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Adventures in Compliance

Adventures in Compliance – Episode V, The Empty House

Today, I consider imagination in your compliance program.

The Adventure of the Empty House may well be one of the most famous in the entire Holmes oeuvre. It was the first story in over ten years, although Doyle set the tale only three years after the meeting of Holmes and Moriarty at Reichenbach Falls. Returned from touring the world, Watson and Holmes have an emotional reunion (at least for Watson) and then begin to tackle a locked room murder. This leads to Holmes being in jeopardy and putting a mannequin in his window to draw an attempted assassination attempt by Colonel Sebastian Moran, a henchman of Dr. Moriarty. Moran uses an air rifle which makes the murder and attempted murder all the more sinister.

  1. Every DPA and NPA mandates, “The Company will conduct periodic reviews and testing of its anti-corruption compliance code, policies, and procedures designed to evaluate and improve their effectiveness in preventing and detecting violations of anti-corruption laws and the Company’s anti-corruption code, policies, and procedures, taking into account relevant developments in the field and evolving international and industry standards.”[Emphasis supplied]. This means that the DOJ expects imagination in your compliance program to keep up with evolving international and industry standards.
  2. This means you should begin with a strategy for your compliance program. This means creating a compliance program that will create value for customers, i.e., employees, third parties and customers; show how the company will capture that compliance value going forward and finally which types of compliance imagination to pursue.
  3. A good strategy will promote alignment among diverse groups in a company, help to clarify objectives and priorities and guide your focus on those objectives. It can also be modified as necessary and with sufficient feedback.
  4. there must not only be sufficient resources allocated but management must also incentivize the business units to proceed with implementing the imaginations.
  5. You must recognize that your compliance program will have to be innovative. Start with a strategy, that has senior management buy-in and support, then move to implement. Finally use data in a feedback loop to fine tune your imaginations. That is the bottom line for imagination in compliance.
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Daily Compliance News

Daily Compliance News: March 15, 2019-the all-NYT edition

MARCH 15, 2019 BY TOM FOX


In today’s edition of Daily Compliance News:

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Daily Compliance News

Daily Compliance News: March 14, 2019-the ethics premium edition

MARCH 14, 2019 BY TOM FOX


In today’s edition of Daily Compliance News:

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Adventures in Compliance

Adventures in Compliance –Episode IV: The Six Napoleons

In this episode, I consider the theme of mentoring in compliance.
In the story The Adventure of the Six Napoleons, Inspector Lestrade says to Holmes, “Well,” said Lestrade, “I’ve seen you handle a good many cases, Mr. Holmes, but I don’t know that I ever knew a more workmanlike one than that. We’re not jealous of you at Scotland Yard. No sir, we are very proud of you, and if you come down to-morrow, there’s not a man […] who wouldn’t be glad to shake your hand.” This comment provides insights into how Holmes is viewed by other law enforcement officers; Holmes is a sort of living legend and the other officers respect his skills.
The matter involved the theft of jewelry as Inspector Lestrade of Scotland Yard brings Holmes a seemingly trivial problem about a man who shatters plaster busts of Napoleon. One was shattered in Morse Hudson’s shop, and two others, sold by Hudson to a Dr. Barnicot, were smashed after the doctor’s house and branch office had been burgled. Nothing else was taken in any of the break-ins. It turns out that the thief had stolen several pieces of jewelry and then hid them in the Napoleonic busts. The thief, having been released from prison on an unrelated offense, was tracking down the busts in which he had placed the jewels for hiding, breaking them open and reclaiming his purloined property.
What are some of the ways that you might mentor a younger or less senior compliance professional? I think there are several ways suggested by Conan Doyle as epitomized by the statement by Lestrade and his relationship with Holmes and Watson.
1. Passion- CCOs and seasoned compliance professionals tend to be passionate about compliance even if (like myself) they have a legal background and came to compliance from a corporate legal department. You should work to transmit that passion to others you are mentoring.
2. Developing Networks-Introduce your mentees to others in your organization, so that they can be exposed to different leadership styles and see how such leadership styles work in various areas and with different constituencies.
3. Develop Purpose-This can be aided through reflection, introspection and ability to change as a leader. Moreover, rather than influencing others through individual speeches or stories, the everyday connections between a compliance professional’s sense of purpose and the compliance vision can work to form an indelible impression about the importance of compliance to an organization.
4. Next Generation of Compliance-it is equally important that you communicate that to your mentee as it is certainly important that each generation of compliance leaders be fit for the future and be committed to continuous improvement going forward.
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Everything Compliance

Everything Compliance-Episode 43, the Cohen Testifies edition-Part 2

Welcome to the only roundtable podcast in compliance. This episode is the conclusion of a special two-part episode. Today, in Episode 43 Jonathan Armstrong and Matt Kelly weigh in on issues that are on their collective minds. Last week, in Episode 42 Mike Volkov and Jay Rosen sounded off. Shout outs (and no rants) followed Part 1 in Episode 42.

  1. This week, Jonathan Armstrong discusses the UK Serious Fraud Office’s conclusion of its this week, Matt Kelly considers the continued taunting tweets from Elon Musk, the SEC’s request for a federal court to hold Musk in contempt from his prior SEC settlement over the ‘funding secured’ tweet and what all this may mean for the SEC going forward.
  2. This week, Matt Kelly considers the continued taunting tweets from Elon Musk, the SEC’s request for a federal court to hold Musk in contempt from his prior SEC settlement over the ‘funding secured’ tweet and what all this may mean for the SEC going forward.
  1. Last week Mike Volkov used the Cohen testimony to the House Oversight Committee to explain the process of Congressional oversight, including how a company or witness is called to testify, the testimony preparation process and the testimony process.
  1. Last week, Jay Rosen talked about the DOJ focus on new industries for FCPA investigations including Major League Baseball teams and universities and colleges.

The members of the Everything Compliance panelist 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– Rounding out the panel is our UK colleague, who is an experienced lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com

The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Compliance Evangelist. Everything Compliance is a part of the Compliance Podcast Network.
For additional reading see: Cordery Compliance client alert Rolls Royce Case Sends a Strong Signal

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Adventures in Compliance

Adventures in Compliance: Episode III: The Priory School

Today, I consider the Adventure of the Priory School and the themes of criminality and compliance.

In the story The Adventure of the Priory School, Watson meets a character, Reuben Hayes, who  believes to be the most “self-evident villain” he has ever seen. The tale revolves around the disappearance of a Duke’s son who is kidnapped by the Duke’s illegitimate son, James Wilder, who has in turn hired that most evil person Hayes to kidnap the lad. In pulling off the crime, Hayes had killed the lad’s tutor, one Heidegger, who had gone off in search of the boy. Holmes resolves the matter, while Hayes swings for his crime, the illegitimate son, Wilder is packed off to Australia.
This story raises three key issues for a compliance program.

  1. Rarely to employees set out to engage in criminal activity so robust internal controls are imperative.
  2. Compliance practitioners need to study fraud examiners to understand the indicia of fraud and corruption.
  3. As compliance professionals also be objective and skeptical.
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Compliance Into the Weeds

Compliance into the Weeds: Episode 114-Lessons on Internal Control Overrides

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode, Matt Kelly (the coolest guy in compliance) and I take a deep dive into the recent Bankrate DOJ enforcement action in which the company garnered a NPA and for which it paid a total penalty of $28.5 million. We feature a discussion of internal control overrides.

Some of the highlights include:

  • What are the background facts of the matter?
  • Why should you never name a slush fund “Ed’s Cushion?
  • What is the difference between management over-ride of internal controls and abuse of management control override?
  • Why is robust accounting required when there is a single source of data?
  • What is the straight line from internal controls and accounting to the Board and the audit committee?
  • Where was the Audit Committee?

For additional reading see Matt’s blog post Bankrate pays $28.5 million in fraud case on Radical Compliance.

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Daily Compliance News

Daily Compliance News: March 13, 2019-the Back to School edition

MARCH 13, 2019 BY TOM FOX


In today’s edition of Daily Compliance News:

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Adventures in Compliance

Adventures in Compliance: The Abbey Grange

Today, I consider The Adventure of the Abbey Grange.

In the story The Adventure of the Abbey Grange, Holmes feels something is just not right about the story told by Lady Mary Brackenstall regarding the death of her step-father Sir Eustace Brackenstall. Holmes’ largest concern turns on the contents of three wine glasses, one of which contains beeswing and the other two do not. It turns out that Sir Eustace was killed by a companion of Lady Mary, which Holmes uncovers. However, Holmes has an adaptability for justice when the situation demands it, stating, “Once or twice in my career I feel that I have done more harm by my discovery of the criminal than ever he had done by his crime.” Satisfied the actions of the criminal and his accomplice (Lady Mary) were both warranted and just; Holmes does not report his findings to the local police. Klinger dryly noted, “his sympathies may have overridden his judgement: Many scholars believe that Holmes lets himself be fooled by a villainess clever than he credited.”
This story provide two key points for any best practices compliance program.

  1. Institutional Fairness through the Fair Process Doctrine, which mandates that the process itself is fair and impartial.
  2. Institutional Justice which means more than simply fair and equitable treatment; it requires employees concerns, once raised, be listened to and addressed, all without the fear of retaliation. Moreover there will be a consistency of both discipline and incentives.
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Daily Compliance News

Daily Compliance News: March 12, 2019-the loonshot edition

MARCH 12, 2019 BY TOM FOX


In today’s edition of Daily Compliance News: