We have been getting accountability all wrong in the compliance profession. It’s not a set of tasks – it’s a way of thinking and it has to come from the heart as well as the head. On Accountability: The Heart of Compliance Tom Fox and Sam Silverstein dig into what accountability means to the corporate compliance function and business organizations and most significantly, how to make it an integral part of your culture. In this episode we post the recent Executive Forum on Ethics and Accountability. It focused on effectively expanding the effectiveness of your ethical program, how to use The Accountability Assessment™ to spot deficiencies, and how to build and protect your organization’s ethical culture. Finally how all of this tie directly into the DOJ’s Evaluation of Corporate Compliance Programs.
For more information on Sam Silverstein and his work on accountability, click here.
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As the whole world counts down to the US election, Tom and Jay are back to look at top compliance articles and stories which caught their eye this week.
1. Goldman Sachs settles FCPA enforcement action involving Tom with a five-part series on FCPA Compliance and Ethics Blog, Mike Volkov with a 3-part series on Corruption, Crime and Compliance, Tom and Matt on Compliance into the Weeds and the Everything Compliance gang with their first emergency video podcast.
2. The Beam Suntory FCPA enforcement action. Harry Cassin breaks the story in the FCPA Blog. Matt Kelly provides some lessons in Radical Compliance.
3. What can investigators learn from Wirecard? Llyodette Bai-Marrow in the FCPA Blog.
4. TLI President sentenced to 48 months in prison. Dylan Tokar in the WSJ Risk and Compliance Journal.
5. Why the Exit Interview is such a useful exercise. Jonathan Marks in Board and Fraud.
6. It’s Halloween. What are your (corp) skeletons? Michael Toebe in CCI.
7. Experian to appeal ICO fine. Jaclyn Jaeger in Compliance Week.
8. Channel you inner Sherlock Holmes to determine UBOs. Alia Noor on xpertsleague.com.
9. On the Compliance Podcast Network, on 31 Days to a More Effective Compliance Program, we continue our exploration of compliance for Business Ventures. Monday-Franchisor Liability; Tuesday-Franchisor compliance; Wednesday– Following the money thru distributors; Thursday– Distributor liability; Friday– Why Business Ventures are Different than 3rd Parties. Note 31 Days to a More Effective Compliance Program now has its own iTunes channel. If you want to binge out and listen to only these episodes, click here.
10. Join K2 Intelligence FIN for a November 5 webinar, highlighting scenarios in which investigative due diligence can help uncover areas of risk and opportunity in the wake of COVID-19. Learn more and register here.
11. Virtual book launch for Sending the Elevator Back Down. Thursday, November 5, 4:30 ET. Information 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.
Three enforcement actions which made clear that there were no distinctions between agents and distributors. They were the Smith & Nephew, Inc., Oracle (2012 and 2022) and Eli Lilly and Company. Each of these enforcement actions had different FCPA violations and they each revealed separate steps which a company should take to both prevent and detect FCPA violations in their company.
These three separate bribery schemes call for three different but overlapping responses. The Lilly enforcement action also makes clear the need for internal audit to follow up with ongoing monitoring and auditing. Internal audit can be used to help determine the reasonableness of a commission rate outside the accepted corporate norm. The 2012 & 2022 Oracle enforcement actions demonstrated that Oracle needed to institute the proper controls to prevent its employees at Oracle India from creating and misusing the parked funds in the distributor’s account. The Company needed to audit and compare the distributor’s margin against the end user price to ensure excess margins were not being built into the pricing structure. Smith & Nephew did not perform sufficient due diligence on these distributors nor did they document any. Further, the distributor was domiciled in a location separate and apart, the UK, from the sole location it was designed to deliver products or services into, Greece. This clearly demonstrated that the entities were used for a purpose that the company wished to hide from Greek authorities. While it is true that a distributor might sell products into a country different than its domicile, if the products are going into a single country, this should have raised several Red Flags.
Three Key Takeaways
- Use auditing and monitoring.
- Distributors will be treated the same as other business ventures.
- Robust due diligence must be performed.
Steve Spiegelhalter is the North American Investigations Practice Leader and Managing Director at Alvarez & Marsal. As a former federal prosecutor with the US Department of Justice’s Criminal Division, Fraud Section, and the Foreign Corrupt Practices Act (FCPA) Unit, Steve has intimate experience in investigating complex criminal and civil affairs and implementing compliance programs. He joins Vince Walden to discuss the future of conducting internal investigations.
Steve talks about the improvements GCs and CCOs have made in internal investigations over the last five years. They have evolved their in-house skills and resources. Additionally, they have gotten better at interacting with external counsel to solve matters more efficiently.
COVID-19 has highlighted that foreign corrupt practices and corruption are long-term risks that are becoming more prominent. There has been a rise in fraud issues since the workplace has shifted to remote. Behaviors of malpractice that would have gone unnoticed are now being laid bare.
Resources
Steve Spiegelhalter on LinkedIn
AlvarezandMarsal.com
In today’s edition of Daily Compliance News:
- Another FCPA enforcement action. (DOJ)
- TLI President sentenced after trial. (DOJ Press Release)
- PayPal puts its money where its mouth is. (NYT)
- ICE agents unaware of First Amendment. (WaPo)
In this episode of Across the Board, I visit with Andrea Bonime-Blanc, founder of GEC Risk Advisory. She recently joined the Advisory Board of the Crisp Thinking Group. We visit about the need for compliance expertise on a Board. Some of the highlights include:
- What Crisp is and what products/services they provide?
- What is your role at Crisp?
- We have long urged for a Compliance SME on Boards. Why is this such a critical need?
- Were you brought on to the Board to be the ‘adult in the room’?
- You have another book out, Gloom to Boom. Can you tell us about it? How has it been received, most particularly during the pandemic?
Resources
For more information on Crisp Thinking click here.
For a copy of Andrea’s book Gloom to Boom, click here.
Welcome to the newest addition to the Compliance Podcast Network, Compliance and Coronavirus. In this episode, I am joined by James Anliot, Director of Healthcare Compliance Services at Affiliated Monitors, Inc. He is responsible for evaluating practice operations and developing internal compliance programs for both individual and organizational healthcare clients. We visit about issues around telehealth in the era of Covid-19.
Some of the highlights include:
- How are Telehealth services are delivered?
- How has the evaluation of physician services been changed by Telehealth?
- What is the “physical examination and evaluation” and why is it so important in evaluating the quality of the care provided to the patient?
- What is the role of insurers?
- What has been the response of regulators?
In the Episode, I am joined by Mikhail Reider-Gordon, Managing Director of Institutional Ethics & Integrity at Affiliated Monitors. Mikhail’s areas of expertise include technology, privacy, cybersecurity, IP and accountability in artificial intelligence; the global anti-corruption and anti-money laundering regimes; media & entertainment; biotech and the life sciences; the public sector and international law. She is accustomed to working on extremely sensitive and high-profile matters, both nationally and internationally. In this episode, we explore shell companies in our On the Beach episode.
Some of the highlights include:
- Weekly news wrap-up on Wirecard
- What is the Bundestag investigating? Are they doing anything?
- Were 250 Wirecard employees assigned to the money-laundering team?
- Is a Bundestag inquiry in the works by the EU?
- KPMG enters the story.
- Shell Companies Shell Companies Shell Companies
- Why it might be time for a walk on the beach (and to read On The Beach)
Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley.
The Code of Conduct is kind of a big deal in any Compliance program. It has been referred to as the cornerstone of a Compliance program and for that reason, it’s important to get it right. Well that’s easier said than done when you’re trying to appeal to literally every employee and external stakeholder you have. So we enlisted in some expert help. Andrea Falcione of Rethink Compliance joins us for this two-part series which starts off taking a hard look at re-vamping Codes of Conduct (we assume you’ve already got one in place and aren’t starting from scratch) and the second installment takes a deep dive into Compliance policies.
In the Code episode we canvass considerations from the outset to get your approach right, discuss frequency of re-vamps, how codes have evolved and what marks a modern code in amongst several other nitty gritty points. Yes folks, it’s a packed episode you won’t want to miss.
Have you heard that Lisa and Mary have published a book? Yes, you can get your very own copy of “Sending the Elevator Back Down: What We’ve Learned From Great Women in Compliance” (CCI Press, 2020) on Amazon right now! Enjoyed your copy? Don’t forget to leave a review!
Join the Great Women in Compliance community on LinkedIn here.
