Category: General

Internal Accounting Controls – The Framework for Enforcement (Part II of IV)

Internal Accounting Controls – The Framework for Enforcement (Part II of IV)

When you review the actual law surrounding books and records and internal controls, you wonder to yourself what took the Justice Department and the SEC so long to discover the full power of the provisions. My explanation for this is pretty basic – when you have companies’ self-disclosing bribery violations, along with books and records violations, there is no need to develop ” “new” enforcement...

Internal Controls Enforcement (Part I of IV)

Internal Controls Enforcement (Part I of IV)

I was recently inspired by Tom Fox’s excellent writings on the COSO 2013 framework, and his examination of internal controls issues – see here, here, and here. Today, I begin my own series on internal controls but from a slightly different perspective. The Justice Department and the SEC are evolving FCPA enforcement strategies and theories. The SEC’s evolution is not so significant but its realization...

DPAs and “Reforming” Corporate Criminal Liability

DPAs and “Reforming” Corporate Criminal Liability

The controversy surrounding Deferred Prosecution Agreements (“DPAs”) and Non- Prosecution Agreements (“NPAs”) continues to boil. In response to continuing criticism that the Justice Department is using DPAs and NPAs to coddle or let companies off the hook, the Justice Department has been channeling former President Regan’s famous speech in Berlin when he told Mr. Gorbachev to “tear down” the Berlin Wall. Criminal Division AAG Caldwell...

Corporate Branding and Ethics and Compliance Charters and Policies

Corporate Branding and Ethics and Compliance Charters and Policies

There is a lot written on the value of symbols in political and public relations campaigns. My favorite President, Franklin Roosevelt, was a master at using symbols to communicate powerful ideas to the public. Ronald Reagan later adopted many similar approaches to influence public opinion. A company operates in much the same way, especially when it comes to ethics and compliance. In many respects, a...

Compliance Program Effectiveness Requires Accountability

Compliance Program Effectiveness Requires Accountability

A compliance program requires accountability. You can have ethics and you can have compliance policies, procedures and all the bells and whistles, but someone has to be accountable. Without it, a compliance program will just float along, waiting for the next catastrophe to hit. It is hard to watch an ethics and compliance program that is adrift. My nature is to face issues, make decisions...

The Importance of Organizational Justice

The Importance of Organizational Justice

A company is its own world.  A culture of ethics and compliance cannot exist without organizational justice.  If company managers and employees perceive that the internal justice system does not work, the company will be unable to foster the critical values of integrity and trust.  The company’s culture will become stale, distrust and fear will grow, and ultimately serious misconduct is more likely to occur....

Ethics and Compliance, Not Compliance and Ethics

Ethics and Compliance, Not Compliance and Ethics

I have several pet peeves in the ethics and compliance space (who knows, maybe in the personal space as well but we are all reluctant to acknowledge those except to our loved ones). I know this sounds petty but hear me out. If you look at older healthcare compliance resource documents put out by the government and industry groups you see it — references to...

Commerzbank: Remediation Under the Government Hammer and Microscope (Part III of III)

Commerzbank: Remediation Under the Government Hammer and Microscope (Part III of III)

The Commerzbank bank case provides a chilling story of a systemic breakdown in compliance, and the far-reaching consequences of such a breakdown.  Even in the context of a systemic breakdown, there are valuable lessons to be learned. The first and most striking question is why did Commerzbank get a DPA at all?  BNP Paribas was forced to plead guilty and Commerzbank was given a DPA....

Commerzbank’s Compliance Catastrophe — Flouting Sanctions and BSA/AML Laws (Part II of III)

Commerzbank’s Compliance Catastrophe — Flouting Sanctions and BSA/AML Laws (Part II of III)

Sometimes a picture is very clear but legal words and concepts are proffered in an attempt to disguise and even deceive.  As set forth in the factual statements outlined by the government, and agreed to by Commerzbank, it is evident that Commerzbank had no  culture of ethics and compliance.  Instead, Commerzbank was committed, strategically and operationally, to circumventing and evading US sanctions and BSA/AML laws....

Commerzbank’s Settlement — The Government’s Frustration Boils Over (Part I of III)

Commerzbank’s Settlement — The Government’s Frustration Boils Over (Part I of III)

Global banks are caught in US prosecutor’s cross hairs.  Not only do they have to worry about basic AML compliance and enforcement, they now have major risks in sanctions compliance.  For some inexplicable reasons, global banks appear to have committed themselves to circumvent and evade US sanctions.  It is hard to justify how foreign banks reached this point but they are now paying dearly for...