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FCPA Compliance Report

Tom Fox has practiced law in Houston for 30 years and now brings you the FCPA Compliance and Ethics Report. Learn the latest in anti-corruption and anti-bribery compliance and international transaction issues, as well as business solutions to compliance problems.
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Now displaying: Category: Compliance Commentary
Aug 18, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a very deep dive the implications from President Trump’s tweet on Friday, August 17th about quarterly financial reporting by public companies.

Some of the highlights from this podcast are:

  1. What was the reason behind the tweet?
  2. Is this simply an attempt to require less transparency in financial reporting?
  3. Would a longer financial reporting cycle allow companies to plan to the longer term?
  4. Would this negatively impact short-sellers?

We unpack of all these points and consider the SEC’s response going forward.

For more reading: see Wall Street Journal Article, “The End of Quarterly Reporting? Not Much to Cheer About”.

See NYT Dealbook article, “Trump Asks S.E.C. to Study Quarterly Earnings Requirements for Public Firms”.

Aug 17, 2018

Jay is on an Alaskan Disney cruise with the family. Through the prism of Trump’s attacks on the US free press and their robust response, Tom takes a solo look at some of the top compliance stories from the past week. Jay returns next week.

  1. What is the role of a free press in the fight against bribery and corruption? I explore in an article for Compliance Week (Sub req’d)
  2. In his final column at the Wall Street Journal, Ben DiPietro, writes about how social activism prioritizes push for integrity, inclusion. In the WSJ Risk and Compliance Journal.
  3. Where is the Tesla board of directors? The SEC has issued a subpoena to them. Tom discusses in the FCPA Compliance Blog. Emily Glazer reports in the WSJ. More on the infamous ‘funding secured’ tweet on Compliance Week. (Sub req’d)
  4. Why is it stupid to become to the US to (1) demand and (2) accept a bribe? Sam Rubenfeld expains in the WSJ Risk and Compliance Journal.
  5. Is the UK pushing back on US jurisdictional outreach? Evan Norris and Alma M. Mozetic pose this question in NYU’s Compliance and Enforcement blog.
  6. Valerie Charles says to consider the new FCPA Corporate Enforcement Policy from the compliance program perspective. In this month’s SCCE Magazine.
  7. Would a no-deal Brexit be a disaster for compliance? Paul Hodgson reports in Compliance Week. (sub req’d)
  8. Maurice Gilbert interviews Moore & Van Allen’s Valecia McDowell on compliance, leadership and promotion to the firm’s management committee. On CCI’s, Connected.
  9. The scandal at Maryland around the death of Jordan McNair deepens. The Trainer resigns, the University accepts responsibility and his parents call for the firing of the head coach. See coverage in Sports Illustratedand ESPN.
  10. The number of podcasts on the Compliance Podcasting Network has now reached the 1000 podcast milestone next week. To celebrate, running each week in August I am running a week-long special series as a tribute. This week it has been a series on the the future of audit, compliance and analytics. Next week it will be a series on ethical culture, what it means, how to measure and assess it and how to drive it. You can download the entire series next Monday at noon, on iTunes. The series will post daily at 10 AM on the Compliance Podcast Network.
Aug 16, 2018

To celebrate the Month of 1000 podcasts I am running for each of my podcasts this month, in this episode, the Everything Compliance gang focuses on the past five years; giving a retrospective of where we were, where we are and where we are going from their own perspectives. After the commentary we follow with rants and shout outs.

  1. Matt Kelly considers how did the 2013 Internal Controls Framework and the 2016 ERM Framework change things (or not)? He notes the two Frameworks provided widely distributed information to consider compliance in a disciplined way. Matt rants on Elon Musk. 
  1. Mike Volkov explores FCPA enforcement over the past 5 years. He lists the top 3 developments: (1) the long road to the FCPA Corporate Enforcement Policy; (2) The Yates Memo and individual prosecutions and (3) The global framework, built by the DOJ and SEC for anti-corruption investigation and enforcement. Mike rants on disgraced Representative Chris Collins.
  1. Jonathan Armstrong focuses on the evolution of data privacy. Numerous actors, including legislatures, regulators, individuals and pressure groups have all influenced EU/UK policy in this area. Further as US companies have become larger and larger, EU/UK Fair Trade/anti-trust and privacy laws will be used to greater effect on these entities. Armstrong shouts out to compliance when walking one’s bovine in Norwich City.
  1. Jay Rosen considers changes in compliance from the vendor perspective. He notes that many vendors brought a business process approach to not only how law firms and investigative firms worked but also how companies approached compliance programs. Jay rants on the NFL owners attempting to stop players from exercising free speech.
  1. Tom throws in a shout out for retiring Wall Street Journal reporter Ben DiPietro, who retires from the WSJ Risk and Compliance Journal on August 14.

The members of the Everything Compliance panelist are:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Mike Volkov– One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com.
  • Matt Kelly– Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong– Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com

The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Compliance Evangelist.

Aug 13, 2018

Over the next five podcasts, Matt Kelly and I will be exploring the future of internal audit, compliance and analytics. In Part I, we introduce the topic, explaining why internal audit (IA) is in the midst of a profound transformation, how this transformation will enable to move past its traditional detect function into a more proactive prevent role and how all of these transformations will lead to a more robust, operationalized risk management process.

Kelly believes IA is in midst of profound transformation. He explained IA itself is getting better and better technology. It has much more data analytics capability, so they can do a lot more with the data and do it faster but, at the same time, all the other departments in an organization, whether it's marketing, legal, compliance or operations, are receiving that same advance in technology too. This means other departments that IA is supposed to keep an eye on is also advancing with their technology too. Subsequently, their ability to throw off new data that can be analyzed is increasing exponentially at the same time. Kelly termed this as the “datafication” of the business process.

This is coupled with Boards of Directors wanting more bang for their buck out of the IA budget. This translates into the questions of how does IA add strategic value? The answer is a bit of a delicate thing because as IA works for the Board of Directors, it is supposed to be an independent and objective reviewer of business processes and of risks to the business. One of its functions is to recommend ways to reduce risks to acceptable levels. However, with this datafication it becomes much easier for IA to become much more of an analysis function to do more risk monitoring.  

The tech revolution is creating more ability to move beyond traditional audit duties of Sarbanes-Oxley (SOX) compliance, such as the confines of just reviewing financial statements and specific processes at fixed increments every few years. Does this mean that IA can move from a detect function to a more proactive prescriptive function? Kelly believes, “The question is to what degree should it, because there are always going to be these questions about how Internal Audit functions maintain their independence.”

Interestingly, Kelly believes that while the Boards of Directors are directly driving this change, the ultimate pressure is coming from a wide variety of players, including shareholders, regulators, consumers and other stakeholders. All these groups want to see the Board do a better job of managing strategic risk and not be caught with its collective jaw hanging off the floor when a scandal hits an organization. This pressure on Boards of Directors is driving them to ask for more and somewhat different approaches by IA. Kelly believes IA is being pushed beyond its traditional boundaries to “help Boards fulfill a new mission” to help more in the overall risk management process.

This process is also helped by the maturation of the IA function in its control design and testing requirements deriving from SOX. Technology has helped it move away from simple spreadsheets to more sophisticated reporting tools. Now IA has the ability to better interpret the information coming out from these controls. This will allow a greater operationalization of risk throughout an organization. IA can work with business process owners to write algorithms to allow greater self-monitoring of risks at the business or functional unit levels. They can then work to oversee the entire process to make sure the business processes stay within acceptable or defined risk parameters and report back to the Board of Directors. 

In Part II we consider the three steps of evolution that IA must go through to move to a more robust role in the overall risk management process.

Aug 10, 2018

Having watched his beloved BoSox sweep the hated Yankees in a 4 game set in Fenway Park,  Jay is back from a well-earned vacation. He and Tom look at some of the top compliance stories from the past week.

  1. Ben we hardly knew ye. Ben DiPietro announces his retirement from the WSJ Risk and Compliance Journal via Twitter.   
  2. Mike Volkov continues his exploration of blockchain and compliance. In Part 1he considers how blockchain will revolutionize compliance. In Part 2, he provides some real world examples.
  3. Did Elon Musk’s tweet about going private violate securities law? The regulators are looking into it. Ben DiPietro reports in the WSJ Risk and Compliance Journal.
  4. And then there were none. The Jho Low mega yatch sails into Malaysian waters. What happens next? Harry Cassin speculates in the FCPA Blog.
  5. Donald Trump protestations notwithstanding, the DOJ Cyber Task Force issues its first report. Anne E. Railton and James D. Gatta report in NYU’s Compliance and Enforcement blog.
  6. Canada emerges as a money laundering hub? Sam Rubenfeld reports in the WSJ Risk and Compliance Journal.
  7. Down in the lower 48, some 24 state AGs lobby for some sunshine around shell companies. Jaclyn Jaeger reports in Compliance Week. (sub req’d)
  8. There are big changes coming in how lease obligations are accounted for in a company’s books. Is your organization prepared? Tammy Whitehouse tackles it from the accounting angle in Compliance Week(sub req’d). Matt Kelly considers it from a ERM angle in Radical Complaince. Tom and Matt hash it out on Compliance into the Weeds.
  9. We welcome a new commentator in law and compliance. It’s Jonathan Rausch, formerly SVP and head of Anti-Bribery and Corruption Governance at Wells Fargo. Check out his blog Dipping Through Geometries.
  10. The number of podcasts on the Compliance Podcasting Network will reach the 1000 podcast milestone next week. To celebrate, running each week in August will be a special series as a tribute. This week it has been a series on the intersection of Sherlock Holmes and innovation in compliance. Next week it will be the future of audit, Compliance and analytics. You can download the entire series next Monday at noon, on iTunes. The series will post daily at 10 AM on the Compliance Podcast Network.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Aug 7, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a very deep dive into the upcoming changes in lease accounting treatment. While this may not seem like a compliance related topic, it turns out to have more than several implications for the compliance practitioner.

Some of the highlights from this podcast are:

  1. How does you company currently stand in its lease obligations?
  2. What is your document retention and review policy regarding leases?
  3. How will you assess value and risk going forward?
  4. What will be the collateral consequences?

We unpack of all these points and consider strategies going forward.

For more reading: see Matt’s piece Thoughts on Changes to Lease Accounting

What is the intersection of changes to lease accounting and compliance? Matt Kelly and I unpack some of them on this episode of Compliance into the Weeds.

Aug 6, 2018

What is the purpose of rehabilitation in a best practices compliance program? In this episode, I use the recent trade by the Houston Astros for closer Roberto Osuna last week as an introduction into several areas around compliance, discipline, punishment and zero tolerance. Osuna had been charged with violating the Major League Baseball (MLB) policy on domestic abuse. This weekend Osuna came off a 75-game suspension. It involved an incident for assault, for which Osuna pleaded not guilty to in a criminal case in Ontario. As part of this discussion, I consider several questions.

  • What is Zero Tolerance? Does it apply at all times or is it applied only situationally?
  • What is Due Diligence and how does an organization know if it has performed a sufficient level of DD?
  • What effect does or should any of this have on employee morale?
  • What is the purpose of rehabilitation?
  • What is the purpose of discipline in an organization?
  • What is deterrence?

For more reading see my blog post Due Diligence, Zero Tolerance and Compliance.

Aug 3, 2018

With the MLB July 31 trade deadline come and gone, what does zero tolerance mean for the  Astros? Jay is out on a well-earned vacation this week so Tom does a solo show and looks at some of the top compliance stories from the past week.

  1. The Houston Astros trade for Jose Oseuna from Toronto. He is one a 75 game suspension for violation of MLB domestic abuse policy. The Astros have a zero tolerance for domestic abusers. Guess what happened? David Barron lays it bare in the Houston Chronicle.
  2. Mike Volkov has a 3 part series on deterrence and white collar crime sentencing on his site, Crime, Corruption and Complinace.
  3. Mark Pyman says that corporations should take on more responsibility for the global fight against bribery and corruption. In the FCPA Blog.
  4. Feds make another FCPA arrest in PDVSA bribery case. Dick Cassin reports in the FCPA Blog.
  5. What is the future of Mexico’s anti-corruption system? Robert Clark explores in a guest post in FCPAméricas Blog.
  6. What are the teachable moments from the Panasonic FCPA Enforcment action? Eric Lochner opines in the FCPA Blog.
  7. What is the complexity of the compliance regulations in georgraphic regions? There is a new index for this. Jaclyn Jaeger reports in Compliance Week. (sub req’d)
  8. Companies which have done business in Malaysia are under scrutiny from a wide variety of regulators for corruption. Is your company ready? John Bray and Harrison Cheng explain what you should be doing in the FCPA Blog.
  9. Who is the only podcaster in compliance to accept queries via carrier pidgeon? Eric Morehead (of course). Check out his most excellent podcast, Compliance Beat.
  10. Next week I will have a 5 part podcast series on the intersection of Sherlock Holmes and innovation in compliance on my podcast series, Innovation in Compliance. Starting Monday at noon, you will be able to listen in iTunes here.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Aug 2, 2018

As we begin the dog days of summer and the long spell between July 4thand Labor Day, the Everything Compliance gang returns to its four focused topics. After the commentary we follow with rants.

  1. Matt Kelly considers Trump’s move to politicize the selection process for administrative law judges what this might mean for agency enforcement going forward? 
  1. Tom Fox explores three FCPA settlements incorporating the new FCPA Corporate Enforcement Policy and anti-piling on policy. (D&B, Panasonic and Credit Suisse) He considers them in light of some of the following questions: Do these matters increasing the incentive for companies to self-disclose? Will these and similar resolutions increase compliance or will it go the other way and cause companies to take compliance less seriously?
  1. Jonathan Armstrong discusses GDPR at six weeks post go-live. Where are we? What is the difference between public pronouncements by regulators and private actions by EU individuals? Where are we going?
  1. Jay Rosen considers the pro-active uses of monitoring in areas outside anti-corruption compliance. Here I am thinking about uses to satisfy anti-trust agreements with the FTC/DOJ and hospital conversions.

The members of the Everything Compliance panelist are:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Mike Volkov– One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com.
  • Matt Kelly– Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong– Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com

The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Compliance Evangelist.

Jul 27, 2018

With the MLB July 31 trade deadline almost upon us, the Yankees, Indians and Dodgers have significantly upgraded their programs, will the Red Sox and Astros do so? Jay and Tom consider this and take a look at some of the top compliance stories from the past week.

  1. Lots about AI, data analytics and compliance this week. Tom has a three part series on the intersection (Part I; Part II; & Part III). Scott Shaffer goes the other direction, noting how important the human element is in due diligence on theFCPA Blog. Tom relents on the Astros and now admits it was the use of data analytics and not his incessant razzing which lead to last year’s WS win. He reviews Ben Reiter’s book and critiques the Astros on the FCPA Compliance Blog.
  2. Mike Volkov considers corporate culture, values and the ostrich in his exploration of the Beam FCPA enforcement action on Crime, Corruption and Complinace.
  3. A CCO looks at corporate activism. Katie Smith pens a piece in Complaince Week. (sub req’d)
  4. What is your FCPA liability in the M&A context? DAAG Matthew Miner talks about it in a speechat the ACI Anti-Corruption Compliance in High Risk Markets conference (they need a better name) Matt Kelly opines in Radical Compliance. Dick Cassin weighs in on the FCPA Blog.
  5. Tesla leans on suppliers to rebate two-year old payments. Does that change the nature of your business relationship. Tom explores in The Man From FCPA(sub req’d)
  6. How should a company respond to an individual request for information under GDPR? Jeremy Feigelson, Jane Shvets, and Christopher Garrett explore in the NYU Compliance and Enforcement Blog.
  7. What are the downsides to using your founder/CEO/Board Chair as spokesperson? Ben DiPietro explores on the WSJ Risk and Compliance Journal.
  8. Need some insights into assessing your compliance training? Kaplan and Walker are there for you in the Compliance Program Assessment Blog.
  9. Will KPMG survive its ethical scandals? Madison Marriage, Caroline Binham and Martin Arnold explore in the Financial Times.
  10. Who is the only podcaster in compliance to accept queries via carrier pidgeon? Eric Morehead (of course). Check out his most excellent podcast, Compliance Beat.
  11. Tom has 5 part podcast series which explores how Shakespeare informs a best practices compliance program. Henry IV, Part 2; Henry V; Much Ado About Nothing; Othelloand King Lear.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Jul 25, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a deep dive into the imbroglio Salesforce found itself in when it came out the company did work for ICE.

We use this dialogue as a starting point to discuss some of the following:

  1. What is the Trump Risk and how can companies being to manage it?
  2. If a company makes one miss-step does it make another when it tries to engage in ethical offsetting?
  3. Is your organization prepared to stand up for its own culture for ethics in the face of racism shown by the Administration?
  4. How do different stakeholders view you company’s ethical responsibility?

We unpack of all these points and consider the risk management strategies going forward.

For more reading: see Matt’s piece Salesforce Runs Into Trump Risk

Jul 20, 2018

With Papa John founder, former CEO and (now) former Chairman of the Board channeling his inner Donald Trump in saying he really didn’t mean to resign, it is time to take a look at some of the top compliance stories from the past week.

  1. John Schnatter, founder, former PapaJohn Chairman and former CEO now says he really didn’t mean to resign from Board after using racial slur in con call with vendor. He goes on to claim the vendor involved attempted to extort the company, for his use of racial slur and finally he won’t ‘go quietly’ into the night and leave the company. See reports Jordan Valinsky in CNN Money, Julie Jargon in the WSJand Tiffany Hsu in the NYT. Nick Kirsch explores the toxic culture at Papa John in an article in com.
  2. Former Energy XXI founder and CEO hit up vendors for personal loans and sold a Board seat for another loan. Company said he had ‘broken no laws’ but SEC disagrees, fines him and bans him from public companies for five years. Tom reports in the FCPA Compliance and Ethics Blog. See the full SEC Compliant.
  3. Another former PdVSA official pleads guilty to money laundering? Sam Rubenfeld reports in the WSJ Risk and Compliance Journal.Dick Cassin reports in the FCPA Blog.
  4. How much, if any, does the Justice Department have to disclose about monitorship through a FOIA request. See article in Havard Law School Forum on Corporate Goverance.
  5. Hui Chen, says we need more data pioneers in complaince. Kelly Swanson reports in GIR. (sub req’d)
  6. Does a contract procured through corruption invalidate the parties rights under it? Petrobras claims so in Houston case but loses. Dick Cassin reports in the FCPA Blog. Brazilian prosecutors then indicts CEO of US company, after DOJ issues declination. What does it all mean? Adam Dobrik explores in GIR. (sub req’d)
  7. The largest vendor in the compliance space, Navex is sold to BC Partners, a London based Private Equity company. Matt Kelly scooped the story on Radical Compliance.
  8. Should the DOJ encourage whistleblowing in bid-rigging cases? Bob Connolly opines yes in Law360op-ed piece. (sub req’d)
  9. Bill Waite pens a two-part blog providing his refections on compliance during for the 10 year anniversary of the FCPA Blog. In Part Ihe considers how corruption changed the world. In Part IIhe says there is still work to be done.
  10. EU regulators slam Google with $5bn fine for anti-competitive acts. It is not if but when will US retaliate? Ben DiPietro reports in WSJ Risk and Compliance Journal.
  11. Tom has 5 part podcast series with Caterina Bullgarella on her SAI Global White Paper, Predicting Risk: A Strategic Culture Framework for the C-Suite. In Part 1-Introduction, Part 2- The Board, C-Suite and Ethical Risk, Part 3-Espoused Ethics and Actual Values, Part 4- An analysis of Wells Fargo under the Frameworkand Part 5-the Ins and Outs of Ethical Reasoning.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Jul 19, 2018

This week the gang returns to its four focused topics. After the commentary we follow with rants.

  1. Matt Kelly is now convinced that the Trump Risk is a real thing. How can compliance professionals help companies in the age where reputational issues can arise literally with one tweet by the President or one administration policy which goes south? 
  1. Tom Fox explores the key themes in the SocGen/Legg Mason FCPA enforcement actions. 
  1. Jonathan Marks joins us a special guest and takes a look at how the US Supreme Court decision in Digital Realty Trust v. Somers severely damaged internal whistleblower/hotline systems as it removed retaliation protection from employees who go internally first and not to the SEC. How can companies win back employee’s trust on this issue?
  1. Jay Rosen considers that both the head of the SEC and No. 2 at DOJ have recently given speeches talking about corporate culture. With this new emphasis by regulators, what should compliance be doing in response?

The members of the Everything Compliance panelist are:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Mike Volkov– One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com.
  • Matt Kelly– Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong– Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com

On this episode, we are joined as a special guest panelist, Jonathan Mark, a partner at Marcum LLP.

The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Compliance Evangelist.

Jul 18, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a deep dive into a debate started when Michigan State University Interim President John Engler said that the role of compliance is to spot red flags which arise from the violations of policies and procedures. He was excoriated for this by Detroit Free Press columnist Rochelle Riley who said there were plenty of red flags about Larry Nassar but there was no commitment from senior management to stop the conduct. All of this begs the question: what is ethics and compliance?

We use this dialogue as a starting point to discuss some of the following:

  1. What is ethics and compliance?
  2. Are empathy and escalation equally important to compliance as policies and procedures?
  3. When you have a top dog claiming those who report abuse are doing it only to receive compensation, can you ever have a trusting relationship with those below you?
  4. How can any organization respond to reputational damage in the current atmosphere?

We unpack of all these points and consider the implications for corporate compliance programs.

For more reading: see Matt’s piece Another Compliance Lesson From Michigan State

Jul 18, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a deep dive into a debate started when Michigan State University Interim President John Engler said that the role of compliance is to spot red flags which arise from the violations of policies and procedures. He was excoriated for this by Detroit Free Press columnist Rochelle Riley who said there were plenty of red flags about Larry Nassar but there was no commitment from senior management to stop the conduct. All of this begs the question: what is ethics and compliance?

We use this dialogue as a starting point to discuss some of the following:

  1. What is ethics and compliance?
  2. Are empathy and escalation equally important to compliance as policies and procedures?
  3. When you have a top dog claiming those who report abuse are doing it only to receive compensation, can you ever have a trusting relationship with those below you?
  4. How can any organization respond to reputational damage in the current atmosphere?

We unpack of all these points and consider the implications for corporate compliance programs.

For more reading: see Matt’s piece Another Compliance Lesson From Michigan State

Jul 18, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a deep dive into a debate started when Michigan State University Interim President John Engler said that the role of compliance is to spot red flags which arise from the violations of policies and procedures. He was excoriated for this by Detroit Free Press columnist Rochelle Riley who said there were plenty of red flags about Larry Nassar but there was no commitment from senior management to stop the conduct. All of this begs the question: what is ethics and compliance?

We use this dialogue as a starting point to discuss some of the following:

  1. What is ethics and compliance?
  2. Are empathy and escalation equally important to compliance as policies and procedures?
  3. When you have a top dog claiming those who report abuse are doing it only to receive compensation, can you ever have a trusting relationship with those below you?
  4. How can any organization respond to reputational damage in the current atmosphere?

We unpack of all these points and consider the implications for corporate compliance programs.

For more reading: see Matt’s piece Another Compliance Lesson From Michigan State

Jul 12, 2018

While dodging black cats, open ladders and broken mirrors, Jay Rosen and myself are back on this Friday the 13thto take a look at some of the top compliance stories from the past week.

  1. Want to take a deep dive into the Credit Suisse FCPA enforcement action? Check out Tom’s 3-blog post series (Part I, Part IIand Part III) and Mike Volkov’s two-part series (underlying factsand lessons learned).
  2. What’s the best way to use data to detect corruption? Enestor Dos Santos, principal economist at BBVA Research writes in Global Anti-Corruption Blog. For the full BBVA Research report clickhere.
  3. Did FCPA enforcement pick up in Q2? William Garrett explores this question in WSJ Risk and Compliance Journal.
  4. Romania's president removes chief anti-corruption prosecutor. Radu-Sorin Marinas reports in Reuters.
  5. Tony Hayward (yes, that Tony “I want my life back” Hayward) will lead Glencore’s corruption investigation. What could go wrong? Harry Cassin explores in the FCPA Blog. Is Glencore pushing the corruption risk envelope too far? David Pilling opines in the Financial Times. (sub req’d)
  6. Does AI create or simply expose ethical dilimmmas? (Hint-it’s all about the data). Vera Cherepanova explores this question in the FCPA Blog.
  7. The second half thebriberyact.com guys; Richard Kovalevsky QC leaves Chambers to move to Stewart’s. Waithera Junghae reports in GIR. (sub req’d)
  8. Is the administration’s moves against ZTE part of a larger all out trade war strategy against China and/or the rest of the world? Louise Lucas explores this question in the Financial Times. (sub req’d) New management says compliance is the top priority. See report in com.
  9. Tone at the top really does matter. PapaJohn Chairman (and former CEO) resigns from Board after using racial slur in con call with vendor. Vendor fires PapaJohn’s as client. See report in Wall Street Journal.
  10. Uber finally gets a CCO but loses its head of HR. Greg Bensinger and Sadie Gurman report in the WSJon the hire. Bensinger reports on the resignation of the head of HR in WSJas well.
  11. The Red Sox have the best record in baseball at the All-Star break. Can they avoid yet another collapse? Jay and Tom debate.

What do black cats and Friday the 13th have to do with compliance? Find out on This Week in FCPA.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Jul 9, 2018

In this episode I podcast favorite James Koukios returns to discuss some of the highlights from the Morriston and Foerster newsletter on Top Ten International Anti-Corruption Developments for April 2018. Some of the highlights include:

  • D&B Declination for FCPA violation-how did the company get such a great result?
  • IMF “Steps Up” Engagement on Governance and Corruption. On April 22, 2018, the IMF announced that its Executive Board had endorsed a new framework for “stepping up” engagement on governance and corruption in its member countries. What does this mean for companies?
  • Individual prosecutions continue related to PDVSA. What does this mean, together with the tightening sanctions against Venezuela for US companies still trying to do business in that country or stuck it out hoping for regime change.
  • Aruban Official and Florida-based Telecom Executive Plead Guilty in Connection with Bribery Scheme. Use these guilty pleas to discuss the bookends of corruption; bribe payor and bribe receiver. How does the DOJ look at this problem and what tools are available to prosecutors?
  • Areas of the globe in which companies currently doing business need to take a close look at their operations. I have suggested South African and Malaysia. Are there others the DOJ might be looking at?.
  • As an added feature we move to a current event, the news of a Subpoena issued to Glencore by the Justice Department, in part related to a FCPA investigation. We consider what delivery of a Subpoena means from the DOJ and company perspective.
Jun 29, 2018

As get ready for a holiday week, Jay Rosen and myself are back in the saddle again to take a look at some of the top compliance stories from the past week.

  1. What happens when you lose your ethical way and its splashed across the front page of the NYT? See article in the New York Timesby By Walt Bogdanich and Michael Forsythe on McKinsey and its ill in South Africa.  
  2. Walt Pavlow asks if business schools should stop teaching ethics and substitute the US Sentencing Guidelines. Check it out in Forbes.com.
  3. What is the real world role of a CCO? Kelly Swanson explores in Just Anti-Corruption(sub req’d)
  4. Why using independent monitors is forward thinking in the compliance realm. Bart Schwartz explore in the FCPA Blog.
  5. The SFO charges Unaoil for bribery and corruption. Dick Cassin reports in the FCPA Blog. Sam Rubenfeld reports in the WSJ Risk & Compliance Journal.
  6. Did the leopard change its spots or did something real change? Delaware supports an overhaul of benficial ownwership requirements. See article by Henry Cutter in the WSJ Risk & Compliance Journal.
  7. An AML sentencing bookend a FCPA sentencing. Tom explains why this is important in the FCPA Compliance and Ethics Blog.
  8. After the announcement of the new FCPA Corporate Enforcement Policy in November 2017, what should we call the new type of declination? Maddie McMahon explores in the Global Anti-Corruption Blog.
  9. SEC votes to limit whistleblower awards. Will it impact the SEC whistleblower program? Francine McKenna explores in MarketWatch.com.
  10. Tom’s new book The Complete Compliance Handbookremains a hot seller. It is available oncom. Purchase an autographed copy here. It is reviewed in the FCPA Blog, Radical Complianceand Corruption, Crime and Compliance.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Jun 28, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a deep dive back into the impact of the Trump Administration’s attack on friend and foe alike with tariffs, trade wars, embargoes and sanctions.  This is also our first live podcast from Matt’s stomping grounds in Cambridge, MA.

What does all this mean for the compliance practitioner? Obviously, your job just became a lot harder. The scrutiny both public and private will be much greater. You will need much greater visibility into what business your organization is into going forward.

For more reading: see Matt’s piece on “Corporate Ethics & Politics: It’s Gonna Get Worse” and “Trade War! Trade War! Man the Barricades!”,both on Radical Compliance. See Tom’s piece, “Condos, Corruption and Compliance” in Compliance Week. 

Jun 23, 2018

Before we head to Boston for an event at AMI on Monday, Jay Rosen and myself are back in the saddle again to take a look at some of the top compliance stories from the past week.

  1. Inside the Fall of Mossack Fonseca, reviewed by Dick Cassin in the FCPA Blog.
  2. Where will your next crisis come from? Today’s news or 10 years ago? Sam Rubenfeld reports on the reputational hit companies which helped separate children from their parents at the border in the Wall Street Journal Risk & Compliance Journal. Ben DiPietro considers the trial in France of the fallout from a 10 year old corporate restructuring, also in the Risk & Compliance Journal.
  3. The OECD is looking at anti-corruption enforcement and finds it lacking in Germany and in trouble in Norway. Henry Cutter reports on Germanyand Sam Rubenfeld on Norway, both in the WSJ Risk and Compliance Journal.
  4. Brazil is a model for international enforcement, investigations and cooperation, believes Kees Thompson, writing in the Global Anti-Corruption Blog.
  5. How do you classify your third parties? Mike Volkov explains it in the Navex blog, Ethics and Compliance Matters. On his blog Corruption, Crime and ComplianceMike discusses how to build a business case for a third party risk management system.
  6. Auditors behaving badly. Tammy Whitehouse reports on a negative report from U.K. Financial Reporting Council in Compliance Week. (sub req’d)Francine McKenna, writing in MarketWatch reports on the continuing KPMG
  7. SEC Chief Jay Clayton talks corporate culture. Matt Kelly, writing in Radical Compliance, finds it lacking.
  8. How does Sherlock Holmes inform your compliance program? Tom explored in a 5-day series. Part I-Communication; Part II-Institutional Justice; Part III-Criminality; Part IV-Mentoring; and Part V-Imagination.
  9. Support your local book sellers! River Oaks Bookstore, 3270 Westheimer, in Houston is now stockingThe Complete Compliance Handbook. Tom will be on hand for a book signing on Thursday, June 28 from 5:30 to 7.
  10. Tom’s new book The Complete Compliance Handbookremains a hot seller. It is available oncom. Purchase an autographed copy here. It is reviewed in the FCPA Blog, Radical Complianceand Corruption, Crime and Compliance.
  11. Serving up some Breakfast and Compliance. Join Tom in Boston on June 25 at the offices of Affiliated Monitors to learn here about show the story of compliance is the story of innovation. For more information and registration, click here.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Before we head to Boston for bagels, coffee and compliance at the offices of AMI, Jay Rosen and I review the week's top ethics and compliance stories on This Week in FCPA.

Jun 14, 2018

Everything Compliance is the only roundtable podcast in compliance, with four of the top compliance practitioners around. This week the gang returns to its four focused topics on its Four of a Kind edition. After the commentary we follow with rants.

  1. Matt Kelly considers the new management strategy of reducing middle management in corporations. Where does compliance fit into this new structure? Matt rants on DOJ advisory opinions for Foreign Agent Registration Act (FARA) issues. 
  1. Mike Volkov explores the upcoming compliance reckoning. What is it and how should compliance professionals prepare? Mike rants on the cynical and ridiculous pardons granted by President Trump. 
  1. Jonathan Armstrong reviews the new UK Data Privacy-Data Protection Law. Jonathan rants on lack of engagement by the British public in the electoral process and governance debate.
  1. Jay Rosen considers the importance of corporate culture. How does one survey, understand and then improve corporate culture? How can you demonstrate any of these steps to a regulator or the DOJ? Jay has a heavy heart around the losses this week of Anthony Bourdain and Kate Spade, both by their own hand.

The members of the Everything Compliance panel are:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Mike Volkov– One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com.
  • Matt Kelly– Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong– Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com

The host and producer of Everything Compliance is Tom Fox theCompliance Evangelist. His most recent book, The Complete Compliance Handbook is available on amazon.com.

Jun 13, 2018

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly and I take a deep dive back into the issue of the decline in Initial Public Offerings (IPOs). We consider legislation in the House of Representatives to gut the compliance requirements of Dodd-Frank and SOX, all in the name of increasing the number of IPOs. 

We review the testimony of Columbia Law School Professor John Coffee before a Congressional committee about these latest initiatives. His testimony is reported by Kevin LaCroix in his most excellent blog, the D&O Diary. Professor Coffee’s testimony  reflects his skepticism that further deregulation alone will result in increased numbers of IPOs. He relates several reasons for the worldwide drop in IPOs, which have nothing to do with Dodd-Frank, SOX or any other US law as they are structural and baked into the global financial system. He also notes that small companies which do go IPO usually have much worse financial performance than companies which seek funding through private equity.    

Professor Coffee’s testimony clearly demolishes the myth that Dodd-Frank was a job killer bill or that SOX’s Sec. 404 and 302 requirements have lessened the number of IPOs. There are a wide variety of factors, none of which has been addressed in the House legislative initiatives.

Jun 7, 2018

With a wild ride of FCPA cases over the past week, Jay Rosen and myself are back in the FCPA saddle  again to take a look at some of the top compliance stories from the past week.

  1. Société Générale S.A. becomes No. 5 in the Top 10 of FCPA settlements, paying $585MM for bribes paid to garner business in Libya. Dick Cassin reports in the FCPA Blog. Henry Cutter reports in the WSJ Risk and Compliance Journal. Jaclyn Jaeger gives full coverage to the FCPA and LIBOR violations in Compliance Week. (sub req’d)
  2. Legg Mason pays $71MM for being SocGen’s partner and fellow bribery schemer in Libya. Dick Cassin breaks the story (as usual) in the FCPA Blog. Tom blogs on Legg Mason hereand notes the inter-relatedness of the two matters in another blog here. The Legg Mason NPA is available here.
  3. Credit Suisse pays $47MM to settle a princeling FCPA enforcement action for its illegal hiring of sons and daughters of Chinese government officials. Dick Cassin reports in the FCPA Blog.
  4. In another princeling matter, Jonathan Browning and Donal Griffin report in Bloomberg that Deutsche Bank AG is under FCPA scrutiny for similar practices involving sons and daughters of Russian government officials.
  5. The new Director of the UK Serious Fraud Office is a Yank. See report by Dick Cassin in the FCPA Blog. Mara Lemos Stein asks if she will recharge the SFO in the WSJ Risk and Compliance Journal. The Bribery Act guys, Barry Vitou and Richard Kovalevsky QC give their take on com.
  6. Channelling his inner Churchill, Mike Volkov asks what happens when corporate leaders fail to listen. Find out in Corruption, Crime and Compliance.
  7. Netflix is more than a disruptor in movie watching and entertainment. It’s corporate governance model is also quite unique. Bill Snyder tells us how in Insights by Stanford Business.
  8. The devastating and company closing sanctions against ZTE will be lifted based upon a new deal with the Department of Commerce. Dick Cassin reports in the FCPA Blog. Anna Swanson reports in the NYT. Sam Rubenfeld reports in the WSJ Risk and Compliance Journal. Alex Lawson, writing in Law360 asks if sanction relief is now for sale?
  9. Tom announces a new Compliance Master Class, which will be held in Houston on June 21 & 22. Information and registration is available here. Learn about compliance from the guy who wrote the book on compliance.
  10. Support your local book sellers! River Oaks Bookstore, 3270 Westheimer, in Houston is now stockingThe Complete Compliance Handbook. Tom will be on hand for a book signing on Thursday, June 28 from 5:30 to 7.
  11. Tom’s new book The Complete Compliance Handbookremains a hot seller. It is available oncom. Purchase an autographed copy here. It is reviewed in the FCPA Blog, Radical Complianceand Corruption, Crime and Compliance.
  12. Tom has a great five-part series on Suspension and Debarment with AMI Managing Director Rod Grandon. Check out all five topics. Part 1-Introduction; Part 2-the differences between suspension and debarment; Part 3-Convergence of suspension and debarment and the FCPA; Part 4-what is present responsibility?; and Part 5-Remedies and Compliance. It is available on the FCPA Compliance Report, iTunes, Libsyn, YouTubeand JDSupra.

For more information on how an independent monitor can help improve your company’s ethics and compliance program, visit our sponsor Affiliated Monitors at www.affiliatedmonitors.com.

Jun 4, 2018

In this episode I visit with John Torres, the COO of Guidepost Solutions. We discuss the recent SEC enforcement action involving Yahoo and its failure to disclose data breaches in 2014, 2015 and 2016. As this was the first SEC enforcement action involving a public company for the failure to disclose to investors and shareholders information of a data breach which materially impacts an organization, Torres and I take a deep dive into the matter.

In this episode, we consider some of the following issues:

  • A discussion of the background facts in the Yahoo SEC enforcement action and why the matter is so important?
  • We consider what the SEC said was the obligation of a publicly listed company when it learns of a breach?
  • In Paragraph 9 of the SEC Order, there were a series of risk factors listed. We discuss their importance.
  • We consider when a publicly listed company must disclose a breach to outside auditors and/or outside counsel.
  • We consider the sufficiency of the penalty.

For a full copy of the SEC Order involving the Yahoo matter, click here.

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