Tagged: internal controls

Episode 226 — A Deep Dive into KT Corp’s SEC Settlement for FCPA Violations

The SEC announced the first FCPA enforcement action in 2022. South Korean telecommunications company, KT Corporation, agreed to pay $6.3 million to settle FCPA violations. As part of the settlement, KT Corp. agreed to pay $3.5 million in civil penalties and $2.8 million in disgorgement. KT Corp. is South Korea’s largest telecommunications company.  KT Corp. violated the FCPA’s books and records and internal accounting controls provisions...

KT Corp. Settles SEC FCPA Case for $6.3 Million (Part I of III)

The SEC announced its first FCPA enforcement action in 2022. South Korean telecommunications company, KT Corporation, agreed to pay $6.3 million to settle FCPA violations.  As part of the settlement, KT Corp. agreed to pay $3.5 million in civil penalties and $2.8 million in disgorgement. KT Corp. is South Korea’s largest telecommunications company.  KT Corp. American Depositary Shares are traded on the New York Stock...

Building an ESG Structure and Program (Part II of III)

Investor demand for companies to provide robust and transparent ESG information is growing quickly.  Investors understand that companies have to develop effective strategies to address ESG risks.  The impact on shareholder price is evident – stakeholders are demanding that companies devote time and attention to ESG issues.  Companies have to respond to this demand. Government regulators are quickly pushing the ESG movement. The European Commission...

WPP SEC FCPA Enforcement Action: Lessons Learned (Part III of III)

The SEC’s FCPA enforcement action against WPP presents a number of important lessons learned, ranging from third-party risk management, properly responding to employee complaints and red flags, and failure to integrate acquisition targets into existing compliance programs.  At bottom, WPP and its subsidiaries lacked any culture of compliance.  While it is easy to cite all the deficiencies in the WPP subsidiaries, such a focus misses...

Spring Cleaning: Time to Review Your Internal Controls

There are a lot of so-called “dirty secrets” in the corporate governance world.  Not the tawdry kind that appear to follow controversial politicians – I mean in the world of internal controls. I would wager that most companies cannot even identify all of the policies, procedures and controls that have been created during the life of the company.  Some exist in what I call the...

Citigroup Fined $400 Million by Banking Regulators for Risk and Compliance Control Deficiencies

Banking regulators, the Office of Comptroller of the Currency and the Federal Reserve, recently collected a $400 million civil penalty against Citigroup for long-standing deficiencies in its enterprise risk management, compliance controls and overall banking practices. The Consent Order is Here. The aggressive enforcement action was the result of Citigroup’s continuing deficiencies in its operations, risk oversight and management practices.  The OCC cited Citigroup for...

DOJ Cryptocurrency Guidance Outlines Enforcement Partnerships (Part II of II)

Matt Stankiewicz continues with this two-part posting on DOJ’s cryptocurrency guidance. Matt can be reached at [email protected] DOJ’s Cyber Digital Task Force’s report, “Cryptocurrency: An Enforcement Framework,” provides a comprehensive on the growing partnerships between DOJ and other offices within the executive branch.  We’ve seen the expansion of these partnerships in other legal areas, and the continued advancement of these relationships continues to build an impressive...

Lessons Learned from the Goldman Sachs FCPA Enforcement Settlement (Part III of III)

Goldman Sachs has a new leadership role – unfortunately, it is for corruption.  It would be a serious mistake to characterize or describe the Goldman corruption scheme as the result of a few, bad actors.  Instead, Goldman suffered this scandal because of a culture and a weak set of controls crafted to promote business with little regard for compliance. The lessons learned from this massive...

Goldman Sachs’ Lucrative and Wide-Ranging Corrupt Scheme (Part II of III)

Goldman Sachs now sits atop all charts with the largest US FCPA bribery penalty, totaling approximately $2.9 billion.  The second largest is Ericsson’s 2019 FCPA settlement for $1 billion.  There is a reason that Goldman “earned” this distinction.  The bribery scheme and controls and compliance failures are repugnant and pervasive.  Goldman’s corruption scheme was built on stealing funds from the 1MDB account that was intended...

Revised FCPA Guidance: Effective Compliance Program and Internal Controls (Part V of V)

The initial FCPA Guidance included valuable compliance program guidance keyed to the heading, “Hallmarks of an Effective Compliance Program.”  Issued in 2012, the outline of an effective compliance program was an important statement of policy. The Revised FCPA Guidance includes additional information, some of which reflect recent changes made to the Evaluation of Corporate Compliance Programs.  The Revised FCPA Guidance includes important statements on internal...