What does it take (or not take) to be a con artist and/or a white collar criminal? Do not kid yourself — white collar criminals can be “dangerous,” in that they usually suffer from significant personality disorders. Many are narcissists and sociopaths and are constantly engaging in manipulation, financial schemes, and inflicting harm to victims. We all the know the legendary white collar scandals –...
In another setback last week, after a contentious criminal prosecution, the government dismissed its criminal charges against Federal Express. DOJ indicted Federal Express for drug trafficking relating to shipping of illegal online pharmacy drugs and related money laundering counts. Federal Express, unlike many corporations, decided to fight the charges and fight they did. Federal Express mounted a vigorous pre-trial assault and persuaded Judge Breyer (brother...
Last week was a tough week for the Justice Department’s criminal prosecutors. Before everyone gets out their Yates Memorandum trending claims, it is important to recognize that DOJ’s loss in several high profile cases does not reflect some earth-shattering trend or recent Yates phenomena. DOJ last a series of criminal cases that were indicted or investigated before the Yates Memorandum had hit the ground in...
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...
