A corporate scandal does not occur overnight. (Thank you Bob Dylan). A CEO does not begin the day telling him or herself that today is the day to begin the Ponzi scheme or complex fraud. It is hard to imagine but corporate...more
When you look at the core of several major financial scandals, it is easy to point to problems with sales incentives and corporate culture. A company can rapidly grow due to the extraordinary performance of a company’s sales...more
I have written extensively about the new and hot business trend – environmental, social and governance programs (“ESG”). The luster surrounding ESG has been a significant business trend and priority. Like any new trend, the...more
4/30/2021
/ Business Strategies ,
Capital Investments ,
Corporate Governance ,
Corporate Social Responsibility ,
Disclosure Requirements ,
Environmental Social & Governance (ESG) ,
Internal Controls ,
Investment Management ,
Policies and Procedures ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Sustainability
Compliance understanding of business processes is a critical part of understanding internal controls and a company’s risk profile. Compliance officers are adept in identifying and assessing risks. In doing so, a compliance...more
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....more
Deutsche Bank’s ethics and compliance function faces numerous challenges. Deutsche Bank has a storied record of scandals, government enforcement actions and failures to abide by prior deferred prosecution agreements (DPAs)....more
1/27/2021
/ Bribery ,
Compliance ,
Compliance Management Systems ,
Corporate Culture ,
Corruption ,
Deutsche Bank ,
Enforcement Actions ,
Ethics ,
Failure to Comply ,
Foreign Corrupt Practices Act (FCPA) ,
Fraud ,
Internal Controls ,
Spoofing ,
White Collar Crimes
In 2020, the Justice Department did not insist on the appointment of any independent compliance monitors. The year before, in 2019, DOJ insisted on the appointment of three independent corporate monitors – MTS...more
The internal controls provision in the FCPA statute has broad application to a variety of situations beyond foreign bribery. The Securities and Exchange Commission knows full well the power of the internal controls provision...more
12/16/2020
/ Compliance ,
Corporate Sales Transactions ,
Failure To Disclose ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Controls ,
Negotiations ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Settlement Agreements ,
Share Buybacks ,
Stock Repurchases
It is always interesting to watch the flow of risk management trends, particularly as they impact ethics and compliance issues. Financial companies have been the target of regulatory enforcement actions for risk management...more
Banking regulators have been flexing their muscles. With the coming Biden Administration, this may portend the beginning of a new, enforcement wave. Some have suggested that banks are resolving these cases before a more...more
12/4/2020
/ Biden Administration ,
CFTC ,
Corporate Misconduct ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Internal Controls ,
JPMorgan Chase ,
OCC ,
Regulatory Violations ,
Securities and Exchange Commission (SEC) ,
White Collar Crimes
Here is another obvious point – internal controls are intended to ensure compliance with relevant policies and procedures. Internal controls are not just for show, or not just limited to financial reporting. A compliance...more
Companies have to implement a sanctions compliance program (SCP). When I use the term SCP, I mean much more than just having one employee screen a customer before a shipment is sent. Too many companies are behind the 8-ball...more
Companies have had over one year to review and implement a sanctions compliance guidance program. This last year, however, has been difficult (to say the least) given the COVID-19 pandemic....more
The Beam Suntory case is yet another example of a failure of internal and external auditors, and legal and compliance professionals. Reviewing cases involves a focus on how and why a compliance failure occurred....more
Beam Suntory, a global producer and distributor of distilled beverages, settled its FCPA case with DOJ for $19.5 million for bribes paid in India.
The DOJ settlement follows an SEC FCPA settlement for $8 million announced...more
11/9/2020
/ Anti-Bribery ,
Books & Records ,
Bribery ,
Compliance ,
Corporate Counsel ,
Corruption ,
Deferred Prosecution Agreements ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
India ,
Internal Controls ,
Sales & Distribution Agreements ,
Securities and Exchange Commission (SEC) ,
White Collar Crimes ,
Wine & Alcohol
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...more
Shortly before announcing its comprehensive FCPA settlement with DOJ and the SEC, Pilgrim’s Pride agreed with the Justice Department’s Antitrust Division to plead guilty to price-fixing in the chicken processing industry....more
10/26/2020
/ Bribery ,
Cartels ,
Compliance ,
Corruption ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Controls ,
Meat Processing Plants ,
Price-Fixing ,
Securities and Exchange Commission (SEC) ,
White Collar Crimes
The SEC settled with J&F Investmentos (“J&F”) for approximately $27 million. Unlike the DOJ settlement, the SEC included JBS and Joseley and Wesley Batista in its enforcement action. The factual predicate for the settlement...more
10/21/2020
/ American Depository Receipts (ADRs) ,
Bribery ,
Compliance ,
Corruption ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Controls ,
Meat Processing Plants ,
Securities and Exchange Commission (SEC) ,
White Collar Crimes
In the wake of the International Institute of Auditors recent proclamation of a revised and controversial Three Lines of Defense Model, I thought it would be helpful to underscore the importance of the Internal Audit and...more
Corporate governance and compliance is not as hard as everyone tries to make it. Much of management theory, risk management, and theories surrounding corporate operations is intuitive.
...more
It is perhaps fitting that we are coming up on the one-year anniversary of the Business Roundtable’s Restatement of Corporate Purposes, which was signed by 181 corporate leaders and widely-praised for its expansion of...more
World Acceptance Corporation (“WAC”), a US-based consumer loan company, agreed to pay the SEC $21.7 million for FCPA violations in Mexico. WAC’s cited violations covered the full gamut of FCPA violations, including bribery...more
8/11/2020
/ Anti-Corruption ,
Books & Records ,
Bribery ,
Compliance ,
Corporate Counsel ,
Corruption ,
Enforcement Actions ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Controls ,
Mexico ,
Popular ,
Regulatory Violations ,
Securities and Exchange Commission (SEC) ,
Settlement Agreements ,
White Collar Crimes
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...more
At the outset, Novartis is “lucky” – the settlement is relatively positive, despite its 2016 SEC enforcement action in China. Given Novartis weak culture of compliance (if anything, a better description may be a culture of...more
7/1/2020
/ Bribery ,
Compliance ,
Corruption ,
Department of Justice (DOJ) ,
Foreign Corrupt Practices Act (FCPA) ,
Internal Controls ,
Life Sciences ,
Novartis ,
Pharmaceutical Industry ,
Popular ,
Prescription Drugs ,
Securities and Exchange Commission (SEC) ,
Senior Managers ,
Settlement ,
White Collar Crimes
The NAVEX Global Report is based on 2019 data before the pandemic occurred. Nonetheless, the insights are helpful and provide important insights that can be applied in a post-pandemic time....more