Sometimes people operate with blinders. I don’t mean to suggest that people deliberately put blinders on to ignore issues – they sort of just grow into a person’s personality. John Lennon said its best – “Living is easy with eyes closed.” The same applies to people who fail to listen. Whether deliberate or not, people avoid what they do not want to hear. There are...
If you trace the path of an FCPA violation inside an organization, at a minimum, you will see a path of lost opportunities, oversights and omissions. If you see anything different, you may be looking at a deliberate scheme involving complicity or active steps by senior management to a bribery scheme. Assuming we are looking at a situation where senior management and the board failed...
The SEC likes to reorganize, refocus and reenergize. In the last ten years, the SEC has continued to reinvent itself. Whether it has been effective or not, is still up for questioning. Some have questioned if the SEC’s initiatives and reorganization have diverted it from monitoring bread-and-butter issues, such as financial fraud, particularly in the accounting area. The SEC’s new chairwoman, Mary Jo White, has...
Webinar: Internal Investigations — Soup to Nuts March 11, 2014, 12 Noon EST SIGN UP HERE More and more companies need to conduct internal investigations as an important strategy to protect the company against serious government investigations. Not all internal investigations have to be conducted in the same way. The steps needed to conduct an effective internal investigation will vary depending on the nature...
Some people are gluttons for punishment. We all know people in our professional and personal lives who repeatedly end up in trouble. Even when they escape some serious consequence or problem, they inevitably bring about more trouble. I have written about JP Morgan and its continuing compliance nightmare; its resounding compliance failures; and its unwillingness to acknowledge its own responsibility for much of its own...
If you want to know how well an ethics and compliance program is doing, the best indicator is to review the communications between the Chief Compliance Officer and the Board of Directors, usually the Audit Committee. There are four critical questions that need to be asked: 1. How often does the CCO report to the Audit/Compliance Committee? 2. Does the CCO report to the Board...
Target’s consumer data breach was massive in scope and impact – 70 million consumers had their payment information hacked/stolen, along with other personal information. Federal and state regulators are now picking through the morass to assign blame, responsibility and extract penalties and promises of reforms and improvements. Recent press reports have revealed that Target’s senior management had been warned internally about vulnerabilities in its payment...
With the end of the Avon case fast approaching, the expected settlement of over $100 million includes some important lessons learned for companies in the middle of internal investigations and negotiations with the government. The most recent lesson learned for companies under investigation is to avoid public negotiations with the government. It is always a no win proposition and typically results in a greater loss....
The Justice Department and the SEC continue the drumbeat encouraging companies to voluntarily disclose potential FCPA violations. Of course, the reason for their position is obvious – they want to know about every violation, no matter what size and to what extent. If I were still a prosecutor, I would say the same thing. However, there is a lot more nuance to the issue, especially...
The SEC knows that it has broad enforcement authority. In the FCPA arena, the SEC has civil authority over bribes, but more importantly, enforcement authority over books and records and internal controls. It is this latter concept – “internal controls” which can be stretched and used against companies and individuals in some pretty bizarre ways. Relying on the authority of an internal controls investigation, the...
