The compliance profession faces many challenges. Some are more important than others. When it comes to evaluating performance, or measuring compliance programs, the profession has a steep uphill climb. Unfortunately, measuring compliance programs and defining what an “effective” program is an issue that requires extensive research and analysis. Justice Potter Stewart’s famous words defining “obscenity” – “I know it when I see it,” just will...

Compliance officers are, by definition, goal driven. They are high achievers and expect to succeed. So what. You may say – we all know that. Compliance officers are not the most patient group of people. They want to see change, improvement and action. Patience is not in their blood, nor is it their middle name(s). Unless a CCO is directed by the board or the...

DOJ’s FCPA Unit knows what they are doing. In the immediate weeks after the release of the FCPA Pilot Program, DOJ publicly released two declination letters for Akamai Technologies and Nortek, Inc. and the SEC announced disgorgement settlements of $671 thousand and $321 thousand, respectively. These two actions, however, will not solve DOJ’s bigger problem – the FCPA Pilot Program needed to offer a bigger...

Economics is extremely useful as a form of employment for economists – John Kenneth Galbraith I always enjoy economists and the rigor of economic analysis. It has a logic all its own. Economic theory reveals the power of incentives and disincentives. Many critics of economic theory fail to see how it applies to real life. I disagree with that narrow view. We operate in accordance...

Just like the ups and downs of the business cycle, SEC enforcement of accounting fraud cases follow an up and down trend as well. For example, during the financial crisis, SEC enforcement of accounting fraud cases took a back seat to enforcement actions surrounding disclosure and conflicts of interest in relation to the financial meltdown. The SEC, in the last two years, has returned to...

In response to aggressive FCPA enforcement and recurring problems with third parties, companies have spent substantial resources and time to design and implement comprehensive ethics and compliance programs. A key part of this effort was to implement robust due diligence programs to screen and identify potential risks created by third party intermediaries. Hui Chen, DOJ Compliance Counsel, called 2015 “The Year of Due Diligence.” Many...

Never argue with stupid people, they will drag you down to their level and then beat you with experience. – Mark Twain If only Mark Twain were alive today, he would have many opportunities to articulate his wisdom, especially when it comes to politicians. Not to say that the compliance field is as important as politics (or would have been a good target), but I...

Perhaps the most positive and important aspect of the FCPA Pilot Program was the announcement of forward-looking and innovative remediation requirements for corporate compliance programs. As an aside, DOJ’s FCPA Pilot Program was a disappointment and failed to deliver meaningful incentives for companies to self-disclose FCPA violations to the Justice Department. The difference between 25, 50 and 75 percent from the bottom of the sentencing...

A number of companies have adopted the requirement that a new Chief Compliance Office come from the ranks of former federal prosecutors. I am not sure exactly why companies have adopted this requirement. Perhaps company leaders think this will give the company an advantage when dealing with the Justice Department or the SEC. With full disclosure here, I admit my bias in favor of federal...