Companies implementing due diligence programs face a number of challenges. It is hard enough to identify all of a company’s third-party intermediaries – agents, distributors, customs and logistics representatives, nominees, and professionals, just to name a few. Getting your arms around these third parties to make sure they are subject to due diligence, and monitored and audited can be difficult. Risk-ranking formulas can be used...

The GM debacle over its handling of the ignition switch defect continues. GM’s CEO Mary Barra and the rest of GM’s leadership just do not seem to be getting the message. It is not unusual for C-Suite executives to lead from an ivory tower. In the face of a dramatic governance breakdown, GM has failed to take extraordinary steps to demonstrate that it understands the...

Chief Compliance Officers who lament the challenges of their jobs should be thankful they are not in charge of compliance for higher education institutions. The culture of compliance has extended into many high-risk areas but one area where compliance is catching up is higher education. Universities and colleges face a myriad of regulatory requirements, many of which are imposed by federal and state governments in...

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...

Webinar: Tuesday, October 28, 2014, 12 Noon EST Anti-Corruption Compliance for Small and Mid-Sized Companies Sign Up Here Global companies are implementing anti-corruption policies and procedures. Many of these companies have an “abundance” of resources in comparison to small and mid-sized companies. For non-Fortune 500 global companies, anti-corruption compliance can present challenging circumstances and decisions on allocating limited compliance resources. These small companies have to...

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...