Large companies have the resources and the incentive to implement risk management systems.  With the increase in compliance by medium and small-sized companies, chief compliance officers and internal auditors are developing and implementing risk management systems.  I have never been a fan of complicating or confusing compliance and risk management.  After all, risk management naturally belongs in the compliance program functions.  Creating a whole new...

The growing global battle against corruption is finding increasing influence by promoting the link between corruption and human rights.  International organizations are pushing the idea that corruption is antithetical to primary rights, such as political and civil rights, but to so-called “secondary” socio-economic rights which derive from economic opportunity, fair distribution of wealth, and related concepts. The corrupt management of public resources restricts the ability...

Corporate boards are under increasing government and shareholder scrutiny.  The government is climbing the corporate ladder by prosecuting senior executives for civil and criminal violations.  It is only a matter of time until the government will find the right set of facts to try to prosecute a Chairman, or Committee Chair, for a criminal violation. The Dodd-Frank Act increased shareholders’ ability to hold corporate directors...

In the face of unprecedented enforcement risks, Chief Executive Officers are embracing the Chief Compliance Officer. CEOs recognize that they need CCOs to keep the company out of trouble.  General Counsels are still available and important to address legal issues to ensure compliance, but CEOs recognize that CCOs can keep the company out of any trouble.  As a result, more CCOs are reporting directly to...

Pharmaceutical and medical device manufacturers (as well as group purchasing organizations “GPOs”) have a major compliance challenge ahead — the Physician Payment Sunshine Act regulations.  The Sunshine Act requires drug and device manufacturers and GPOs to report to HHS/CMS any “payment or other transfer of value” to physicians and teaching hospitals. The Payment Sunshine Act reporting is scheduled to start on March 31, 2014, for...

We have all watched the familiar scene on Capitol Hill – the latest public scandal like officials from the Internal Revenue Service are dragged up to Capitol Hill to appear before a Committee, raise their right hands, take the oath and then assert their Fifth Amendment right against self-incrimination.  Senators and Congresspersons make comments on the scandal, vilify the witnesses, and promise a thorough Congressional...

The internet is filled with articles written by lawyers, consultants and government officials on when a company should disclose a potential FCPA violation or a government FCPA investigation.  It is not an easy question and lawyers often disagree on when a matter is “material” for a publicly-traded company. The disclosure has major ramifications for a company.  I am amazed at how quickly the plaintiff’s bar...

Several years ago, Canada was regularly cited for its lack of commitment to anti-corruption enforcement.  Canada got the message and it ramped up its anti-corruption program. The Royal Canadian Mounted Police dedicated additional resources to enforcement, and they have been busy.  They are conducting a major anti-corruption investigation against SNC-Lavilin, which appears to be the largest anti-corruption case brought by the Canadians.  SNC-Lavilin has suffered...

Let’s start with a few basic assumptions – we all know that third parties are often the most significant risk for corruption.  Of course, a company’s own sales staff can be a significant risk, just as much as a third-party.  However, most companies recognize that they have a greater ability to control the actions of their sales staff than their third parties. Knowing that your...

The story of “The Boy Who Cried Wolf” applies with full force to the securities industry and the FCPA.  Since 2010, FCPA practitioners have been crying out about FCPA risks in the securities industry. First, in 2010, it was the SEC letters issued to various investment banks, private equity and hedge funds.  The SEC was concerned about anti-corruption compliance and interactions with sovereign wealth funds...