We all know the jokes about lawyers. We have heard them over and over, at parties, with friends, and among colleagues.  Right now, they seem particularly on point. The Valukas Report lays out an ugly picture of in-house counsel at GM. If you have the stomach to read the entire report, it will make you sick and sad for our profession. It is a depressing...

“What we’ve got here is a failure to communicate”—Captain in Cool Hand Luke Sometimes Chief Ethics and Compliance Officers need to zero in on an issue because it is critical to the operation of an ethics and compliance program. I am not suggesting that CECOs should never focus on an issue but I am reluctant to urge micro managing because of the danger of getting...

The Valukas Report to the General Motors Board of Directors Regarding Ignition Switch Recalls is a lengthy report that describes in excruciating detail how GM failed to uncover and remedy significant safety issues relating to an ignition switch used in various GM model cars. It is easy to lose perspective when reading the report but GM’s basic safety breakdown directly led to the death of...

Chief compliance officers are under intense pressure.  They are being watched inside every company to make sure they deliver on their “compliance” program, and outside observers are ready to comment on any misstep or breakdown in corporate compliance. It is a wonder that CCOs can get their job done.  They are pulled in a million directions, given inadequate resources, and held accountable for an unrealistic...

The bedrock of a compliance program is corporate culture.  Let’s all agree to throw away the following often-repeated phrases: ”tone-at-the-top” and “buzz at the bottom.”  I would argue that we replace those trite and meaningless phrases with the all-important one – “culture of ethics.” There is no rational reason to continue segregating culture into distinct levels of the company — top or bottom.   A more...

Corporate boards have been under siege.  If you ask a Board member about the changes in corporate governance, risk and accountability, they roll their eyes and lament that the job of a board member has become more complicated and difficult. Let’s try and look at the experience from their perspective.  Board members usually enjoy focusing on a company’s financial performance and some of the more...

I always enjoy listening to the legal “doomsayers” who love to propound hysterical claims in an effort to gain attention.   It reminds me of little children screaming for attention.  Unfortunately, in the case of lawyers, they tend to wear suits, earn lucrative salaries and are respected in their professional community. The latest fad in this space is a federal judge’s ruling in the Barko v....

I am always wary of definitive “best practices” lists.  By definition, “best practices” vary depending on the size and nature of an organization in any compliance context. This variability is applicable to the financial industry.  AML/BSA compliance can have a dramatic impact on one business but little impact on another business with a different profile. With all those caveats, there are some principles to examine...

With all the attention to Anti-Money Laundering and Bank Secrecy Act enforcement, I thought it would be a good time to review some basic AML ethics and compliance principles. Banks and most financial institutions are very familiar with surrounding regulation and risks.  It is difficult to explain how institutions as large as HSBC, BNP Paribas and others can run into serious enforcement problems.  It is...