The press continues to focus attention on dysfunctional corporate boards and scandals resulting from poor board supervision and performance. It is particularly distressing to see these issues arising after so many reforms have been instituted over the last two decades. Some of these criticisms have been fair and some are just not true. Many boards have just plain failed to guide strategy effectively, oversee risk...
The private equity industry has been taking it on the chin. First, the Dodd-Frank bill imposed a number of new regulatory requirements on the private equity industry, including the requirement that fund managers register with the SEC by March 30, 2012 under the Investment Advisers Act. Second, the SEC has been focusing a number of enforcement actions on private equity managers, especially in the area...
It has been proven over and over again that the emperor isn’t wearing any clothes, but most people don’t want to look at a naked emperor – Frank Zappa Compliance does not mean just checking off a box and continuing business as usual. All too often, small and mid-size companies, private and public, are adopting cookie-cutter compliance programs and moving on to the next project. ...
Drug and device companies have a lot to worry about these days. Not only have they been targeted for FCPA enforcement actions, but they continue to be investigated and prosecuted by the Justice Department and HHS/FDA for “off-label” marketing of their products. DOJ has collected significant fines against companies, convicted individual officers, and employed aggressive policies to charge senior managers who have no knowledge of...
In-House counsel and corporate compliance officers dodge bullets everyday as they stare down the barrels of aggressive prosecutors, regulators, civil litigants, whistleblowers, disgruntled employees and shareholders prodded by trial attorneys to file derivative suits at the drop of a hat. In the face of all of these risks, internal investigations have become commonplace and a standard defensive tactic for a company to regain some leverage,...
Crime does not pay – a trite saying, but in the world of bribery, it is certainly true. Everyone always assumes that paying a bribe always leads to a direct benefit. But is that assumption accurate? A recent article, S.Y. Cheung, R. Rau, A. Stouraitis, Which Firms Benefit from Bribes, and By How much? Evidence from Corruption Cases Worldwide, Social Science Research Network, June 30,...
Former federal judge Stanley Sporkin is one of my heroes. Yes, I am biased because as an AUSA in Washington, D.C. I tried several cases before him, and in private practice, I have collaborated with him on many projects. My admiration, however, extends back to events surrounding the enactment of the FCPA. Judge Sporkin has told the story many times but it is a story...
The Haiti Telco case stands as the Justice Department’s crown jewel of individual prosecutions. Judge Jose Martinez sentenced Joel Esquenazi to a 15-year sentence (180 months) and co-defendant Carlo Rodriguez to 7 years (84 months). Last year, Judge Martinez sentenced two other defendants, Juan Diaz, and Robert Antoine, to 57 and 48 months respectively. Judge Martinez has now imposed the longest, and the third, sixth...
To give you an idea of the impact of the SEC’s Whistleblower program, my good friend former federal judge Stanley Sporkin spent an entire day with senior management of a large global company to discuss the implications of the new program for the business’ global operations. To put it mildly, the SEC’s whistleblower program creates significant risks for companies. Perhaps the most difficult area for...
As my cousin always tells me, “Mike, you have a profound grasp of the obvious.” When it comes to figuring out what enforcement priorities of the Justice Department and the SEC, it is not very hard. In fact, Justice Department and SEC officials are usually very open about their priorities and where they are heading. Aside from their statements, the second most important clue is...
