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This Week in FCPA

Episode 237 – the Impeachment Trial Redux edition


As Trump becomes the only person to have 2 impeachment trials, Tom and Jay are back to look at some of the top compliance articles and stories which caught their eye this week.

  1. Beny Steinmetz found guilty for corruption in Guinea mining concession. Imogen Foulkes in the com. Tom take a deep dive on the FCPA Compliance and Ethics Blog. Part 1-Background, Part 2-the Trial, Part 3-the Vale JV, Part 4-Final Thoughts.
  2. Do compliance officers need a peer review? Dick Cassin explores in the FCPA Blog.
  3. Should you have reps and warranties in your compliance terms and conditions? Bill Steinman considers in the FCPA Blog.
  4. 7 key changes to CA privacy laws. Andrew Burt in Navex Global’s Risk and Compliance Matters.
  5. A Significant ruling on HIPPA out of the 5th David Saunders and Allison Glover in NYU’s Compliance and Enforcement.
  6. Is an increase in SEC enforcement coming? Morgan Lewis lawyers in Harvard Law School Forum on Corporate Goverance.
  7. Why is FCA compliance so critical? Mike Debernardis in CCI.
  8. How to investigate a 60MM document case? Michael Dempsey in the BBC.
  9. On The Compliance Life, Gwen Hassan- Director of Compliance at CNH Industrial is back for her fourth and final episode. In it, Gwen explains her passion around fighting the international scrourge of human trafficking. Check out the episode here.
  10. This month, on 31 Days to a More Effective Compliance Program, I look back over 2020 and set out some of the key enhancements you need to do for your compliance program in 2021. Day 23 | Assessing compliance internal controls; Day 24 | Updates and feedback; Day 25 | CCO authority and independence; Day 26 | the role of compliance in an organization; Day 27 | operationalizing compliance though payroll; Day 28 | Continuous Improvement; Day 29 | Internal Reporting. Note 31 Days to a More Effective Compliance Program now has its own iTunes channel.
  11. A new AMI podcast is out, Integrity Through Compliance. It will have AMI’s expert observations and guidance in the fields of ethics, antitrust, healthcare, government contracting, corporate governance, cybersecurity, construction, telecommunications, consumer protection and more.In this first episode, AMI founder Vin DiCianni visits with AMI MD Jerry Coyne the future of telehealth & home healthcare during a pandemic and beyond. Check it out here.
  12. Join K2 Integrity and the AIBACP for a webinar on February 17—National Defense Authorization Act: AML Compliance Implications and Priorities for the Banking Industry. Information and Registration here.
  13. Compliance Week is accepting nominations for its Excellence in Compliance Award. Submit your nominee here.
  14. Join the Baker Tilly Fraud 1st Annual Fraud and Compliance Summit, Tuesday, Feb 23, 2021, to Thursday, Feb 25, 2021. Details and registration here.

Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.

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Daily Compliance News

January 29, 2021, the Say it ain’t so Bonus edition


In today’s edition of Daily Compliance News:

  • Think corruption is victimless crime, think again. (WSJ)
  • Reg freeze impacts AML reforms. (WSJ)
  • FB to sue Apple, say it ain’t so Joe. (NYT)
  • BaFin sues ex-employee for using inside information to engage in insider trading of Wirecard. (FT)
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31 Days to More Effective Compliance Programs

Day 28 | Pre-acquisition due diligence in mergers and acquisitions


A company that does not perform adequate due diligence prior to a merger or acquisition may face both legal and business risks. Perhaps most commonly, inadequate due diligence can allow a course of bribery to continue – with all the attendant harms to a business’s profitability and reputation, as well as potential civil and criminal liability. While most compliance practitioners have been long aware of the requirement in the post-acquisition context, the 2012 FCPA Guidance focused many compliance practitioners of the need to engage in robust pre-acquisition due diligence.
The 2020 Update made even more clear the need for a robust compliance presence in the pre-acquisition phase. It stated, “A well-designed compliance program should include comprehensive due diligence of any acquisition targets, as well as a process for timely and orderly integration of the acquired entity into existing compliance program structures and internal controls. Pre-M&A due diligence, where possible, enables the acquiring company to evaluate more accurately each target’s value and negotiate for the costs of any corruption or misconduct to be borne by the target. Flawed or incomplete pre- or post-acquisition due diligence and integration can allow misconduct to continue at the target company, causing resulting harm to a business’s profitability and reputation and risking civil and criminal liability.”
There are multiple red flags which could be raised in this process, which might well warrant further investigation. They include if the target has ineffective compliance program elements in their compliance program or if there were frequent breach of policies and procedures. Obviously, a target which is in financial difficulty would bear closer scrutiny. Structurally, if the company did not have a formal ethics and compliance committee at the senior management or Board of Directors’ level, this could present issues. From the CCO perspective, if the position did not have Board or CEO access or if there were not regular reports to the Board, it could present an issue for compliance. Conversely, if there were frequent requests to waive policies, management over-ride of compliance controls or no consistent consequence management for violations; it could present clear red flags for further investigation.
Three key takeaways: 

  1. The results of your pre-acquisition due diligence will inform your post-acquisition integration and remediation going forward.
  2. Periodically review your M&A due diligence protocol.
  3. If red flags appear in pre-acquisition due diligence, they should be cleared.
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Daily Compliance News

January 28, 2021, the $47MM Bonus edition


In today’s edition of Daily Compliance News:

  • Publicis Groupe’s Epsilon to Pay $150 Million to Resolve Customer-Data Case. (WSJ)
  • GE President defends $47MM bonus. (FT)
  • Moderates calling the shots. (CNN)
  • Will Carin Energy seize Indian government assets? (BBC)
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Innovation in Compliance

Integrity Matters: Assessing the Corporate Compliance Climate in 2021- Part 4: Global Trends Impacting Risk & Compliance in 2021


Welcome to this special podcast series, Integrity Matters: Assessing the Corporate Compliance Climate in 2021, sponsored by K2 Integrity. This week I visit with Bob Brenner, Co-Managing Partner and Chief Legal Officer; Snežana Gebauer, Executive Managing Director and head of U.S. Investigations and Risk Advisory, Americas. Over the week, we will consider various regulatory and enforcement issues with the incoming Biden Administration. Topics include assessing the regulatory landscape resulting from the pandemic, what companies can expect from new administration priorities, anti-bribery/anti-corruption issues and enforcement in 2021. In this Part 4, I am joined by Bob Brenner and we consider what companies can expect from the global trends impacting risk and compliance in 2021.
Join us tomorrow as we conclude our five-part series by considering how your company can prepare for what is next.
For more information go to the K2 Integrity website.

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The Walden Pond

Global Compliance Trends with Sam Eastwood of Mayer Brown


 
Sam Eastwood is a litigation partner at Mayer Brown’s Litigation Practice in London and a member of the firm’s White Collar Defense & Compliance practice. He joins Vince Walden on this week’s episode to discuss the risks and trends related to global compliance and data analytics.
 

 
Sam expresses that companies need to disclose more about their compliance programs operations. Transparency into the data analytics itself is a good way to conduct audits, he adds. Data protection and the way data is collected, processed, and transferred is getting more challenging. As such, Sam stresses that the fraud detection process is in need of an upgrade. 
Corruption is a human rights issue. It is important for clients within the compliance field to have an effective human rights compliance program. As things progress, Sam states that human rights due diligence laws are soon to be passed. When these laws are eventually introduced, companies will be expected to conduct human rights due diligence on the impact of their business activities. Monitoring legislative developments and carrying out human rights assessments are two of the ways Sam says that companies can do this.
Resources
Sam Eastwood | LinkedIn
 

Categories
Everything Compliance

Episode 74, Compliance Under the Biden Administration Edition

Welcome to the only roundtable podcast in compliance. Today, we have a quartet of Jonathan Armstrong, Jonathan Marks, Matt Kelly and Mike Volkov for a deep dive into what compliance may look like under the Biden Administration. We end with a veritable mélange of rants and shouts outs.

  1. Jonathan Armstrong joins us from London to consider what the new Administration might mean for the current British PM and his Administration. He rants about the renewed UK lockdown and how idiots are still not getting the need for it.
  1. Matt Kelly considers the Biden Administration appointments at the SEC, CFPB and OCC and how their philosophies on enforcement will impact compliance. Matt rants about the second-class citizenship created when CCOs have to report to GCs.
  1. Jonathan Marks looks at FBI and other enforcement agencies renewed vigor in investigating fraud, particularly around PPP and PPE. Marks shouts out to Amanda Gorman for her stirring poetry at the Biden Inauguration.
  1. Mike Volkov considers the appointments of Merrick Garland to be Attorney General and Lisa Monaco as Biden’s Homeland Security head and how they will work to clean up the disastrous mess left by the prior Administration. Volkov shouts out the Biden Inauguration Celebration and especially the 3 former Presidents remarks.
  1. Tom Fox has a bittersweet shout out to Hank Aaron who passed away last week.

 The members of Everything Compliance are:

  • Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Mike Volkov – One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com
  • Matt Kelly – Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
  • Jonathan Armstrong –is our UK colleague, who is an experienced data privacy/data protection lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com
  • Jonathan Marks is Partner, Firm Practice Leader – Global Forensic, Compliance & Integrity Services at Baker Tilly. Marks can be reached at marks@bakertilly.com

The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.

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The Wirecard Saga

The Revolving Door


Welcome to the latest edition to the Compliance Podcast Network, The Wirecard Saga. In this series, I am joined by Mikhail Reider-Gordon, Managing Director of Institutional Ethics & Integrity at Affiliated Monitors.  In this episode, we take a deep dive into the government officials ensnared in the Wirecard scandal and how the German (and other countries) revolving door between the public and private sector lead to the corridors of corruption.
Some of the highlights include:

  • Austria Arrests Government Officials
  • Ass Aground
  • Extorting Porn Barons
  • Self-Regulation Shortcomings
  • Who Approved These Loans?!
  • Follow the Money
  • Bauer’s Autopsy
  • Less Convincing Answers for Banks
  • Deutsche Bank’s Naughty Boy
  • Chancellery’s Revolving Door
  • Housefrau Brokers Deal in PRC
  • Fritsche Multitasks in DE & AT
  • Moscow Nights with Marsalek and Sobotka
  • Brigadier Builds Contracts
Categories
31 Days to More Effective Compliance Programs

Day 27 | Operationalizing compliance through payroll


One of the areas articulated in the 2020 Update was around payments and payroll. For the both the compliance professional and the corporate payroll function, there is a significant role to play in the operationalization of a corporate compliance program. The 2020 Update was replete with references to payment and its critical nature to any best practices compliance program.  This includes references to payments to foreign officials, payments to third parties and hiding bribes in payments to distributors. The 2020 Update begins with an admonition to stop wasting time on low hanging fruit when there are much higher risks in your business operations.
The role of payroll in compliance is not often considered in operationalizing your compliance program, yet the monies to fund bribes must come from somewhere. Unfortunately, one of those places is out of payroll. All CCOs need to sit down with his or her head of payroll, have them explain the role of payroll, then review the internal controls in place to see how they facilitate the goals of compliance. From that review, you can then determine how to use payroll to help to operationalize your compliance program.
The DOJ has now provided its clearest statement on how it expects a company to actually do compliance going forward. Long gone are the days where the DOJ simply considered the inputs of a written program as sufficient to protect companies from compliance violations. Yet the mandate to operationalize a corporate compliance program drives home the concept that compliance is a business process, which should be administered by the appropriate business unit with the requisite SME. When it comes to following the money, payroll is the most well-suited corporate discipline to provide this first level of oversight and controls.
Three key takeaways:

  1. Payroll can be a key prevent and detect control.
  2. The 2020 Update specified the tying of the corporate compliance function to the corporate payroll function.
  3. Offshore payments remain a key indicator for a red flag.
Categories
Innovation in Compliance

Integrity Matters: Assessing the Corporate Compliance Climate in 2021- Part 3: Anti-Bribery and Anti-Corruption Enforcement in 2021


Welcome to this special podcast series, Integrity Matters: Assessing the Corporate Compliance Climate in 2021, sponsored by K2 Integrity. This week I visit with Bob Brenner, Co-Managing Partner and Chief Legal Officer; Snežana Gebauer, Executive Managing Director and head of U.S. Investigations and Risk Advisory, Americas. Over the week, we will consider various regulatory and enforcement issues with the incoming Biden Administration. Topics include assessing the regulatory landscape resulting from the pandemic, what companies can expect from new administration priorities, anti-bribery/anti-corruption issues and enforcement in 2021. In this Part 3, I am joined by Snežana Gebauer who discusses what companies can expect as priorities from new administration around anti-bribery and anti-corruption.
Join us tomorrow as we examine global trends impacting risk and compliance in 2021.
For more information go to the K2 Integrity website.