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The SEC's New Target: Independent Directors

The SEC's New Target: Independent Directors

In the past year, the SEC has brought two enforcement actions against independent directors at two publicly traded companies. Historically, the SEC has not targeted public company directors, but  will do so only when the directors “knowingly permit or facilitate” securities violations. The message from the SEC to independent directors is clear — take your position seriously, closely monitor and manage the company’s activities, or face serious enforcement exposure. Independent...

Reaping What You Sow

Reaping What You Sow

Companies react differently to a set of risks.  In response to the new FCPA enforcement push, some companies have continued with business as usual.  Others have stopped to assess their compliance program, assessed the risk and taken action to shore up their potential risks and exposures. What is surprising is how many companies have chosen to ignore the problem and continue on with business as...

Internal Investigations and Special Committees

Internal Investigations and Special Committees

Too many practitioners blindly adhere to well-known internal investigation protocols instead of asking practical questions of whether such procedures are actually needed.  It is easy to follow the prescribed steps.  But sometimes lawyers need to think outside the box and ask the hard questions, especially when it comes to the appointment of special committees. In certain situations an independent board committee may be needed.  One situation which...

Let's Get Real: Assessing Enforcement Risks

Let's Get Real: Assessing Enforcement Risks

I don’t want to make the wrong mistake — Yogi Berra Sometimes the hysteria gets out of control. Lawyers, government enforcers and commentators spreading the word on the Internet seem to fan the flames of excitement. Let’s all take a deep breath and carefully examine the facts. There is no doubt that the Justice Department and the SEC are increasing enforcement of the FCPA. (A...

AML Compliance and Convergence

AML Compliance and Convergence

Sometimes we lose perspective. Anti-corruption compliance practitioners act as if they are inventing new and innovative concepts. I do not mean any disrespect but anti-corruption compliance programs build on compliance concepts that have been applied in many different situations, especially in the areas of banking and finance, securities, health care, and international trade. My colleague Howard Sklar (Here) writes eloquently about the convergence of compliance...

What Exactly are Accounting Controls?

What Exactly are Accounting Controls?

Let’s all confess – let’s all tell the truth about one issue. Who can define in simple terms what “accounting controls” actually are? We all know what a bribe looks like and smells like. But when it comes to accounting controls, eyes glaze over, speakers mumble and speak quickly, typically turning to the next slide in a seminar presentation. So let’s take a moment and...

The Tenaris Settlement: No Big Deal

The Tenaris Settlement: No Big Deal

Contrary to public opinion and the blizzard of client alerts, the Tenaris settlement — which was touted as the SEC’s first use of a Deferred Prosecution Agreement — was not such a great deal.  In fact, it was a bad deal.  In addition, the SEC’s first use of a DPA is not a significant development since its usual settlements do not require the party to admit...

Squaring Compliance with the UK Bribery Act and the FCPA

Squaring Compliance with the UK Bribery Act and the FCPA

We are now in a new era – companies now have to comply with the UK Bribery Act and the FCPA. Lawyers are pitching everyone they can – people on the street corners, strangers at parties, everywhere – to hire them to make sure they comply with both the Bribery Act and the FCPA. But really what has to be done? Where are the real...

Navigating the Minefield of the SEC Whistleblower Program

Navigating the Minefield of the SEC Whistleblower Program

Companies are appropriately concerned about additional enforcement actions from SEC whistleblowers. The SEC recently issued its whistleblower rules. The new rules provide for a bounty or award to eligible whistleblowers who provide: “original information;” concerning a violation of federal securities laws; which results in a successful (judicial, administrative or related) enforcement action resulting in a fine or penalty (including disgorgement) of at least $1 million....

Contracts and Anti-Corruption Compliance

Contracts and Anti-Corruption Compliance

A company’s commitment to anti-corruption compliance can be quickly tested by examining its contracting practices and its use of anti-corruption provisions. If anti-corruption compliance is a priority, the company’s contracts will include basic protections. As more and more companies try to improve their anti-corruption compliance programs, this is an area which is relatively easy to change. Contract “templates” are a “dirty” concept. It is fine...