Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day, we consider four stories from the business world, including those related to compliance, ethics, risk management, leadership, or general interest, that arerelevant to the compliance professional.
Top stories include:
Heathrow boss ‘slept through’ theMarch fire emergency. (BBC)
United Health says it is ‘cooperating’ after reports of a DOJ criminal investigation. (NYT)
BCG refuses to release the results of the external investigation. (FT)
In today’s rapidly evolving compliance landscape, one principle has become abundantly clear: effective fraud prevention starts at the top. The Economic Crime and Corporate Transparency Act 2023, with its new offense of failure to prevent fraud, has elevated the expectations for senior leadership and boards across large organizations. Fortunately, the UK government has put out a document entitled “Economic Crime and Corporate Transparency Act 2023: Guidance to organisations on the offence of failure to prevent fraud.” (The Guidance). Section 3.1 of the official guidance, titled “Top Level Commitment,” should be required reading for every compliance professional seeking to build a credible, defensible, and sustainable anti-fraud culture. Today, we take a deep dive into what a top-level commitment is.
The Imperative: Leadership’s Role in Preventing Fraud
Section 3.1 places the responsibility for preventing and detecting fraud squarely on those charged with governance, including the Board of Directors, partners, and senior management. This is not simply a perfunctory statement. The Guidance makes it clear: without authentic buy-in and leadership from the very top, even the best-written policies and controls will falter.
A culture of zero tolerance for fraud must be more than a slogan. The board and senior management must actively foster an environment where fraud is not only discouraged but also considered unthinkable, where profit derived from or assisted by fraud is unequivocally rejected.
Visible Commitment: Not Just Words, But Deeds
What does genuine top-level commitment look like? The Guidance offers a clear framework. It is about visible, consistent action that resonates throughout the organization. This includes:
Publicly rejecting fraud, even at the cost of lost business opportunities. Boards and executives must demonstrate that they will walk away from deals if the price compromises their integrity and values.
Explaining the business benefits of a strong anti-fraud posture. Protecting the company’s reputation, building trust with customers and business partners, and ensuring long-term sustainability are tangible, valuable outcomes.
Backing policies and codes of conduct with consequences. There must be clarity about what happens if someone breaches anti-fraud policies—up to and including contractual and disciplinary action.
Acknowledging and endorsing collective anti-fraud efforts. Participation in industry initiatives or trade body actions against fraud demonstrates seriousness of intent.
A leadership statement is only credible if it is backed by real accountability, named roles, and continuous communication.
Governance: Structuring Responsibility for Real Results
Clear governance is the backbone of any fraud prevention framework. Section 3.1 stresses that organizations should define, document, and communicate who is responsible for every aspect of fraud prevention, from risk assessment to whistleblowing, and from detection to disciplinary actions.
Best practice governance includes:
Designated responsibility for horizon scanning, risk assessment, policy development, disciplinary action, whistleblowing, investigation, and ongoing review.
Direct access for compliance leadership to the board or CEO, even if day-to-day reporting is elsewhere. This ensures critical issues don’t get buried in middle management.
Documentation of decisions and actions. Board minutes should capture key compliance decisions, risk reviews, and follow-up actions.
Succession planning for compliance leadership. Governance should account for staff turnover and ensure continuity in anti-fraud efforts, even when key personnel are absent or leave the organization.
In some organizations, the board or senior executives will be personally involved in designing fraud prevention measures; in others, they will delegate this responsibility to the Head of Ethics and Compliance while retaining ultimate accountability. The key is active engagement and oversight.
Commitment to Resources: Funding and Training
Fraud prevention is not a costless endeavor. The guidance is explicit: senior management must allocate a reasonable and proportionate budget for compliance leadership, fraud prevention staff, training, and technology, including due diligence tools and platforms. This budget commitment must be sustained for the long term, not just as a one-off initiative.
Training is equally crucial. Senior management must champion not only initial training but also ongoing refreshers and updates, ensuring that all staff, especially those in high-risk roles, are equipped to identify and prevent fraud. Resilience is key: anti-fraud practices must be maintained even when staff are on vacation, sick leave, or when there is turnover.
Leading by Example: The Tone at the Top
The “tone at the top” is more than a catchphrase; it is the bedrock of ethical culture. Senior managers must embody the standards they expect from the rest of the organization. This means:
Openly challenging rationalizations for fraud. Whether it’s “everyone does it,” “it’s not material,” or “it’s for the good of the business,” these are dangerous myths that must be confronted.
Encouraging early reporting of concerns. Leadership should foster an open culture where staff feel empowered to speak up, no matter how minor the issue may seem. The earlier a problem is raised, the less likely it will snowball into a major scandal.
Making ethics a daily practice, not a quarterly campaign. Whether through regular reminders, integration into performance evaluations, or simply modeling the right behaviors, leaders set the ethical weather for the company.
Communication: Reinforcing the Anti-Fraud Message
Top-level commitment must be communicated consistently and credibly to all key audiences, including employees, contractors, agents, suppliers, and business partners. The guidance recommends tailoring the message for different stakeholders; what resonates with employees may differ from what is relevant for contractors or vendors.
Effective anti-fraud communication should:
Highlight the organization’s commitment to integrity over short-term gains.
Reinforce the real-world consequences of violating anti-fraud policies.
Regularly spotlight examples of ethical leadership, transparency, and collective action against fraud.
The Importance of Whistleblowing
Section 3.1 places significant emphasis on whistleblowing—not only establishing clear channels but also creating a culture where speaking up is encouraged and protected. Senior management should ensure:
There are safe, independent channels for reporting concerns.
Whistleblowers are protected from retaliation.
Reports are acted on quickly and transparently.
A strong whistleblowing culture indicates that leadership is committed to identifying and addressing problems before they become systemic.
The “Why” Behind Top-Level Commitment
Why is all of this so critical? Because fraud is adaptive. It thrives in ambiguity, and it flourishes when leadership is distracted, disinterested, or inconsistent. The Economic Crime and Corporate Transparency Act 2023 raises the stakes: organizations now face not just reputational and commercial damage, but also criminal liability if they cannot demonstrate that their prevention procedures were reasonable and implemented with genuine top-level commitment.
The regulators and prosecutors will look for evidence of this commitment. Are senior managers personally invested? Do they walk the talk? Can they demonstrate, with documentation, that anti-fraud policies are embedded in the organization’s DNA?
Practical Steps for Compliance Professionals
What should compliance professionals do today?
Engage with your board and C-suite. Make sure they understand their personal and collective responsibilities under the Act.
Audit your current governance structures. Identify gaps in accountability, communication, or resource allocation.
Refresh your anti-fraud messaging and training. Ensure it is regular, targeted, and endorsed by top management.
Enhance your whistleblowing framework. Benchmark it against best practices and ensure visible support from leadership.
Document everything. If it’s not written down, it didn’t happen. Ensure that minutes, decisions, and compliance actions are accurately recorded.
Conclusion: Leadership Sets the Standard
Section 3.1 is clear: fraud prevention is not just the job of compliance or internal audit. It is the duty of those at the top. Authentic leadership means investing in people, systems, and culture; communicating a vision of integrity; and never wavering, even when the pressure to bend the rules is immense.
For the modern compliance professional, this is both a challenge and an opportunity. With exemplary leadership, organizations can move beyond reactive compliance and build an enduring culture where ethical conduct is the norm and fraud has no place to hide.
Join us tomorrow, where we will consider a fraud risk assessment.
In this episode, we feature two conversations exploring different frontiers of finance and technology.
In our opening Spotlight, we welcome back Marc Steinberg, professor at Southern Methodist University’s Dedman School of Law and a leading voice in securities and corporate law. His latest book, Corporate Director and Officer Liability: Discretionary, Not Fiduciary (Oxford University Press), challenges the long-standing view that corporate directors and officers should be labeled as “fiduciaries.” Steinberg examines why current liability standards — from the duty of care to the business judgment rule — are too lenient to support that label and why adopting “discretionary” as a neutral, accurate term could restore clarity and investor trust.
In the second segment, we speak with Tram Anh Nguyen, co-founder of the global digital finance education platform CFTE and Chairwoman of Global Women in AI (GWAI). She shares GWAI’s mission to close gender gaps in AI by equipping women across industries with technical knowledge, leadership skills, and mentorship. She discusses GWAI’s mission to empower women across industries to lead in AI innovation by building skills, networks, and visibility. Tram Anh emphasizes the importance of AI literacy, the barriers that hinder women from accessing AI-driven opportunities, and how GWAI facilitates connections among students, professionals, and policymakers to foster an inclusive ecosystem that shapes the future of technology.
Prof. Marc I. Steinberg is a leading expert and prodigious scholar in the field of US securities and corporate law. He is the Rupert and Lillian Radford Chair in Law and Professor of Law at SMU’s Dedman School of Law. He has served as a professor, fellow, or lectured at several other prominent universities, including HKU, the University of Cambridge, Oxford University, King’s College-University of London, Moscow State University, University of Sydney, UCLA, and the University of Pennsylvania.
Earlier in his career, he served as an attorney for the U.S. Securities and Exchange Commission (SEC) in its Division of Enforcement and Office of General Counsel. He has also been retained as an expert witness in several high-profile cases, including Enron, Martha Stewart, Mark Cuban, and the National Prescription Opioid Litigation.
Professor Steinberg is a prolific author of scholarship on US securities law, having authored approximately 150 law review articles and 50 books.
One of his recent books, Rethinking Securities Law (Oxford University Press, 2021), was awarded the Best Law Book in the United States category for 2021 by American Book Fest.
He is also editor-in-chief of The International Lawyer and The Securities Regulation Law Journal, in addition to being a member of The American Law Institute.
Tram Anh Nguyen is the chairwoman of the Global Women in AI (GWAI) group and co-founder of the London-headquartered Centre for Finance, Technology and Entrepreneurship (CFTE). GWAI is best thought of as a global community empowering women to shape the future of artificial intelligence. Its mission is to equip women across industries with the skills, networks, and visibility they need to thrive in an AI-driven world.
From aspiring professionals to seasoned leaders, the GWAI connects a diverse network of innovators, learners, and changemakers. The group offers hands-on learning experiences, leadership development, mentorship opportunities, and access to global forums—all to empower women to lead with purpose, power, and passion.
Before launching the CFTE in 2017, she had spent nearly two decades with Standard Chartered Bank in New York and Dresdner Kleinwort and UBS Wealth Management in London, advising ultra-high-net-worth clients and family offices. A recognized voice when it comes to the ‘future of work,’ Tram Anh partners with governments, central banks, and tier-one institutions worldwide to deliver large-scale reskilling programs.
She has also co-authored the world’s largest Fintech Job Report. As the founder of the Future Skills Forum, under her leadership, the forum has positioned itself as a global convener of thought leaders, policymakers, educators, and industry innovators to drive forward the agenda of human capital transformation in the age of artificial intelligence.
A champion of lifelong learning in digital finance, Tram Anh works closely with governments, regulators, and financial institutions to build future-ready workforces.
She leads initiatives that bring industry and public sector stakeholders together to design large-scale education strategies, develop forward-looking curricula, and ensure the financial sector is equipped to thrive in an AI-driven economy. Under her leadership, CFTE has expanded its global impact, educating over 260,000 alumni in more than 130 countries and collaborating with over 1,000 industry experts to accelerate the transformation of finance through education.
Discussion:
The conversation begins with some background information on Prof. Steinberg’s book. As he puts it, “For centuries, directors and officers have been identified as fiduciaries, bearing a legal and ethical duty to act in the best interests of those they represent. However, the liability standards that ordinarily exist are too lenient to be characterized as fiduciary. This misrepresentation is detrimental to the rule of law, contravenes reasonable investor expectations, and impairs the integrity of the financial markets.”
Therefore, his book, Corporate Director and Officer Liability—‘Discretionaries’ Not Fiduciaries, argues for removing a fiduciary status for corporate directors and officers, instead favoring adoption of a new, more accurate term: “Corporate directors and officers are, instead, ‘discretionaries.’” Such a term, he says, more accurately portrays the status of corporate directors and officers who are held to varying standards of liability depending on the applicable facts and circumstances.”
With such a new model in mind, “the book addresses a wide range of key issues, including the duty of care, the business judgment rule, exculpation statutes, the duty of good faith, interested director transactions, derivative litigation, mergers and acquisitions, and closely held corporations.”
A thought-provoking addition to the field, Prof. Steinberg’s book provides an alternative framework that enhances corporate governance standards while protecting corporate fiduciaries from undue liability exposure.
He shares with Regulatory Ramblings host Ajay Shamdasani what prompted him to write such a book on the topic now, as well as why it is essential to reframe the role of corporate directors and officers as “discretionaries” rather than “fiduciaries,” and what purpose it serves. As Prof. Steinberg acknowledges, it will change the legal analysis and consequently, the responsibilities and liabilities of the parties concerned. He also comments on what he believes his treatise adds to the preexisting scholarship on the matter.
Following that, we chat with Tram Anh about her background and her rationale for creating the GWAI—especially when similar such bodies already seem to exist.
Looking ahead, she sees GWAI going far and believes its best days are yet to come. As she put it, GWAI is where inspiration meets action—creating pathways for women to lead in AI, together.
From its inception, CFTE has been concerned about inclusive education—that those who want to master the vital technologies of tomorrow should be able to do so without fearing the barriers of cost, class, or their current educational, professional, or social standing. Tram Anh said that GWAI’s creation was part of a larger, longer-term goal; the same motivation that compelled her and her partner and co-founder, Huy Nguyen Trieu.
Indeed, Tram Anh believes the CFTE has come a long way, with offices on multiple continents and numerous groups and individuals receptive to its mission of democratizing the learning of fintech and related topics.
Ultimately, she believes that more needs to be done to encourage women to enter STEM fields, enabling them to contribute to the development of AI and Web3.
Regulatory Ramblings podcasts is brought to you by The University of Hong Kong – Reg/Tech Lab, HKU-SCF Fintech Academy, Asia Global Institute, and HKU-edX Professional Certificate in Fintech, with support from the HKU Faculty of Law.
Welcome to “Compliance Tip of the Day,” the podcast that brings you daily insights and practical advice on navigating the ever-evolving landscape of compliance and regulatory requirements. Whether you’re a seasoned compliance professional or just starting your journey, our goal is to provide you with bite-sized, actionable tips to help you stay ahead in your compliance efforts. Join us as we explore the latest industry trends, share best practices, and demystify complex compliance issues to keep your organization on the right side of the law. Tune in daily for your dose of compliance wisdom, and let’s make compliance a little less daunting, one tip at a time.
Today, we consider how you can use your data to crowdsource your risk intelligence.
For more information on this topic, refer to The Compliance Handbook: A Guide to Operationalizing Your Compliance Program, 6th edition, recently released by LexisNexis. It is available here.
Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day, we consider four stories from the business world, including compliance, ethics, risk management, leadership, or general interest, that are relevant to the compliance professional.
A few months ago, we hosted a Special Edition of Everything Compliance, featuring the two primary hosts of the Great Women in Compliance, Lisa Fine and Hemma Lomax, along with our female panelists from Everything Compliance, Karen Woody and Karen Moore, all moderated by Kristy Grant-Hart. The episode was so popular (and the host and guests had so much fun) that everyone involved decided to make it a quarterly event. Today’s episode is hosted by Kristy Grant-Hart, with panelists Karen Moore, Lisa Fine, and Hemma Lomax.
Highlights include:
Lisa Discusses UK Fraud Prevention Law
Hema on the False Claims Act
Karen on Compliance, Rewards, and Incentives
Exploring Behavioral Science in Business
Ethics and Compliance Incentives
AI, Blackmail, and Whistleblowing
Sentient AI and Ethical Dilemmas
Rants and Raves: Compliance and Beyond
The members of this special episode of Everything Compliance (GWIC edition) are:
Karen Moore is an Adjunct Law professor at the Fordham School of Law.
Lisa Fine – is a co-host of the award-winning Great Women in Compliance.
Hemma Lomax– is a co-host of the award-winning Great Women in Compliance.
The host of this special episode of Everything Compliance is Kristy Grant-Hart, VP, Head of Advisory Services at Diligent and co-host of the award-winning podcast 2 Gurus Talk Compliance.
Tom Fox takes a solo turn as Jonathan Armstrong is on assignment. Today, Tom visits with Inge Zwick, Executive Director, Head of Europe, and ESG Lead at Emapta Global, a global outsourcing company.
They discuss the company’s operations, with a particular focus on managing GDPR compliance within the outsourcing framework. They also discuss common misconceptions about outsourcing under the GDPR, risk assessment processes, handling data subject access requests, and integrating compliance into business operations. Zwick also shares insights into how EMAPTA collaborates with clients to ensure compliance and offers advice to business leaders on future-proofing their outsourcing strategies in light of GDPR requirements. Additionally, the discussion explores the integration of ESG initiatives within the company’s operations.
Welcome to a new season of the award-winning Hill Country Authors Podcast, sponsored by Stoney Creek Publishing. In this podcast, Hill Country resident Tom Fox visits with authors who live in and write in and about the Texas Hill Country. In this episode, Tom visits Claudette Fette, an academic from Texas Woman’s University, to talk about her professional background and her work in mental health and community-based practices.
Fette shares the journey that led her to occupational therapy and advocacy, influenced by her son’s struggles with mental illness and addiction. They discuss the development and principles of authentic wraparound services, the importance of multidisciplinary staffing, and the effectiveness of early intervention and preventative mental health support. Fette also touches on the failures of the criminal justice system in dealing with mental health and substance abuse, advocating for restorative justice practices. Additionally, she provides insights into her writing and publishing process for her book, ‘No Saints Here,’ and the ongoing resources she provides through her blog and website.
Key highlights:
Claudette Fette’s Professional and Academic Journey
The Story Behind ‘No Saints Here’
Community-Based Alternatives to Institutionalization
The Importance of Multidisciplinary Staffing
Early Intervention and Preventative Mental Health Support
The introduction of the Economic Crime and Corporate Transparency Act 2023, specifically the offense of failure to prevent fraud (FTPF), takes effect on 1 September 2025. Every US company doing business in the UK or with UK companies must be aware of this law and its implications for them. The jurisdiction is as broad as or even broader than the US Foreign Corrupt Practices Act (FCPA). Corporate compliance professionals are finding themselves in uncharted territory with this new legal framework, requiring a thorough understanding of how this legislation applies and how it can potentially reshape their compliance strategies. Fortunately, the UK government has put out a document entitled “Economic Crime and Corporate Transparency Act 2023: Guidance to organisations on the offence of failure to prevent fraud.” (The Guidance) Over the next several blog posts, I will explore the Guidance and its implications for US-based compliance professionals.
The FTPF introduces corporate criminal liability for large organizations where an associated individual commits fraud, intending to benefit the organization or its clients. This represents a seismic shift for corporate compliance programs because senior management does not need to have ordered or even been aware of the fraud for liability to attach. The very act itself, if proven to benefit the organization or its clients, triggers organizational accountability.
Which companies exactly fall under this statute? The scope applies specifically to large organizations, defined as incorporated entities or partnerships that meet at least two of the following criteria: having more than 250 employees, a turnover exceeding £36 million, or total assets exceeding £18 million. This definition intentionally includes subsidiaries and partnerships within its ambit, casting a wide net for compliance oversight.
The Guidance clearly defines the types of fraud included under the new offense. These base fraud offenses include fraud by false representation, failing to disclose information, abuse of position, false accounting, cheating the public revenue, and fraudulent trading. Organizations must now look beyond mere regulatory adherence to proactive fraud detection and prevention strategies, given the broad spectrum of fraud covered.
The term “associated person” is critical. It extends beyond employees and explicitly includes agents, subsidiaries, or any other persons providing services for or on behalf of the organization. The Guidance notably excludes those merely supplying goods, emphasizing service relationships as the core focus. Understanding the depth and breadth of these associations will require enhanced due diligence processes, rigorous vetting of service providers, and a fundamental re-evaluation of contractual relationships.
Territoriality is another aspect that compliance professionals must closely evaluate. The offense holds a distinct UK nexus; thus, fraud committed by associated persons must either occur in the UK or involve gains or losses realized within UK boundaries. This global perspective on compliance places significant responsibility on UK-based operations with international associations and activities.
Notably, the Guidance outlines scenarios to clarify ambiguities. Consider, for instance, the fraud committed by the payroll department, which diverted employee pension funds to support other internal projects. Here, the payroll head abuses their position of trust to commit fraud intended to benefit the company’s operations. Even if no senior manager or director was aware of the fraud, the company could still face prosecution under this legislation unless it has demonstrably reasonable procedures in place to prevent such fraud.
In terms of defensive mechanisms, the guidance emphasizes the implementation of “reasonable fraud prevention procedures.” This implies that corporations must adopt tailored compliance systems that consider the specific risks associated with their industry, size, and operational territories. Simply having generic fraud detection tools will likely fall short of satisfying this legal standard. Instead, robust, proactive, risk-specific compliance measures, supported by ongoing training and review, become non-negotiable.
The Serious Fraud Office will lead investigations into the FTPF, and the Crown Prosecution Service will handle any courtroom work. An interesting aspect here is the possibility of Deferred Prosecution Agreements (DPAs) in England and Wales, suggesting that organizations may negotiate terms if fraud prevention measures were deemed insufficient initially but have since been significantly improved.
The Guidance emphasizes the importance of corporate cooperation with enforcement authorities. Organizations that demonstrate transparent reporting, proactive fraud detection efforts, and comprehensive preventive frameworks are likely to receive more favorable prosecutorial discretion and may be eligible for DPAs.
From a compliance perspective, understanding intent to benefit is crucial. The Guidance explicitly notes that even indirect or unrealized benefits to the organization, such as a failed attempt to attract investors through false accounting, could trigger liability. The intent to benefit need not be the primary motivation; any incidental or indirect benefit, financial or otherwise, places the organization at risk. Compliance programs must thus anticipate, monitor, and mitigate even seemingly remote risks.
This guidance represents not only a legal shift but also a call for a cultural transformation within corporations. Compliance professionals must foster an environment where ethical practices are embedded, whistleblowers are supported, and robust prevention frameworks are continuously evaluated and strengthened.
Key Highlights for Corporate Compliance Professionals:
Understand the expanded scope of corporate liability and who qualifies as an associated person.
Clearly identify the specific types of fraud covered under the Act.
Implement tailored and robust fraud prevention procedures.
Recognize the importance of territorial considerations for global operations.
Foster a proactive and ethical organizational culture, supported by strong whistleblowing protocols.
The Economic Crime and Corporate Transparency Act 2023 mandates a higher degree of vigilance, proactive risk management, and cultural alignment with anti-fraud values. Organizations failing to adapt swiftly to this evolving compliance landscape risk severe financial penalties, reputational damage, and operational disruption. Forward-looking compliance professionals will seize this moment to reinforce corporate integrity, safeguard organizational reputation, and ensure lasting resilience against fraud.
The Guidance provides an entire section on compliance with the FTPF. Join us tomorrow as we take a deep dive into its prescripts.
Mike and Brent were honored guests on the FCPA Compliance Report podcast with their podfather, Tom Fox, the Voice of Compliance and founder of the Compliance Podcast Network. They discuss the concept of “secondary tariffs” recently threatened by the U.S. as to Russia’s trading partners (00:44), what would such secondary tariffs as to Russia mean, and for whom (03:21), how multinational companies should start thinking through the impact of these potential tariffs (04:37), the need to be very, very, very careful about schemes that seem too good to be true (because they are) (06:03), how risk-based compliance can help multinationals evaluate proposed reconfigurations of procurement flows (09:36), where self-certifications by suppliers might not be sufficient (10:22), and then conclude with a deep dive into what False Claims Act enforcement for tariff evasion might look like and how to mitigate enforcement risks by understanding and leveraging the False Claims Act’s “knowledge” element (13:52).