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.
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.
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”
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:
Those which fall short have the following characteristics:
For LRN Corporation’s 2018 Program Effectiveness Report go to: http://pages.lrn.com/2018-program-effectiveness-report.
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.
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.
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
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:
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
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.
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.
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.
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:
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
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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
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.
In this episode, Jay Rosen and myself take a look at some of the top compliance stories over the past week, including some fury.
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.
In this episode, Matt Kelly and I explore the recent revelations of systemic sexual harassment and abuse present in the front office of the Dallas Mavericks. The allegations were not lodged against owner Mark Cuban but against his former team CEO, Terdema Ussery, who was CEO of the Mavericks from 1997 to 2015. The story was broken by Sports Illustrated in a stinging expose last month. Cuban claims the first he heard about these allegations were when the SI writers, Jon Wertheim and Jessica Luther contact him for comment on their piece.
Matt writing in his blog post Dallas Mavericks Scramble on Compliance noted the story had the three hallmarks we have seen from recent #MeToo scandals involving top CEOs. First, these organizations have unchecked senior executives — charismatic, larger-than-life figures who dazzle their peers and superiors, which leaves them in excellent position to abuse subordinates. Second, the organizations have flawed reporting mechanisms that don’t send allegations of misconduct to people empowered to do something about them. Third, the organizations allow a culture of protection to fester.
All of this led to years of harassment and physical abuse by members of the Mavericks front office. Some women in the article said it was safer in the player’s locker room, where the players were gentlemen. They contrasted it with the Animal House atmosphere of the team’s front office. Owner Mark Cuban has certainly said all of the right things since the story broke. He has even posted a job opening for the team’s first Chief Compliance Officer. You can apply here.
The sordid story is yet one more in a stinging line of unethical and illegal acts that a company’s management allowed to fester for year. It also points how compliance is assuming a greater importance to help a company prevent, detect and remediate nefarious conduct.
In this episode, Jay Rosen and myself take a look at some of the top compliance stories over the past week as we celebrate Texas Independence Day.
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.
In this episode, Matt Kelly and I take a deep dive into the implications flowing from the Supreme Court’s decision last week in the Digital Realty Trust v. Somers decision. Matt initiated a ‘tweetstorm’ in articulating his thoughts on the effects of the decision, including its effect on corporations, Chief Compliance Officers, corporate compliance functions and the Securities and Exchange Commission.
We consider what possible remedies Congress to engage into to help fix the Dodd-Frank Whistleblower protections and remedies to support employees who want to report internally and still be protected from discrimination and harassment. We consider whether corporate legal departments will now use this decision to root out and cudgel employees who report actions they believe are securities law violations. Finally we consider the potential negative impact of this decision light of the requirement for self-disclosure under the new FCPA Corporate Enforcement Policy.
For more on the Digital Realty Trust v. Somers decision, see the following:
Matt Kelly’s piece 16 Tweets About One Whistleblower Ruling
Tom Fox’s pieces Whistleblowers at the Supreme Court: Part I - Supreme Court Decision in Somers
Whistleblowers at the Supreme Court: Part II - Impact of the Somers Decision
In this episode, Jay Rosen and myself take a look at some of the top compliance stories over the past week, including inquiring into where are the chickens in England.