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Principled Podcast

Season 10 Episode 4 | Handle with Care: ChatGPT and Generative AI Risk

What you’ll learn on this podcast episode

ChatGPT and other generative AI tools have caused a sensation in the marketplace. Some are heralding AI as the best innovation to come along since the internet, while others are fearful of its unforeseen, large-scale impact. For the E&C practitioner, what are the major risks and mitigation strategies that need to be in place? On this episode of LRN’s Principled Podcast, host Susan Divers explores the current and evolving risk landscape surrounding ChatGPT and generative AI with Jonathan Armstrong, a partner at the legal compliance firm Cordery. 

Guest: Jonathan Armstrong

Jonathan Armstrong – Grayscale

Jonathan Armstrong is an experienced lawyer based in London with a concentration on compliance and technology. His practice includes advising multinational companies and their counsel on risk and compliance across Europe. Cordery gives legal and compliance advice to household name corporations on prevention, training, and cure—including internal investigations and dealing with regulatory authorities. 

Jonathan has handled legal matters in more than 60 countries involving cybersecurity and ransomware, investigations of various shapes and sizes, bribery and corruption, corporate governance, ethics code implementation, reputation, supply chain, ESG, and global privacy policies. Jonathan has been particularly active in advising multi-national corporations on their response to the UK Bribery Act 2010 and its inter-relationship with the US Foreign Corrupt Practices Act (FCPA).  

Jonathan is a co-author of LexisNexis’ definitive work on technology law, “Managing Risk: Technology & Communications.”  He is a frequent broadcaster for the BBC and appeared on BBC News 24 as the studio guest on the Walport Review. In addition to being a lawyer, Jonathan is a Fellow of The Chartered Institute of Marketing. He has spoken at conferences in the US, Japan, Canada, China, Brazil, Singapore, Vietnam, the Middle East, and across Europe. 

Jonathan qualified as a lawyer in the UK in 1991 and has focused on technology and risk and governance matters for more than 20 years. He is regarded as a leading expert in compliance matters. Jonathan has been selected as one of the Thomson Reuters stand-out lawyers for 2023 —an honor bestowed on him every year since the survey began. In April 2017, Thomson Reuters listed Jonathan as the 6th most influential figure in risk, compliance and fintech in the UK. In 2016 Jonathan was ranked as the 14th most influential figure in data security worldwide by Onalytica.  In 2019 Jonathan was the recipient of a Security Serious Unsung Heroes Award for his work in Information Security. Jonathan is listed as a Super Lawyer and has been listed in Legal Experts from 2002 to date.   

Jonathan is the former trustee of a children’s music charity and the longstanding co-chair of the New York State Bar Associations Rapid Response Taskforce, which has led the response to world events in a number of countries including Afghanistan, France, Pakistan, Poland, and Ukraine. 

In July 2023 Jonathan was appointed to the New York State Bar Association Presidential Task Force on Artificial Intelligence. Jonathan sits on the Task Force with leading practitioners, regulators, judges and academics to develop frameworks for the use and control of AI in the legal system.

Host: Susan Divers

Headshot_Susan_Divers_S7E18_Principled_Podcast

Susan Divers is a senior advisor with LRN Corporation. In that capacity, Ms. Divers brings her 30+ years’ accomplishments and experience in the ethics and compliance area to LRN partners and colleagues. This expertise includes building state-of-the-art compliance programs infused with values, designing user-friendly means of engaging and informing employees, fostering an embedded culture of compliance and substantial subject matter expertise in anti-corruption, export controls, sanctions, and other key areas of compliance.

Prior to joining LRN, Mrs. Divers served as AECOM’s Assistant General for Global Ethics & Compliance and Chief Ethics & Compliance Officer. Under her leadership, AECOM’s ethics and compliance program garnered six external awards in recognition of its effectiveness and Mrs. Divers’ thought leadership in the ethics field. In 2011, Mrs. Divers received the AECOM CEO Award of Excellence, which recognized her work in advancing the company’s ethics and compliance program.

Mrs. Divers’ background includes more than thirty years’ experience practicing law in these areas. Before joining AECOM, she worked at SAIC and Lockheed Martin in the international compliance area. Prior to that, she was a partner with the DC office of Sonnenschein, Nath & Rosenthal. She also spent four years in London and is qualified as a Solicitor to the High Court of England and Wales, practicing in the international arena with the law firms of Theodore Goddard & Co. and Herbert Smith & Co. She also served as an attorney in the Office of the Legal Advisor at the Department of State and was a member of the U.S. delegation to the UN working on the first anti-corruption multilateral treaty initiative.

Mrs. Divers is a member of the DC Bar and a graduate of Trinity College, Washington D.C. and of the National Law Center of George Washington University. In 2011, 2012, 2013 and 2014 Ethisphere Magazine listed her as one the “Attorneys Who Matter” in the ethics & compliance area. She is a member of the Advisory Boards of the Rutgers University Center for Ethical Behavior and served as a member of the Board of Directors for the Institute for Practical Training from 2005-2008.

She resides in Northern Virginia and is a frequent speaker, writer and commentator on ethics and compliance topics. Mrs. Divers’ most recent publication is “Balancing Best Practices and Reality in Compliance,” published by Compliance Week in February 2015. In her spare time, she mentors veteran and university students and enjoys outdoor activities.

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Daily Compliance News

Daily Compliance News: October 3, 2023 – The SBF Day of Reckoning Edition

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 morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition:

  • The US sees Ukraine’s corruption as a real threat.   (Politico)
  • Microsoft CEO testifies Google hurt Bing.  (WSJ)
  • Trump is alleged to have reaped over $100MM through fraud. (Reuters)
  • SBF trial begins. (NYT)
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Innovation in Compliance

Innovation in Compliance – The Podcasting for Business Conference

Innovation comes in many areas, and compliance professionals need to not only be ready for it but embrace it. One of those areas is podcasting. Tom Fox’s guest in this episode is Megan Dougherty, co-founder of One Stone Creative.

They discussed the upcoming Podcasting for Business Conference. In this virtual conference, scheduled for November 13-15, there will be a deep dive into strategies and best practices for effective business podcasting. Additionally, the Conference will cover a wide range of important factors that impact the success of a business podcast, including interviewing techniques, collaboration with remote teams, podcast reach, guest selection, and real-life examples of podcasts connecting brands with audiences. To conclude the conference, Megan will present her annual State of Business Podcasting Report, which provides valuable insights and data on best practices for podcasting businesses.

Key Highlights:

  • Translating Complex Information for Podcast Audiences
  • Maximizing Podcast Reach with Strategic Guest Selection
  • Podcast Power: Real-Life Brand-Audience Connections
  • Insights and Strategies for Business Podcasting

Resources:

Megan Dougherty on LinkedIn

One Stone Creative

Podcasting for Business Conference

Tom

Threads

Instagram

Facebook

YouTube

Twitter

LinkedIn

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Blog

Albemarle FCPA Enforcement Action: Part 1 – Background

Last week, Albemarle Corporation (Albemarle), a publicly traded specialty chemicals manufacturing company headquartered in North Carolina, agreed to pay more than $218 million to resolve investigations by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) into violations of the Foreign Corrupt Practices Act (FCPA) stemming from Albemarle’s participation in corrupt schemes to pay bribes to government officials in multiple foreign countries.

According to the DOJ Press Release, between 2009 and 2017, Albemarle, through its third-party sales agents and subsidiary employees, conspired to pay bribes to government officials to obtain and retain chemical catalyst business with state-owned oil refineries in Vietnam, Indonesia, and India. Albemarle illegally obtained profits of approximately $98.5 million as a result of the scheme.

What They Said

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division said, “Albemarle earned nearly $100 million by participating in schemes to pay bribes to government officials in multiple countries. As today’s announcement makes clear, the Justice Department will work tirelessly with our partners in the ongoing fight against international corruption. Today’s resolution also demonstrates the real benefits that companies can receive if they self-disclose misconduct, substantially cooperate, and extensively remediate.”

U.S. Attorney Dena J. King for the Western District of North Carolina said, “Corruption has no borders, but neither does justice. Companies are expected to adhere to the same ethical and legal standards whether they are doing business on U.S. soil or overseas. Albemarle’s eventual voluntary disclosure of fraud and subsequent efforts to remedy its business practices abroad is a step in the right direction for the company. Above all, today’s announcement underscores our commitment to fight corruption affecting the United States no matter where it occurs.”

IRS-CI Chief Jim Lee said, “The $218 million resolution announced today reflects IRS Criminal Investigation (IRS-CI) special agents’ commitment to working with our law enforcement partners to expose and disrupt organizations engaged in unscrupulous business practices aggressively. Thanks to our domestic and international law enforcement partners, we’ve ensured Albemarle will be held accountable for their misdeeds.”

Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit, said in an SEC Press Release, “Despite repeated and glaring bribery-related red flags, Albemarle failed for many years to implement sufficient internal accounting controls relevant to the use of agents by its global refining solutions business to make sales to state-owned customers around the world. This failure set the stage for wide-ranging misconduct.”

The Bribery Schemes

The bribery schemes were in multiple countries and varied in execution. The DOJ said, “In Vietnam, Albemarle corruptly obtained contracts at two state-owned oil refineries through an intermediary sales agent who requested increased commissions to pay bribes to Vietnam officials and to structure tender requirements to favor Albemarle. In Indonesia, Albemarle used a third-party intermediary to corruptly obtain catalyst business with Indonesia’s state-owned oil company, even after that third-party intermediary had informed Albemarle that it was necessary to pay bribes to Indonesian officials to obtain business. In India, Albemarle used a third-party intermediary to corruptly retain catalyst business with India’s state-owned oil company by avoiding Albemarle being blacklisted.”

The SEC said, “According to the SEC’s Order, despite significant red flags, Albemarle used agents from at least 2009 through 2017 that paid bribes to obtain sales of refinery catalysts to public-sector oil refineries in Vietnam, India, and Indonesia and private-sector oil refineries in India.” The SEC went on to note that “Albemarle violated the FCPA’s recordkeeping requirements and failed to devise and maintain a sufficient system of internal accounting controls to provide reasonable assurances that payments made to agents in Vietnam, Indonesia, India, China, and the United Arab Emirates were for legitimate services.”

The Penalties

According to the FCPA Blog, Albemarle agreed to pay the “DOJ and SEC $218 million in penalties and disgorgement to resolve FCPA offenses related to bribing government officials at state-owned oil refineries around the world.” With regard to the DOJ, Albemarle entered into a three-year non-prosecution agreement (NPA) to pay a penalty of approximately $98.2 million and administrative forfeiture of approximately $98.5 million.

This DOJ penalty included a reduction of $763,453 under Part II of the Criminal Division’s March 2023 Compensation Incentives and Clawbacks Pilot Program for bonuses that the company withheld from qualifying employees. Additionally, Albemarle agreed to pay approximately $103.6 million in disgorgement and prejudgment interest as part of the resolution of the SEC’s parallel investigation. The DOJ credited approximately $81.9 million of the forfeiture to be paid to the Department against disgorgement Albemarle has agreed to pay to the SEC.

According to the SEC, “Albemarle consented to the SEC’s Order finding that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the Securities Exchange Act of 1934. Albemarle has agreed to cease and desist from committing or causing any future violations of these provisions and to pay disgorgement of more than $81.8 million plus prejudgment interest of more than $21.7 million, totaling more than $103.6 million.”

Join us tomorrow, where we take a deep dive into the bribery schemes.

Additional Resources

DOJ- Non-Prosecution Agreement

SEC Order

Categories
31 Days to More Effective Compliance Programs

One Month to a More Effective Compliance Program Through Innovation: Day 2 – Taming Complexity in Compliance

One of the lessons we have learned from various FCPA enforcement actions over the years is how complexity in business organizations can work to defeat compliance programs. Whether a corrupt employee is working to actively hide a pot of money, which can or will be used to pay a bribe, or an improper payment slips through the cracks, complexity can work to defeat a best practices compliance program. A compliance function needs visibility into a business unit, how it does business, and where its payments are going, or else it may be due to design defects or inadvertent complexity.

Compliance is now in an era of brisk innovation and evolution. It is prone to technological change and rapid obsolescence of the lawyer-driven, spreadsheets, and word document-based compliance programs. As we advance, the compliance professional needs to understand that a “package of resilience, adaptability, coordination, and inimitability becomes more attractive than the package of efficiency, understandability, manageability, and predictability.” The key is to learn how to harness complexity on a sustainable basis.

Three key takeaways:

  1. Not all complexity is bad.
  2. If you cannot figure out how a foreigner does business, you have a problem.
  3. Compliance is now properly seen as a business process.

For more information, check out The Compliance Handbook, 4th edition, here.

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The Ethics Experts

Episode 160 – Dr. Michelle K. Johnston

In this episode of The Ethics Experts, Nick welcomes Dr. Michelle K. Johnston. Dr. Michelle K. Johnston is a management professor, executive coach, and leadership expert who serves as the Gaston Chair of Business at Loyola University New Orleans. Michelle recently published her new book, The Seismic Shift in Leadership: How to Thrive in a New Era of Connection, which is now an Amazon bestseller.
She was named one of the most influential New Orleanians, a top 500 business leader, and a Woman of the Year by CityBusiness.

Executive Coach, Keynote Speaker, Management Professor


https://podcasts.apple.com/us/podcast/the-seismic-shift-with-michelle-johnston/id1625361801

https://www.linkedin.com/in/michelle-johnston-0264b5b/

Categories
Career Can D0

Shattering the Mirrored Door with Ellen Taaffe

On this episode of Career Can Do, Mary Ann Faremouth welcomes Professor Ellen Taaffe, an expert in career development and a prominent advocate for women’s empowerment in the workplace. A leadership coach, TEDx speaker, and Kellogg Professor, Ellen helps leaders create the future they desire. Ellen and Mary Ann explore the “mirrored door” concept that often holds women back in their careers. She shares five success strategies from her upcoming book, The Mirrored Door: Break Through the Hidden Barrier that Locks Successful Women in Place, and provides valuable insights on how to shatter that mirrored door.

Ellen highlights that self-doubt and the pursuit of perfection can hinder career progress. Her advice? Embrace imperfection and take courageous steps forward. It’s not about being perfect; it’s about being authentic and confident. Breaking free from the limitations of traditional leadership molds is crucial. Ellen encourages women to expand their definition of leadership and embrace their unique qualities. By doing so, they can unlock their full potential and lead with authenticity.

 

Feedback isn’t just a formality—it’s a powerful tool for personal and professional development. Ellen shares her own journey with feedback and stresses the importance of asking powerful questions to understand how to improve. Effective feedback delivery, infused with positivity and gratitude, is key. 

 

Listening isn’t just about hearing words; it’s about understanding facts, feelings, and values. Ellen discusses the use of different listening lenses, like gratitude and curiosity, to enhance communication. These skills are invaluable in performance reviews and debriefs, fostering better understanding and collaboration.

 

Resources

Ellen Taaffe on the Web | LinkedIn | Twitter

Faremouth.com

Categories
Corruption, Crime and Compliance

3M’s SEC FCPA Settlement

3M’s recent $6 million settlement with the SEC for violating the FCPA serves as a stark reminder of the risks global companies face in today’s economy and underscores the crucial role of ethics and compliance programs. In this episode of Corruption, Crime and Compliance, Michael Volkov sheds light on the unethical conduct that led to legal repercussions and offers valuable insights into compliance, bribery mitigation, and the importance of tight control over official visits.

You’ll hear Michael talk about:

  • 3M Corporation, a global company, was found to have made improper payments to Chinese healthcare officials employed by state-owned enterprises. These payments were disguised as expenses for attending overseas conferences and educational events.
  • The scheme involved deceptive tactics where 3M presented these events as educational, but in reality, they included tourism and entertainment activities. This included creating fake agendas and hidden tourism components.
  • Employees at 3M’s China operations colluded with travel agencies to set up alternative itineraries that combined tourism activities with the purported educational events. Chinese officials either did not attend the educational events or missed significant portions of them. 3M China employees tracked the impact of these events on the company’s sales. The costs of these trips were improperly recorded as legitimate business expenses, resulting in 3M benefiting by at least $3.5 million in increased sales.
  • In the aftermath of this ethical breach, 3M took crucial steps towards remediation through self-reporting, cooperation with the investigation, and taking disciplinary actions such as terminating employees involved, severing relationships with travel agencies, and enhancing controls over cross-border fund transfers.

 

KEY QUOTES

“But 3M made payments to Chinese healthcare officials from state-owned enterprises or hospitals or healthcare delivery systems to attend overseas conferences, educational events, and healthcare facility visits. And these were paid for presumably as permissible educational events, but they actually were pretexts to provide overseas travel, sightseeing, and entertainment or tourism activities.” – Michael Volkov

 

“3M employees accompanied the Chinese officials on the tourism activities, and the tourism activities included guided tours, shopping visits, day trips to nearby sites, and other leisure activities.” – Michael Volkov

 

“This case also reminds me of a case several years ago called Johnson Controls, where the local China operation was able to secure funding and engaged in a sort of collusion process by which they sought funds and expenditures for less than $5,000. And they did that because it didn’t require corporate approval above just the local level.” – Michael Volkov

 

Resources

Michael Volkov on LinkedIn | Twitter

The Volkov Law Group

Categories
Daily Compliance News

Daily Compliance News: October 2, 2023 – The Welcome to October Edition

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 morning coffee, and listen to the Daily Compliance News. All from the Compliance Podcast Network. Each day, we consider four stories from the business world: compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Stories we are following in today’s edition:

  • Albemarle settles FCPA action.  (FCPA Blog)
  • Shinhan Bank to pay $25MM for ‘compliance problems’. (WSJ)
  • Yet another pre-taliation case, this time DE Shaw pays $10MM. (WSJ)
  • Clear Channel settles FCPA enforcement action. (FCPA Blog)
Categories
Adventures in Compliance

The Memoirs of Sherlock Holmes – Introduction

Welcome to a review of all the Sherlock Holmes stories collected in the work “The Memoirs of Sherlock Holmes.” They appeared in the Strand Magazine from December 1892 to December 1893. Over the next 12 episodes, I will review each story and mine them for leadership, compliance, and ethical lessons.  In this introductory episode, I introduce The Memoirs of Sherlock Holmes.

Arthur Conan Doyle’s Sherlock Holmes is undoubtedly one of literature’s most iconic and enduring characters. The collection of short stories, “The Memoirs of Sherlock Holmes,” showcases the brilliance of Holmes as a detective and the captivating mysteries he solves. Published in the late 19th century, these stories have stood the test of time and continue to captivate readers with their intricate plots, vivid settings, and exploration of human nature.

One of the key factors that impact the success of “The Memoirs of Sherlock Holmes” is Doyle’s meticulous crafting of each character. Holmes is a masterfully developed character known for his unparalleled deductive reasoning and ability to observe even the smallest details. His loyal friend and chronicler, Dr. Watson, provides readers with a relatable perspective and serves as a reminder of the importance of friendship and loyalty.

The collection’s diversity of settings and themes is another strength of “The Memoirs of Sherlock Holmes.” Doyle takes readers from the bustling streets of London to the idyllic English countryside, showcasing his ability to create vivid and immersive environments. Each story explores different aspects of human nature, from jealousy and revenge to love and obsession. This variety keeps the collection fresh and engaging, ensuring readers are constantly intrigued.

One of the most notable stories in “The Memoirs of Sherlock Holmes” is “The Final Problem,” where Doyle initially planned to end Holmes’ character. This decision was driven by the character’s popularity and how Holmes had taken over Doyle’s life as a writer. However, due to popular demand, Doyle continued to write more stories featuring Holmes. This tradeoff between artistic vision and commercial success highlights the challenges authors face when balancing different factors in their work.

The enduring appeal of Sherlock Holmes is a testament to the timeliness of Conan Doyle’s storytelling. Holmes has become a symbol of deductive reasoning and the power of logic, solidifying his place in literature and popular culture. Countless literary and on-screen adaptations continue to breathe life into this beloved character, further emphasizing his impact.

“The Memoirs of Sherlock Holmes” is a literary treasure that continues to captivate readers with its brilliant detective work, memorable characters, and captivating mysteries. Doyle’s ability to craft intricate plots and showcase the brilliance of Holmes has solidified this collection’s place in the pantheon of great detective fiction. Whether you are a longtime fan or new to Sherlock Holmes, “The Memoirs of Sherlock Holmes” is a must-read that will transport you to a world of intrigue, deduction, and timeless storytelling.

Conan Doyle left an indelible mark on literature and popular culture. The collection of short stories in “The Memoirs of Sherlock Holmes” showcases Doyle’s storytelling prowess and the enduring appeal of Holmes as a character. Balancing factors such as character development, diverse settings, and reader demand, Doyle created a literary masterpiece that continues to captivate audiences today. So, grab a copy of “The Memoirs of Sherlock Holmes” and embark on a thrilling journey into the world of the iconic detective.

Resources:

The New Annotated Sherlock Holmes

Contents of the Memoirs of Sherlock Holmes

“The Adventure of Silver Blaze”

“The Adventure of the Cardboard Box” is not in the first British edition or many other eds.

“The Adventure of the Yellow Face”

“The Adventure of the Stockbroker’s Clerk”

“The Adventure of the Gloria Scott”

“The Adventure of the Musgrave Ritual”

“The Adventure of the Reigate Squire”

“The Adventure of the Crooked Man”

“The Adventure of the Resident Patient”

“The Adventure of the Greek Interpreter”

“The Adventure of the Naval Treaty”

“The Final Problem”