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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
May 21, 2018

In this episode I visit with Nate Lankford, member at Miller & Chevalier on the firm’s FCPA Spring Review 2018. The quarterly Miller review is also an excellent resource for any FCPA or compliance practitioner, chocked full of statistics on enforcement actions, legal and compliance analysis, reports on international FCPA developments and commentary. It has always been a ‘Must Read’ review for any compliance professional. The FCPA Spring Review 2018 continues this trend.

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

  • What if anything, can be gleaned from the now one plus year of enforcement under the Trump Administration and Sessions-led Justice Department.
  • Has there been an untick in declinations?
  • Any uptick in individual prosecutions?
  • What are some of the key points from the following enforcement actions: Elbit, Transportation Logistics and Kinross?
  • Some of the top international developments including: Canada Updates Anti-Corruption Law and Enforcement Tools; French Anti-Corruption Agency Issues First Official Guidelines and France Enters into Two More Bribery-Related Negotiation Resolutions; Airbus Payment in Germany
  • The Digital Realty Trust v. Somers decision at the US Supreme Court and its implications for companies and compliance practitioners.
  • What has been the response to the new FCPA Corporate Enforcement Policy requirement for companies to prohibit software that generates but does not retain business records or communications.

A copy of the Miller & Chevalier FCPA Spring Review 2018 can be found here.

The quarterly Miller FCPA Review is a must read for any compliance professional. The Spring Review 2018 is no exception.

May 18, 2018

With Uncle Duke joining the compliance debate around Michael Cohen, Jay Rosen and myself take a look at some of the top compliance stories over the past week.

  1. The fallout from the Michael Cohen revelations continue to explode across the compliance universe. Matt Kelly considers it from a COSO perspective in Radical Compliance, Tom and Matt podcast have another podcast about it on Compliance into the Weeds, Tom channels his inner Hunter S. Thompson for a three part series, Part I-the Start, Part II-Full Gonzo and Part III-Uncle Duke. The NYT reportsthat the Novartis GC loses his job over the scandal.
  2. Rod Rosenstein announced a new “anti-piling on” policy. What does it mean for FCPA enforcement? Lara A. Covington and Michael E. Hantman, writing in the FCPA Blog, point out the strings attached and potential rewards. Tom considers the new policy (channeling Tom Wolfe) here.  For the full text of Rosenstein’s remarks see here.
  3. Writing in forbes.com Dan Pontefract says we need ethics professionals more than ever.
  4. The purveyors of the most excellent Global Anti-Corruption Blog, Rick Messick and Matthew Stepenson both post articles decaptitating the arguments against transparency into shell corporations. Rick’s piece is here. Matthew’s piece is here.
  5. What is it like to negotiate a FCPA/Bribery Act resolution, while heading up the remediation. Phoebe Seers reports on how the Innospec GC/CCO handled it in Mlex.
  6. Trump tweets out to protect Chinese jobs in the ZTE sanctions case. What are the implications? Sam Rubenfeld takes a look at the landscape in WSK Risk & Compliance Journal.
  7. Businesses are finding value in combining sustanibility and compliance. Ben DiPietro reports in the WSJ Risk & Compliance Journal.
  8. Cybersecurity whistleblowers are becoming increasingly important to the SEC and in the corporate world. Henry Cutter reports in the WSJ Risk & Compliance Journal.
  9. Rockets square their series with Golden State 1-1 and are heading out west. Celtics head to Cleveland up 2-0.
  10. Tom announces publication date of his next book, The Complete Compliance Handbook,which will be available on May 21, 2018 on Amazon.com. If you are attending Compliance Week 2018, Tom is have a book signing party on Monday, from 2:15 to 2:45. Come by and pick up an autographed copy.

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.

May 16, 2018

In this episode, Matt Kelly and I take a continued deep dive into the travails of Michael Cohen, AT&T and Novartis for their hire of Cohen’s company Essential Consulting. After last week’s emergency podcast on the topic, we take a more measured discussion of the latest series of allegations. We discuss the PR disaster which has beset both AT&T and Novartis and where things may be headed.  

For more reading on Cohen, Essential Consulting, AT&T and Novartis, see

Tom’s three piece series:

Michael Cohen, 3rd Party Consultants and Hunter S. Thompson: Part I

Michael Cohen, 3rd Party Consultants and Hunter S. Thompson: Part II, Full Gonzo

Michael Cohen, 3rd Party Consultants and Hunter S. Thompson: Part III - Where is Uncle Duke?

 

Matt Kelly’s piece AT&T Wins Ethics Award, Looks Ridiculous

May 14, 2018

In this episode I present a live podcast recording made at the 6thLEC Compliance Conference in Sao Paulo last week. In the podcast I interviewed Carlos Ayres, partner at Meada, Ayres and Sarubbi and Matt Ellis, Member at Miller & Chevalier. We discuss the burgeoning compliance scene in Brazil and across the continent of South America. Ayres reflects on some current issues facing compliance practitioners in region. Ellis discusses the raft of new anti-corruption laws in the continent. They both discuss the challenge of representing multi-nationals across the continent who may be subject multiple ongoing investigations and enforcement actions. They point out some of the unique compliance issues for the region. It is fascinating discussion of the current state of compliance and anti-corruption enforcement in Brazil and across the entire continent.

May 11, 2018

 As former DAG Sally Yates returns to private practice at King & Spalding, in the words of LL Cool J, “Don’t call it a comeback, I been here for years,” Jay Rosen and myself take a look at some of the top compliance stories over the past week.

  1. Michael Cohen explodes across the compliance universe. Matt Kelly writes in Radical Complianceand Buzzfeed, Tom and Matt podcast on Compliance into the Weeds, Francine McKenna quotes Matt and Mike Volkov in her piece on com. Finally Joe Mont considers it from the Bank Secrecy Act compliance angle in Compliance Week(sub req’d).
  2. Sally Yates returns to private practice at King & Spalding. com(sub req’d)and Washington Post.
  3. Katie Smith is the first chief ethics and compliance officer at Convercent, and has brought with her some new ideas about how to use technology to improve E&C Corporate Counsel
  4. GIR/JAC– Lawyers laud criminal division’s diversity provision for monitors (Pansonic Avionics DPA)
  5. FCPA Blog– Dick Cassin writes about Colombia investigating a dozen companies for overseas bribery
  6. FCPA Blog– Ankura’s Spinelli and Pilosio: Why is the construction industry so vulnerable to corruption?
  7. WSJ Risk & Compliance Journal– Ben DiPietro -- The Morning Risk Report: Companies Need to Look Deeper at Supply Chains
  8. WSJ Risk & Compliance Journal– Henry Cutter -- DOJ Targets ‘Duplicative Penalties’ Through Increased Coordination. See full text of Rosenstein remarks here.
  9. Tom reports on a week of speaking to compliance professional in Brazil. See his blog post Reflections on Week of Compliance in Brazil.
  10. Tom announces publication date of his next book, The Complete Compliance Handbook, which will be available on May 21, 2018 on Amazon.com. It is available for PreSale 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.

May 11, 2018

In this first emergency Compliance into the Weeds podcast, Matt Kelly and myself review the information that Michael Cohen was paid by several US and international multi-national organizations for insight on and influence upon the Trump Administration. We consider it from the compliance angle and what steps a company is going to take if it hires the President’s personal lawyer as its paid lobbyist.

For more see Matt’s blog post on Radical Compliance entitled “Oh Lord, Michael Cohen Risk Is Now a Thing

And for even more see Matt’s piece in buzzfeed.com entitled, “It's Harder To Pay Off Foreign Governments Than The US One

May 7, 2018

In this episode Susan Divers, Senior Advisor at LRN returns to talk about LRN’s 2018 Program Effectiveness Report. Divers noted that in 2017, in its Evaluation of Corporate Compliance Programs and new FCPA Corporate Enforcement Policy, the DOJ refocused ethics and compliance programs on outcomes, not procedures. The 2018 Program Effectiveness Report demonstrates that, programs focused on values outperform those based primarily on checklists and rules. Divers believes this has only become more important in the wake of the Weinstien scandal and the #MeToo movements, as sexual harassment scandals continue to erupt in companies with programs that may well have codes of conduct and reporting procedures, but apparently lack traction in preventing and dealing with actual misconduct.

We discuss some of the Report’s key findings the most effective E&C programs – and the ones that meet the 2017 DOJ criteria engage in the following:

  • “Operationalize” ethics and compliance using principles and values that inform all organizational decisions, not just those made in a legal or regulatory context.
  • Ensure that the company analyzes the root cause of misconduct, rather than simply punishing misconduct.
  • Embrace accountability and transparency – even if it means holding senior leaders or successful performers fully accountable for their actions.
  • Make sure senior leaders, middle managers and boards of directors are engaged in preventing misconduct, and that the function isn’t left exclusively to lawyers or compliance staff.
  • Are continuously reviewed and improved to ensure they remain value-focused and effective in terms of influencing workplace behavior in a positive way.

Those which fall short have the following characteristics:

  • Fewer than half of the E&C professionals who responded – 49% – said senior leaders in their company get actively involved in and take responsibility and action in instances of compliance failures.
  • Only 38% said their organization’s leaders support appropriate sanctions or penalties on senior-level top performers involved in misconduct.
  • Only 43% said leaders consider E&C factors in business and planning decisions such as new business ventures, mergers and operations reviews.

For LRN Corporation’s 2018 Program Effectiveness Report go to: http://pages.lrn.com/2018-program-effectiveness-report.

May 4, 2018

As we celebrate all things Star Wars on the May the Fourth Be With You edition, Jay Rosen and myself take a look at some of the top compliance stories over the past week.

  1. Panasonic settles FCPA enforcement action. Tom spends most of the week on it Background, the Bribery Schemes, a 20% Discountand Lessons Learned. Henry Cutter explores the due diligence and Trace Certification issues in the WSJ Risk and CorruptionJournal as does Kelly Swanson in GIR(sub req’d).
  2. Former VW CEO indicted in emissions-testing scandal. Jack Ewing reports in the NYTand Adrienne Roberts and Christina Rogers report in the WSJ. Dick Cassin reports in the FCPA Blog.
  3. What does the D&B declination mean for self-disclosure? Clara Hudson explores inGIR(sub req’d).
  4. An interesting UK court case considers whether lawyer interviews are privileged when the company agrees to a DPA with the SFO. For an English lawyer perspective, see article in the FCPA Blogby Susan Hawley. For another perspective, see the article by Debevoise & Plimpton lawyers Karolos Seeger, Andrew Lee and Robin Lööf in the NYU Compliance and Enforcement Journal.
  5. Are you using data to power your compliance program? If not you are missing the boat say Ren McEachern and Roy Pollitt in the FCPA Blog.
  6. Two looks at speaking up in a company. Jonathan Marks on how to win back employees trust so they will use a hotline. From an article in Fraud Magazine, he cross-posted on his blog. Henry Cutter interview Public Service Enterprise Group Inc. CCO Antonio Fernández on building a speak up culture in WSJ Risk and Compliance Journal.
  7. Matt Kelly joins us for a special breaking news segment on 5 steps law enforcement officials expect you to engage in if you have a data breach. See Matt’s article in Radical Compliance.
  8. What are the GDPR implications for whistleblowing? Vera Cherepanova explores in the FCPA Blog.
  9. Another week, another declination, this time for Transocean. Kelly Swanson reports in GIR(sub req’d).
  10. Tom announces publication date of his next book, The Complete Compliance Handbook, which will be available on May 21, 2018 on Amazon.com. It is available for PreSale here.
  11. Tom has a busy May planned. Join him at Brazil’s largest compliance conference, the 6th International Compliance Congress, held by LEC – Legal, Ethics and Compliance, May 8 to 10, in São Paulo, Brazil. Registration and information here; Hear him speak to the Houston chapter of ACAMS, from 11:30 -2 PM on Thursday May 17thin Houston on “Driving Compliance and Ethics through Data Analysis”. Information and registration here;and join in a session on Using Frameworks to Prove Compliance Competency at Compliance Week 2018 in Washington DC, May 20-23. Information and registration are 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.

May 2, 2018

In this episode, Matt Kelly and I take a continued deep dive the underlying assumptions around the reasons for lack of IPOs by small and mid-cap sized firms. We focus on a speech by SEC Commissioner Robert Jackson recently gave exploring possible reasons why middle market companies aren’t going public. It turns out that the numbers showed that the costs for going public, roughly 7% of the total return has remained constant since the early 90s.

While the Administration has consistently talked about the costs of going public driven by the administrative cost required under Sarbanes-Oxley and Dodd-Frank, it turns out that is only part of the equation. The other part is investment bankers whose fees have not dropped or even become more efficient in nearly 25 years.  We explore the implications from this finding, what it may mean for the SEC’s attempts to bring more small and mid-cap companies into the public market and compliance going forward.

For more see Matt Kelly’s piece More on Declining IPO Trends

Apr 30, 2018

In this episode I visit with Morrison and Foerster partner James Koukios on the firm's January and February Top Ten international anti-corruption cases, issues and developments. In this episode we discuss the following:

  1. PDVSA and related indictments/issues/enforcement actions and the push from the business community to attack corruption from the demand side, as opposed to a FCPA-supply side. 
  2. In February 2018, two FCPA-related civil RICO suits were filed. While FCPA-related plaintiff suits are increasingly common, they more often take the form of shareholder derivative actions or securities fraud class actions. What are the implications if any for the compliance professional?
  3. The implications of Digital Realty Trust from the (former) DOJer perspective.This decision may well be a mixed bag for companies with a short term win translating into long-term negative consequences. 
  4. Canadian DPA initiative and the working relationship between anti-bribery prosecutors in the US and Canada. 
  5. Petrobras shareholder settlement-outlier or harbinger of things to come. We explore if the unique set of facts led to the settlement or will it mean more and similar actions.
  6. Declinations in January and February-what if anything do they communicate to the compliance practitioner, particularly in light of the new FCPA Corporate Enforcement Policy announced by the Justice Department in late 2017. 

For further reading see the Morrison and Foerster, Top Ten International Anti-Corruption Developments for January 2018 and Top Ten International Anti-Corruption Developments for February 2018

Apr 20, 2018

With Wells Fargo about to be fined $1 billion for behaving badly, Jay Rosen and myself take a look at some of the top compliance stories over the past week.

  1. Wells Fargo expected to be fined $1 billion for variety of alleged misdeeds. Emily Flitter and Glenn Thrush report in the New York Times.
  2. Michael Held, general counsel and executive vice president of the Legal Group at the Federal Reserve Bank of New York, talks about the 3 lines of defense. His remarks are found in the NYU Compliance and Enforcement Blog.
  3. New Assistant DAG, Matthew Miner said in private practice he wants to give corporations more breaks on sentencing and cut back on Yates Memo. Will he continue to do so now that he is on the team? Adam Dobrik reports in GIR Investigative(sub req’d)
  4. Engaging in bribery and corruption still doesn’t pay as Feds seek 40-month sentence for cooperating Florida telecom exec. Dick Cassin reports in the FCPA Blog.
  5. If you lie to the DOJ and you are under a DPA, you are in big trouble, the ZTE experience. See Dick Cassin’s report in the FCPA Blog.
  6. Yet another guilty plea in the PdVSA corruption case. This time it was Ceasar Rincon and it was for money-laundering. Henry Cutter reports on it in the Wall Street Journal, Risk and Compliance Journal. See DOJ Press Release. See also Rincon’s Indictment.
  7. Will DPAs really work outside the US? Rick Messick explores in theGlobal Anti-Corruption Blog.
  8. Tom announces presales of his next book, the Complete Compliance Handbook, which will be published by Compliance Week in April 2018. It is available for PreSale here.
  9. The Everything Compliance gang is back in Episode 27 with a deep dive into Mark Zuckerberg’s Facebook testimony, the Michael Cohen subpoena and more. It is available on the FCPA Compliance Report, iTunes, Libsyn, YouTubeand JDSupra.
  10. Tom will be presenting a webinar with Opus Global and Hiperos on the Convergence of ABC and GDPR, next Wednesday, April 25 at 11 AM EDT. The event is at no charge. For registration and additional information, 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.

Apr 19, 2018

This week the gang goes for more of a roundtable Q&A with a couple of topics. We first consider the testimony of Facebook CEO Mark Zuckerberg before Congress and his company’s imbroglio with Cambridge Analytica and then the search warrant issued to Michael Cohen. Stayed tuned to the end for rants in this edition.

  1. Matt rants on the sexual scandals surrounding Missouri governor Eric Greitens. 
  1. Mike rants on inanity of quarterly FCPA enforcement statistics as being used for anything meaningful.
  1. Armstrong rants about the lack of authenticity of American politicians who film advertisements of themselves driving pick-up trucks.
  1. Jay gives a shout out and rants about his Boston Red Sox leading the AL.

I give a shout out to invertebrates and the most recent addition from the political class, Paul Ryan.

The members of the Everything Compliance panel include:

  • 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, is the former Editor of Compliance Week. 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
Apr 18, 2018

In this episode, Matt Kelly and I go meta as we go into the weeds about Weed, in the context of the recent announcement by the administration that it would not prosecute persons or producers in states where marijuana sales are legal. In exchange for this concession, Colorado Senator Corey Gardner says he will lift a hold he placed on all Justice Department nominations since January. We also discuss the recent addition of John Boehner and William Weld as advisory directors to the marijuana producer Acerage and how this changing landscape impacts compliance. 

For more see Matt’s blog post Weed Compromise Moves DOJ Nominees

Apr 13, 2018

With the Red Sox leading the AL with a 10-2 start and back to brawling with the NY Yankees, Jay Rosen and myself take a look at some of the top compliance stories over the past week.

  1. Is there a new health care focus coming in FCPA enforcement actions? Joseph Spinelli and Lisa Murtha explore this issue in the FCPA Blog.
  2. Mark Zuckerberg testifies before Congress. What are the implications? Sascha Matusak says a wave of litigation is coming on the SCCE Compliance and Ethics.  Ben DiPietro wraps up national coverage on the WSJ Risk and Compliance Journal. Joe Mont explores the potential regulatory aspect in Compliance Week. (Sub Req’d)
  3. The SEC awarded more than $2.1 million to a former company insider "whose information led to multiple successful enforcement actions. Dick Cassin reports in the FCPA Blog.
  4. Do ‘No-Poach’ agreements violate anti-trust law? Jaclyn Jaeger explores in Compliance Week. (sub req’d)
  5. A Navex Global report says that more hotline and whistleblower reports are turning out to be valid after corporate investigations? Henry Cutter reports on the report in the WSJ Risk and Compliance Journal. Carrie Penman considers three key finding on Navex’s Ethics and Compliance Matters
  6. Tom Topolski and Eric Feldman talk about how make the relationship between a corporate monitor and corporation work. Check out the SCCE Compliance Perspectives podcast, hosted by Adam Turteltaub.
  7. FinCen rules on customer due diligence and ultimate beneficial ownership go into effect on May 11. What are the implications for non-financial institutions? Check out FinCen’s FAQs here.
  8. Tom announces presales of his next book, the Complete Compliance Handbook, which will be published by Compliance Week in April 2018. It is available for PreSale here.
  9. Tom will be leading Convercent Roundtables on using data to drive ethics to the center of business on Houston (April 17) and Dallas (April 18). He will lead discussions on using data to drive ethics into the center of business.
  10. The Everything Compliance gang will be back on Thursday April with a deep dive into Mark Zuckerberg’s Facebook testimony, the Michael Cohen subpoena and more. Check it out next Thursday.
  11. AMI’s Eric Feldman will be speaking on How Audits Become Investigations at the 2018 Public Service Internal Audit Conference in Singapore, hosted by The Institute of Internal Auditors Singapore, on April 18, 2018. For information and registration, click here.
Apr 11, 2018

In this episode, Matt Kelly and I take a deep dive into the weeds to what drives misconduct at the C-Suite, Senior executive level by considering the most current examples of privilege and arrogance in the current administration, Scott Pruett at the EPA. We consider his actions from the compliance perspective, the HR perspective and corporate governance perspective.

What drives CEOs, C-Suiters and senior executives to engage in behavior which is beyond the pale of corporate norms and acceptability? How can a company deep from hiring a senior executive who will harm its reputation? Find out the answer to these and other questions on Compliance into the Weeds.

See Matt Kelly’s blog post What Drives Misconduct: The EPA Example

Apr 7, 2018

With the Astros off to a 6-1 start and the Facebook FUBAR continuing, Jay Rosen and myself take a look at some of the top compliance stories over the past week. 

  1. Embraer dodges a shareholder action based on its FCPA violations. Henry Cutter reports in the WSJ Risk and Compliance Journal. Tom considers the decision as a rift in the time space continuum in the FCPA Compliance and Ethics Blog. Kevin LaCroix considers from the more traditional legal angle in the D&O Diary.
  2. Facebook continues to either (1) not get it; (2) throw its users under the bus, and/or generally show it has no idea what it is doing going forward, click here. Mark Zuckerberg will explain it all to Congress. Larry Robinson on Fast Company online lays out what the company need to do. Tom explores the tone at the company in Compliance Week (sub req’d)
  3. What should you ask in an interview of a compliance professional? Maurice Gilbert, founder at Conselium Search gives some great tips in his eBook, Hiring Compliance Officers available at no charge on Corporate Compliance Insights.
  4. Bob Conlin, the CEO at Navex explains why CEO trust is so low. Check out his article here.
  5. What is the SEC whistleblower safe harbor rule? Henry Cutter reports in the WSJ Risk and Compliance Journal.
  6. Mike Volkov puts on an excellent podcast on how to deal with search warrant on the Corruption, Crime and Compliance podcast.
  7. Check out this week’s 5-part podcast series on corporate monitorships with Vin DiCianni and Eric Feldman. It is available on the FCPA Compliance Report, iTunes, Libsyn, YouTube and JDSupra.
  8. Tom announces presales of his next book, the Complete Compliance Handbook, which will be published by Compliance Week in April 2018. It is available for PreSale here.
  9. Jonathan Armstrong will be in Houston on April 10 to put on a half-day GDPR workshop. You can find out more and register at the Greater Houston Business and Ethics Roundtable website, org. Tom will host a breakfast meeting with Jonathan on a UK Bribery Act update. For details and registration contact Tom.
  10. Tom will be leading Convercent Roundtables on using data to drive ethics to the center of business on Houston (April 17) and Dallas (April 18). He will lead discussions on using data to drive ethics into the center of business.
  11. Jay details a webinar hosted by Convercent where AMI SVP Eric Feldman presents a qualitative look on how quickly an ethical scandal can impact a company. To listen, click here

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

Apr 2, 2018

In this episode I visit with Tom Sporkin, partner at Buckley Sandler. Sporkin has a whistleblower practice. He spent some 20+ years at the SEC, ending his tenure at the Chief of the office of Market Intelligence. In this episode I continue my exploration of the implications and fallout from the Supreme Court decision in Digital Realty Trust v. Somers. Sporkin discusses his views on the decision and how the SEC created the regulations around the whistleblower protections under Dodd-Frank.

Sporkin explains the overlap and interplay of Dodd-Frank, SOX and other rights or remedies a whistleblower can avail themselves. He details the steps that a whistleblower needs to take to not only protect themselves from retaliation but also the rights for potential financial redress to whistleblowers. Finally, we discuss the role of whistleblower counsel in conjunction with the SEC’s Office of the Whistleblower to help both protect whistleblowers against retaliation and discrimination but also fulfill the SEC’s role of protecting investors in public companies.

It is a fascinating interview. If you are a potential whistleblower, you certainly need to under the rights and timeline-obligations that you have under federal laws; if you are a Chief Compliance Officer, you need to understand how the Digital Realty Trust decision may impact your compliance program going forward and if you are in a company, you need to understand both the role of the SEC and what rights & obligations your organization has after the Supreme Court decision.

 

Mar 30, 2018

With Opening Day and the Astros raising the WS banner only a couple of days away, Jay and Tom take a look at some of the top compliance stories over the past week.

  1. Kinross Gold Corporation settles SEC FCPA enforcement action for $950,000. Tom discussed the lessons learned from it in the FCPA Compliance Report.
  2. Canada unveils its version of Deferred Prosecution Agreements. Sam Rubenfeld reports in the Wall Street Journal Risk and Compliance Journal.
  3. Did Exxon structure a deal to avoid FCPA liability? Scott Patterson, Bradley Olson and  James V. Grimaldi, reporting  in the Wall Street Journal, look at a deal by Exxon offshore Liberia.
  4. The Caremark decision is now 20 years old. What has been the impact on compliance of this seminal case on the responsibility of Boards for compliance? Donald Langevoort previews his new law review article in the Harvard Law School Forum on Corporate Governanc The full law review article is available here.
  5. Eric Carlson, writing in the FCPA Blog, says to expect more anti-corruption enforcement actions in China going forward.Shell files criminal complaint against former employee for receiving a kickback from alleged bribes paid in Nigeria. Ron Bousso and Libby George report in Reuters. Sarah Kent reports in the W   SJ.
  6. Check out the top new podcast in the compliance field Innovation in Compliance. It is available on the FCPA Compliance Report, iTunes, Libsyn, YouTube and JDSupra.
  7. Tom announces presales of his next book, the Complete Compliance Handbook, which will be published by Compliance Week in April 2018. It is available for PreSale here.
  8. Jonathan Armstrong will be in Houston on April 10 to put on a half-day GDPR workshop. You can find out more and register at the Greater Houston Business and Ethics Roundtable website, org. Jonathan and Tom will put on a Bribery Act Roundtable breakfast on April 12 in Houston. For registration and more information, contact Tom.
  9. Tom will be leading Convercent Roundtables on using data to drive ethics to the center of business in Miami (April 4), Houston (April 17) and Dallas (April 18).
  10. Jay details presentations by his Affiliated Monitors’ colleagues at the SCCE European Compliance and Ethics Institute and the upcoming presentations with Convercent.

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

Mar 28, 2018

In this episode, Matt Kelly and I being an exploration of the Facebook/Cambridge Analytica imbroglio. Today we consider the plight of soon-to-be former Facebook Chief Information Security Officer Alex Stamos who was seemingly retaliated against for his actions to try and bring the data hacking of Facebook to the attention of senior management. Stamos, who reported to the General Counsel, wanted to have a direct reporting line to Facebook senior executives, such as chief operating officer Sheryl Sandberg or CEO Mark Zuckerberg. Not only was this request denied but Stamos has 144 of the 147 employees who work under him transferred out from under his department. Now he is leaving the company although no word on whether he is ‘resigning to pursue other opportunities’.

We consider the culture of the company, with a seeming propensity to circle the wagons and not admit there was anything untoward even through Facebook was long aware of the Russian hacking and data theft by Cambridge Analytica. We discuss the differences in the role of a corporate legal department (defend the company) and the corporate compliance department (prevent, detect and remediate). Matt floats a very unusual trial balloon, that legal should report to compliance.

Mar 26, 2018

In this episode, I visit with Donna Bucella, the President-Compliance at Guidepost Solutions. Guidepost Solutions is well-known in the monitorship realm, but the company has a much wider focus, which Bucella discusses in this podcast. Her background is fascinating with military, civilian and government service. We discuss the compliance aspects to Guidepost Solutions’ work in the areas of cyber-security and tech services where the company provides an integrated suite of technology design, project management, and operational consulting services that balance its clients’ business needs with cost-effective solutions.

The podcast is a fascinating discussion of many of the risk areas anti-corruption compliance professionals are becoming more enmeshed in and areas they are being asked to take on in the corporate risk management process.

For more information on Guidepost Solutions, check out the company’s website by clicking here.

Mar 23, 2018

In the midst of this true madness in the NCAA tournament this year, Jay Rosen and myself take a look at some of the top compliance stories over the past week.

  1. Cambridge Analytica is in a world of trouble after stealing data from Facebook and advising clients to engage in bribery and corruption. See stories in FCPA Blog, good summary of stories by Sam Rubenfeld at WSJ Risk and Compliance Journal, The Guardian reports on what we know so far and Recode summarizes the interplay between Cambridge Analytica and Facebook.
  2. Facebook is not far behind for its tepid response. Zuckerberg responds, reported in the Wall Street Journal, a Whistleblower weighs in, the Washington Post reports that the FTC has opened an investigations, Mark Zuckerberg talks to the New York Times.
  3. In largest whistleblower awards ever, the SEC doles out $83MM to 3 anonymous persons for fraudulent conduct at Merrill-Lynch. Dick Cassin reports in the FCPA Blog, Matt Kelly advises to read the fine print on Radical Compliance and Kevin LaCroix details some interesting points from the award. The award lands the whistleblowers’ attorney, Jordan Thomas on the front page of the NYT.
  4. Catching up on news from the UK: in NYU Compliance and Enforcement Blog considers the first test of Bribery Act’s Adequate Procedures defense, from the WSJ Risk and Compliance Report-(1) Sam Rubenfeld says UK may end Scottish shell companies, (2) Rubenfeld reports that the SFO claws back bribe payment to Chad government official, (3) Mara Lemos Stein reports the Financial Conduct Authority seeks more transparency.
  5. In an unsurprising yet disturbing development, whistleblower retaliation is up. Ben DiPietro reports in the WSJ Risk and Compliance Journal.
  6. Uber Brings in Holder Report Co-Author as Deputy GC, Angela Padilla Out. Stephanie Forshee reports in Corporate Counsel (Sub req’d)
  7. Check out the top new podcast in the compliance field Innovation in Compliance. It is available on the FCPA Compliance Report, iTunes, Libsyn, YouTube and JDSupra.
  8. Tom announces presales of his next book, the Complete Compliance Handbook, which will be published by Compliance Week in April 2018. It is available for PreSale here.
  9. Jonathan Armstrong will be in Houston on April 10 to put on a half-day GDPR workshop. You can find out more and register at the Greater Houston Business and Ethics Roundtable website, org.
  10. Tom will be leading Convercent Roundtables on using data to drive ethics to the center of business in Miami (April 4), Houston (April 17) and Dallas (April 18).
  11. Tom and Everything Compliance panelist Mike Volkov and Matt Kelly named as top contributors in compliance in annual JDSupra Readers 2017-8 Poll. Will Jay take his game up?
  12. Jay details the upcoming presentations by his Affiliated Monitors’ colleagues at the SCCE European Ethics and Compliance Institute and with Convercent.

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

Mar 21, 2018

 

In this episode, Matt Kelly and I take a deep dive into the recent SEC enforcement action against Elizabeth Holmes, the disgraced founder of Theranos, for her massive fraud around the former unicorn. Holmes claimed to have developed a proprietary system of blood testing so that with only one pin-prick of blood over 200 diagnostic tests could be performed. It turned out to be completely smoke and mirrors as the company never came close to developing the technology. In fact, the company and Holmes specifically hid the true nature of the company’s technology from investors using an elaborate deceit.

Holmes was one of the most famous women to come out of Silicon Valley. She founded Theranos, hyped the fraudulent blood testing scam and became for a short time a billionaire. Now all of that is gone, gone, gone. According the SEC Compliant, Holmes agreed to a civil penalty of $500,000, returned some 18.9 million shares that she obtained during the fraud and relinquished her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares and she is banded for 10 years from holding office in a publicly traded company.

We explore the questions surrounding this massive fraud and the penalty assessed by the SEC. Was the fine and penalty enough or should Holmes have been criminally prosecuted? Is there enough money left in Theranos to pay off all those the company defrauded? Where was the Board of Directors in all of this miasma? At what point does a start up with a revolutionary or innovative idea actually have to prove the idea works? Should the SEC regulate private companies which go into the market for capital? Matt and I take a deep dive into these and other questions in this fascinating look at one of the former highest-flying unicorns who fell to other with a resounding thud.

Mar 13, 2018

In this episode, Matt Kelly and I continue our exploration of the fallout from the recent Supreme Court decision in Digital Realty Trust v. Somers in light of the filing by BioRad in its appeal of the whistleblower award to its former General Counsel, Sanford Wadler. Wadler had internally reported allegation of FCPA violations by the company in China to its Board of Directors. Wadler was later terminated and filed suit claiming his termination had been in retaliation for his whistleblowing efforts. The jury agreed with him and he was awarded approximately $11MM in damages, including damages under Dodd-Frank.

Last week, BioRad filed notice in its appeal of the Digital Realty Trust v. Somers decision and asked for approximately $3MM in damages awarded to Wadler be thrown out as they were based on Dodd-Frank. There was no evidence that Wadler has whistleblown to the SEC, although there was evidence he reported as required under SOX. We explore three issues which the case raises:

  1. That employees must go to SEC and not report internally first.
  2. The inherent conflict between corporate legal departments and corporate compliance departments.
  3. Whether companies can require, on pain of termination, employees to report internally first through internal company policy and whether companies would then terminate such internal whistleblowers.

For more information on these issues see Matt Kelly’s blog post Supreme Court Whistleblower Ruling, Already in Play 

See Tom Fox’s blog post Whistleblowers at the Supreme Court-Part II: Impact of the Somers Decision

Mar 12, 2018

In this episode, I visit with Miller & Chevalier Member John Davis on the firm’s FCPA Winter Review 2017. We discuss the key FCPA enforcement actions from 2017 and developments in compliance. Davis identifies four theme’s from Miller’s report including: (1) What if any change did the new administration bring in FCPA enforcement; (2) the uptick in individual enforcement actions under the FCPA; (3) the new FCPA Corporate Enforcement Policy which incorporated elements from the 2016 FCPA Pilot Program and 2017 Evaluation of Corporate Compliance Programs and (4) the large, multi-national anti-corruption enforcement actions which are becoming more normalized.

We they discuss how these trends may continue into 2018 and beyond. The Miller & Chevalier quarterly FCPA report is always one of the most useful review of FCPA and related laws enforcement around. It reviews all the FCPA enforcement actions in the quarter as well as the key international anti-corruption enforcement actions. Also it has some very useful charts and graphics to summarize key trends. It is an invaluable resource for the compliance practitioner. You can check out the FCPA Winter Review 2017 by clicking here.

Mar 9, 2018

In this episode, Jay Rosen and myself take a look at some of the top compliance stories over the past week, including some fury.

  1. Wells Fargo is having its soul investigated by actual nuns. Alistair Gray reports in the Financial Times; Thorton McEnery notes sometimes the Universe is both hilarious and cruel in Dealbreaker; and Bloomberg says the Nuns want to know the root cause of the illegal conduct at Wells Fargo.
  2. BSRG goes into receivership. Tom reports in the FCPA Blog. For the original sordid story see, the piece in the New Yorker in 2013 by Patrick Radden Keefe.
  3. Bill Coffin continues his string of great posts. This week he says your data breach nightmare is only going to get worse in his Compliance Week
  4. Canada to introduce DPAs. Jaclyn Jaeger reports in Compliance Week.
  5. Kobe Steel CEO resigns amid admission of years of fraudulent reports by the company. Henry Cutter reports in the Wall Street Journal Risk and Compliance Journal.
  6. The FCPA declination program will be extended to other areas by the DOJ. See Tom’s piece in the FCPA Compliance Report and Henry Cutter’s piece in the Wall Street Journal.
  7. Mayhem at the Mavericks? Sports Illustrated broke the story of horrific sexual harassment in the Dallas Mavericks front office. Matt Kelly blogged on it in Radical Compliance. Tom and Matt explored it in a podcast on Compliance into the Weeds. Dick Cassin reports that the Mavericks are looking to hire a first ever CCO in the FCPA Blog.
  8. March 6 was the anniversary of the fall of the Alamo. The lads explore what is means for compliance professionals to be seen as the Alamo. Is compliance the last stand or are they simply slaughtered for standing up for their beliefs? Tom considers both perspectives in the FCPA Compliance Report.
  9. Tom and Jonathan Armstrong are back with Episode 3 of Countdown to GDPR. Tom writes about the policies and procedures you need for GDPR in the FCPA Compliance Report.
  10. Tom announces presales of his next book, the Complete Compliance Handbook, which will be published by Compliance Week in April 2018. It is available for PreSale here.

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

 

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