though it will likely stand aside to let country examiners take the lead with companies domiciled outside the U.S ., anti-money laundering conformity experts said.
( Reporting by Richard Satran for Thomson Reuters Regulatory Intelligence; Editing by Randall Mikkelsen and Andrew Hay)
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