Welcome to the newest addition to the Compliance Podcast Network, Compliance and Coronavirus. In this episode, I am joined by Scott Price. Scott has provided clients with security, assurance, and compliance solutions for nearly 20 years. In this time, he has completed over 2,000 SAS 70/SOC audits and has supported many Global 1000, Fortune 500, and regional companies. In 2009, Scott started A-LIGN to provide partnership to firms around the globe by solving their security and compliance problems. In 2016, Scott was selected to Accounting Today’s Managing Partner Elite, highlighting the leaders of accounting firms who stand out from their peers due to their ability to guide their firms through innovation, development of strong culture, and continued focus on growth.
In this episode, we consider some of the challenges for compliance professionals in the current environment around how Coronavirus is impacting the security and compliance industry; what are the benefits of conducting a remote audit; and what will the compliance landscape look like 6-9 months from now for cyber-risk and cyber-security? We conclude with a look at what might be the “new normal” look like for both clients and compliance firms?
For more information on A-LIGN, check out their website here.
Author: admin
Dan Wager heads Financial Crime Compliance Strategies at LexisNexis Risk Solutions. His global team focuses on identifying market opportunities, merger acquisition opportunities, regulatory developments, and product development in the areas of anti-bribery, anti-corruption, money laundering, sanctions screening, and sanctions enforcement. He joins Tom Fox on this week’s show to chat about the key findings of LexisNexis’ report, The True Cost of Financial Crimes, and its implications for compliance professionals.
Understanding Financial Crime
“One of the things I’m trying to do,” Tom tells Dan, “is bring people like yourself on the podcast to really help the anti-corruption compliance specialist who’s in the commercial corporation understand financial crimes.” Dan comments that LexisNexis has been doing this report for five years but at the regional level. This report, by contrast, is a global roll-up overview, where they are bringing the regional studies together into a global view, to see the true cost as well as challenges and trends facing the industry.
Key Insights
Dan and Tom discuss the key findings from the report, including:
- The true cost of compliance globally is in excess of $180 billion a year.
- Each region has its own compliance risks and issues.
- Non-bank payment providers pose various compliance challenges, in particular for clearing banks.
- The increasing compliance burden has an adverse impact on attracting and retaining talent.
- The proper use of the right technologies can assist in offsetting costs and making better compliance decisions.
A Layered Approach to Compliance
Using a layered approach helps a compliance professional think through the risk management of their compliance program, recognizing that implementing financial crime compliance initiatives can provide broader benefits to their business. Dan explains that the layered approach to compliance starts at the front gate, and it involves using technology to determine whether the person or proposed action poses a compliance risk. “The layered approach means before you spend something on someone or give money to someone or buy something from someone you should have vetted them,” he points out. Tom asks about page 45 of the report. Dan says that it’s about using the right technology for your business’ needs. That is what will reduce labor cost, he points out. “It doesn’t mean that you can hire cheaper labor. It means you have fewer people to accomplish the same compliance because you’re automating and accomplishing through technology much of the rote work.”
Resources
LexisNexis Risk Solutions
Study: The True Cost of Financial Crimes
In today’s edition of Daily Compliance News:
- Six eBay employees indicted for horrific campaign of cyber-stalking. (Boston Globe)
- Al Jaffe retires from Mad Magazine? (NYT)
- GOP scuttles yet another piece of privacy legislation. (WSJ)
- LGBT rights upheld in the workplace. (WSJ)
Beginning with the 2015 Yates Memo, 2016 FCPA Pilot Program, 2017 and 2019 Evaluations of Corporate Compliance Programs, with 2020 Update through to the FCPA Corporate Enforcement Policy; the DOJ has put even more pressure on every CCO, compliance practitioner and indeed company, to get an investigation done quickly, efficiently and, most importantly, right. This is even more true after the U.S. Supreme Court’s decisions in Digital Realty Trust v. Somers, which limited whistleblower protection and benefits to only those whistleblowers who go to the SEC, rather than initially report internally. What do all these documents tell who should be on your investigation team?
As with a decision on bringing in outside counsel to perform a compliance investigation, you will need to consider whether a forensic accountant should be retained as an outside consultant or hired as an employee. One critical reason to bring in an outside professional is so they will be not be governed by management or influenced by potential biases within a company. Lastly is the issue of privilege. If a forensic accountant is not assigned through your legal department or through outside counsel, you can kiss away even the chance of claiming privilege.
Obviously, the GC would be involved to help protect the attorney client privilege if for no other reason. Further, an investigation needs to have compliance involved, to understand what compliance program was in place at the time of the incident in question, what procedures compliance had and understand if this truly was a gap in the compliance function or maybe there was an area within the compliance function that was not operating as prescribed, or maybe it was a little bit weak.
Three key takeaways:
- HR plays a key but often underused role in internal investigations.
- The Board of Directors and senior management have different roles.
- Use your legal department to protect the privilege.
In this episode, I am joined by Ian McDougall, the General Counsel for LexisNexis. He is also the President of the LexisNexis Rule of Law Foundation. McDougall is also the Chair of the Global Marketing Committee, where responsible for Professional Association relationships and responsible for Global Rule of Law development. McDougall has a uniquely wide ranging and high-level experience in the delivery of legal advice to substantial corporations at board level (both as a board member and as adviser to the board). Finally, he has presented to and made speeches at the highest international levels; including the International Bar Association, the General Assembly of the United Nations Comprehensive Test Ban Treaty Organisation, and ministers from various governments internationally. In this podcast, you will learn how and why McDougall is so passionate about the Rule of Law.
Some of the highlights include:
- Why McDougall is so passionate about the Rule of Law.
- What are McDougall’s 4 principles for defining the Rule of Law?
- What is the difference of the Rule by Law and the Rule of Law?
- What are three reasons why McDougall believes the Rule of Law is even more crucial at this point in time?
- How does the Rule of Law lead the discussion around the areas of the profession of Law, Corporate Social Responsibility and Social Entrepreneurship?
Resources
Text of Ian McDougall speech on The Rule of Law to IBA Annual Conference Rule of Law Symposium – Rome 2018.
In today’s edition of Sunday Book Review:
- “Labor, Civil Rights and the Hughes Tool Company”by Michael R. Botson Jr.
- “Race and the Houston Police Department, 1930-1990: A Change Did Come” by Dwight Watson
- “Houston Cougars in the 1960s: Death Threats, the Veer Offense and the Game of the Century”by Robert D. Jacobus
- “A Night of Violence: The Houston Riot of 1917” by Robert V. Haynes
As Trump goes back into hiding in his bunker, the rest of the country continues to reopen. Self-Tom and Jay are back to consider some of the top compliance articles and stories over the past week.
- Final thoughts on the DOJ 2020 Update to the Evaluation of Corporate Compliance Programs. Tom summarizes the highlights on the FCPA Compliance and Ethics Blog. Mike Volkov gives his five top takeaways.
- Want to see examples of ham-fisted leadership. Matt Kelly on Radical Compliance. Tom and Matt take a deep dive in Compliance into the Weeds.
- Why does WFH raise compliance risks? Vera Cherapanova on the FCPA Blog.
- How did Jho Low use Kuwait to continue his fraud? Reporting in the WSJ.
- Common features of corruption and police brutality. Matthew Stephenson opines in GAB.
- How can you sharpen your cyber security? Jim DeLoach in CCI.
- How can you build a listen up culture? Bob Conlin on Navex Global’s Ethics and Compliance Matters
- Managing risk in compliance staffing. Kathryn Reimann on NYU’s Compliance and Enforcement Blog.
- Brian Benczkowski bails the DOJ. Dylan Tokar on the WSJ Risk and Compliance Journal.
- Interested in moving to the CCO chair? Check out my latest podcast series The Compliance Lifewhere I interview one CCO type for a month on their journey to the CCO chair and beyond. In on this month’s edition I visit with Ryan Rabalais. In this Part 2, he details why the corp compliance function can be seen as a Black Box. The Compliance Life is now available on iTunes.
- On Compliance and Coronavirus this week, I feature three podcasts from the folks at K2 Intelligence FIN: Gabe Hidalgo on lessons for financial institutions during the time of Covid-19; Sepideh Rowland on PPP and changing risks for financial institutions; Ray Dookhie joins me to discuss evolving fraud risk during the time of Covid-19. Compliance and Coronavirus is available on iTunes here.
- On the Compliance Podcast Network, this month topic: internal reporting and investigations; all on 31 Days to a More Effective Compliance Program. This week’s offerings: Monday-internal reporting and whistleblowers during layoffs; Tuesday-triage of allegations; Wednesday-the investigation protocol; Thursday– preparing for an investigation; Friday– selection of investigative counsel. Note 31 Days to a More Effective Compliance Program now has its own iTunes channel.
- Join Tom and Jonathan Marks for a webinar on the 2020 Update to the Evaluation of Corporate Compliance Programs. Thursday, June 18 at noon CT. Registration and information available here.
- Join Jay’s AMI colleagues Dionne Lomax and Jesse Caplan for a webinar entitled, “The DOJ’s New Guidance for Antitrust Compliance Programs + Special Considerations During the COVID Pandemic”. This webinar will discuss the U.S. Department of Justice Antitrust Division’s recently announced initiative to encourage corporations to develop and implement effective antitrust compliance programs. Our panel will discuss the new guidance and special considerations during the COVID pandemic and provide practical tips for developing a comprehensive program, including tips on how to handle a federal and/or state antitrust investigations. The event will be held next Tuesday, June 16th, at 12P EST/9A PST. Registration and information can be found 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.
In today’s edition of Daily Compliance News:
- Brother can you spare €12.6MM? (KYC360)
- Pemex suspends contracts. (Houston Chronicle)
- Goldman Sachs lobbied DOJ to back off guilty plea in 1MDB case. (NYT)
- Amazon hit with massive anti-trust lawsuit in EU. (WSJ)
