Films of Val Lewton: Part 2 – The Cat People and Controls

Thomas Fox - Compliance Evangelist
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I interrupt my exploration of the new OFAC Framework as it’s the second Friday in October and I am continuing my HorrorFest month. I usually call it Monster Movie Fest but this year I am celebrating the films of Val Lewton who really worked more broadly in the horror genre, rather than the types of films I have previously paid homage to from Universal Pictures. Today, I take a deeper look into Lewton’s first film The Cat People.

The film starred Simone Simon who plays Irena, a woman from Serbia living in New York City, who believes she is descended from a long dead race of cat people from her ancient village. She is a newly wed and refuses to sleep with her husband because she fears that she will transform into a panther if aroused to passion. When her husband, works a little bit too long with a female co-worker, Alice; Irena becomes insanely jealous, stalking Alice to her home. This stalking creates two of Lewton’s most famous scenes where he uses shadows and suggestion to create some of the greatest tension I have ever seen in a horror film.

The first is the scene in which Irena is following Alice through Central Park. The audience expects Irena to turn into a panther at any moment and attack. At the most tense point, when the camera focuses on Alice’s confused and terrified face, the silence is shattered by what sounds like a hissing panther – but is just a city bus pulling up to a bus stop. This technique has been used many times since. Any scene in which tension is dissipated by a shock of startlement, is a termed a “Lewton Bus”. The second occurs when Alice takes a swim at her apartment after the bus scene. Alice is stalked by an animal never shown on camera only by its shadow on the water, walls and ceiling. Alice jumps into the pool, using the water to keep the creature at bay. When Alice screams for help, Irena turns on the lights and claims to be looking for Oliver. Alice emerges, wondering if she had imagined the whole thing, until she finds her robe torn to shreds.

Roger Ebert said of The Cat People it “is constructed almost entirely out of fear. There wasn’t a budget for much of anything else. It exists on eight or nine sets, the running time is only 73 minutes, it has few special effects, there are no major stars, the violence is implied or dreaded but not much seen…; it inspired 10 more macabre titles from Lewton’s production unit and was copied all over Hollywood — because it was scary, and because it was cheap. What was hard to copy was its artistry.” He ended his piece with the following, “It gets under your skin.” There is not much of a greater compliment for a horror movie.

I thought about the sad story of Irena and the fact she had no friends when I was recently studying the Great Courses series of lectures, entitled Crashes and Crisis: Lessons form a History of Financial Disasters, hosted by Professor Connel Fullenkamp and his lecture around rogue traders, Jérôme Kerviel, whose unauthorized trading cost the French bank Société Générale (Soc Gen) more than $6 billion, and Nick Leeson, whose trading bankrupted Baring Brothers.

What I found fascinating about both men was they had worked in, or in Leeson’s case actually headed, the business unit’s risk management teams which oversaw trading operations. In Kerviel’s case this allowed him to have great insight into when red flags would be raised, how they would be investigated and how he manipulated the entire process. In other words, how he could circumvent the internal controls in place to monitor trading. In Leeson’s case it was even more stunning as he was the head of both trading and risk management at the Singapore office of Baring’s. From this position he simply overrode the internal controls so that no red flags were raised from his trading patterns.

Equally interesting was the definition of internal controls as here is a new one for all you compliance professionals – vacation. Kerviel never took a vacation. As Soc Gen was a French company it had generous (by US standards) vacation benefits, yet Kerviel never took a vacation for if he had done so another trader would have taken over his trading book during the pendency of his vacation and his illegal trading scheme would have been exposed.

As a compliance professional have you ever assessed whether who at your company has not taken annual leave in one, two or three years? It may be a discussion you might want to have, particularly around employees in high-risk Foreign Corrupt Practices Act (FCPA) position or even those in high-risk fraud positions.

What about the internal control of time, as the time you receive a request for payment or wire transfer instructions. If you receive something which looks suspicious on Friday at 4 PM EDT, you should probably wait until the next business day (Monday) as the banks will be closed and you cannot confirm accounts or other basic information. But what if you get a similar request on Wednesday at 4 PM EDT for wire payment into a country whose weekend is Thursday/Friday. Or you receive similar instructions at 4 PM Thursday to wire money into a country whose banking system is shut down as their weekend is Friday/Saturday.

The common thread from The Cat People through Kerviel and Lesson is there are always controls in place to stop people from engaging in bribery and corruption. If someone circumvents or overrides them, there should be a compensating control. Yet even those can fail. In both Kerviel and Leeson’s cases, numerous people had to look the other way to allow those frauds to continue for so long. If a region, business unit or salesperson brings in significant revenue over multiple years; it may well bear another look at your controls.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

© Thomas Fox - Compliance Evangelist

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