The Justice Department recently read through the United States Code and discovered something important — a statute that authorizes the government to issue administrative subpoenas to build massive civil fraud cases that carry huge penalties. For some reason, the Justice Department never used the statute until recently as a weapon against companies in the financial industry. The statute was adopted in 1989 during the savings...

The Justice Department has a penchant for disclosure – they tell you what they are going to do in advance and then they do it. Companies have tried to claim they were “shocked” or “surprised” by the Justice Department’s actions but their claims have a hollow ring to them. For example, in 2009, the Justice Department told the pharmaceutical and medical device companies they were...

Many companies do not realize the importance of creating a “Speak Up” culture and how to deal with whistleblowers. Too many companies say they want to hear about problems but when employees raise the issues they become defensive. This is particularly true when dealing with whistleblowers. The natural response to a whistleblower is to deny any claims of wrongdoing or misconduct. After denial, companies tend...

Chief Compliance Officers have to recognize one immutable fact – if a company does not make money, compliance does not matter. I know this is hard to fathom but a company’s purpose is to make money. The issue boils down to an important question – how does the company want to make money? CCOs cannot sit back and say yes to this strategy and no...

Recently, Attorney General Holder and DAAG Marshall Miller from the Criminal Division delivered important speeches (See Holder Here and Miller Here) on the Justice Department’s initiative to increase individual criminal prosecutions. The initiative was mainly political – the Department claimed that legislation was needed for one part of the proposal. The policy change announced by the Department was not really much of a change from...

Cynics can easily dismiss FinCEN’s August 11, 2014 Advisory on Promoting a Culture of Compliance (Here). In fact, FinCEN’s Advisory contains several important messages, which need to be emphasized. FinCen’s motivation for releasing the Advisory is clear – FinCEN is frustrated by the systemic breakdowns in compliance underscored in recent enforcement actions against financial institutions, including HSBC, BNP Paribas and others. It is apparent to...

The purpose of a due diligence system is not to identify and prevent hiring of a third-party who will commit bribery. To the contrary, no one can predict with accuracy who will commit bribery, unless they truly have mind-reading capabilities. Instead, the purpose of a due diligence program is to build a documentary record that can protect the company from an enforcement action under the...

Sometimes the tea leaves are wrong; sometimes the prognosticators do not know what they are talking about; and sometimes nothing has changed. So, folks in the FCPA world are asking, where are all the FCPA enforcement cases? Sure, we have had some big cases come down this year: Alcoa, Marubeni, and Hewlett-Packard. But the list of ongoing investigations and expected settlements, which usually are preceded...

Companies are worried more and more about sanctions compliance. As the number and complexity of sanctions grow, depending on the twists and turns of our foreign policy, companies are whipsawed in the area of sanctions compliance. The Treasury Department’s Office of Foreign Asset Control tries to keep everyone informed and is often available for consultations. It has a hard job. OFAC expects a lot from...

As my readers know, The Kreller Group is a sponsor of my blog.  The Kreller Group provides corporate investigative services. The Kreller Group has started a bi-monthly blog. Kreller’s first posting on its blog — “Instrumentality” Defined for FCPA Purposes– is available here. Happy Reading.