There was a paucity of Foreign Corrupt Practices Act (FCPA) enforcement actions in 2021. However, the few enforcement actions announced did provide significant lessons for every compliance professional.
Deutsche Bank
The year started off with a bang when, according to a Department of Justice (DOJ) Press Release, Deutsche Bank Aktiengesellschaft, “agreed to pay more than $130 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities fraud scheme. “The resolution includes criminal penalties of $85,186,206, criminal disgorgement of $681,480, victim compensation payments of $1,223,738 and $43,329,622 to be paid to the US Securities & Exchange Commission in a coordinated resolution.” Settlement documents include a Deferred Prosecution Agreement (DPA) and Information from the Department of Justice (DOJ) and a Cease and Desist Order (Order) entered to with the Securities and Exchange Commission (SEC). This settlement comes on the heels of another FCPA settlement in August 2019, where the Bank paid $16.2 million to settle a ‘Princeling’ charge that it corruptly hired sons and daughters of foreign officials and of employees of state-owned enterprises.
One can only wonder at the culture at the Bank which basically boiled down to win at all costs: lie, cheat, steal, engage in bribery and corruption, manipulate the markets, we don’t care. Just Win Baby. The Bank was also comfortable in dealing with some very dodgy characters beyond even Donald Trump and his family. The Bank has now said it will no longer do business with Trump and his personal banker left the Bank at the end of 2020.
Does this mean the Bank will turn state’s evidence against Trump? It is hard to say at this point, but the Bank is committed in the DPA to “cooperate fully with the Offices in any and all matters relating to the conduct described in the Statement of Facts and other conduct under investigation by the Offices at any time during the Term, subject to applicable laws and regulations, until the later of the date upon which all investigations and prosecutions arising out of such conduct are concluded, or the end of the Term.” [emphasis supplied] While this is boilerplate language found in every DPA it certainly takes on greater significance now.
Amec Foster Wheeler
The next matter was the Amec Foster Wheeler FCPA enforcement action, which is currently owned by John Wood Group PLC (Wood), the successor-in-interest to Amec Foster Wheeler Plc. It involved a long-standing corruption investigation which involved multiple investigative and enforcement agencies in multiple jurisdictions regarding the use of the disgraced agent Unaoil to pay bribes to secure business. In a Press Release, the Company said that it had reached agreements with the UK Serious Fraud Office (SFO), the DOJ and SEC) in the US, and the Ministério Público Federal (MPF), the Comptroller General’s Office (CGU) and the Solicitor General (AGU) in Brazil, to resolve their respective bribery and corruption investigations into the past use of third parties in the legacy Foster Wheeler business. Under the terms of these various agreements, the Company will pay compensation, disgorgement and prejudgment interest, fines and penalties totaling $177m. The payment will “be phased over the next three years with approximately $62m payable in H2 2021, and the balance to be paid in instalments in 2022, 2023 and 2024.”
There were some key lessons learned from the matter. In the area of internal controls, hopefully in 2021, if a General Counsel is asked to draft an agreement, even an interim agreement which violates a company’s internal controls for the vetting and contracting with third-party agents, that GC would stop the process. But if not, there should trips wires which would alert those at the highest level of a corporation that a key control was been over-ridden or worked around. This of course means the Board of Directors should have visibility into the highest risks an organization faces and in the world of international commerce, a third-part sales agent is that level of risk.
This case also involved multiple failures in the area of Mergers and Acquisitions (M&A). There were at least two acquisitions involved here where the acquiring entity; first Amec acquired Foster Wheeler (forming Amec Foster Wheeler) and then the second, the John Wood Group PLC (acquiring Amec Foster Wheeler) failed to perform either sufficient pre-acquisition due diligence or even post-acquisition audit of the acquired company’s high-risk ventures. Once again, this involved Petrobras which was well-known for corruption issues by 2014. There was no mention of the failures of Amec and Wood in the M&A areas on this matter but clearly something went through unnoticed.
Since at least the 2012 FCPA Resource Guide, the DOJ and SEC have specified the steps for compliance in M&A. It is pre-acquisition due diligence which should form the basis of post-acquisition integration. After acquisition, there should be a full forensic FCPA audit and investigation, most notably in high-risk markets and with high-risk ventures. There must be full compliance training and integration of the acquired entity into the acquirer’s compliance regime.
WPP
Finally, was the SEC Cease and Desist Order entered into with WPP plc, the world’s largest advertising group, for paying bribes to Indian government officials and participating in other “illicit schemes” in China, Brazil and Peru. WPP agreed to pay $11 million+ in disgorgement and interest and penalty of $8 million for a total amount of just over $19 million. Some of the key lessons from compliance including the following.
Culture Matters – It seems about the most basic thing to say in the compliance realm, but the most important thing is your corporate culture. If your culture puts no value on doing business ethically and in compliance, your organization will surely have problems. Investigations – From the ignoring of internal whistleblower reports, to selecting poor investigative counsel, to allowing the persons involved in the corruption to help shape the original internal investigation, this matter is an excellent teaching tool for how NOT to perform an investigation. M&A – There was no preacquisition compliance due diligence into any of the entities acquired. This was bookended with no forensic compliance audit of the acquired entities after acquisition as well. Incentives – When do sales or remuneration incentives become perverse incentives? WPP crossed that threshold when they made the earnouts for the founders of the organizations they acquired, who were kept on to run subsidiaries such as WPP-India, contingent on hitting sales numbers they could not reach without engaging in bribery and corruption.
While there was a smaller number of FCPA enforcement actions in 2021 than in prior years, the cases that were resolved were significant. They provide many lessons for every Chief Compliance Officer (CCO) and compliance professional.
In this episode of the FCPA Compliance Report, I visit with John Katsos, Assistant Professor and Scholar at American University of Sharjah. John has researched and performed due diligence in conflict zones in the Middle East and Africa. He was part of a research team that published a series in the Big Idea section of the Harvard Business Review entitled Preparing for the Era of Uncertainty, which is a must read for every compliance professional. He brings a unique perspective to a variety of compliance topics. Highlights of this podcast include:
- Academic and professional background.
- Why due diligence in conflict zones so difficult?
- What are some of the important differences in performing DD in conflict zones?
- What are some keys to successfully performing DD in conflict zones?
- Key lessons you observed on DD in Cyprus?
- Where did you come up with the idea for this series of articles, Preparing for the Era of Uncertainty?
- A discussion of each article in the series.?
- What is it like teaching anti-corruption and other forms of compliance outside the US?
- How do you see your work tying into a broader ESG discussion?
- How does climate change and migration across borders influence your thinking?
Resources
Preparing for the Era of Uncertainty-Harvard Business Review
John Katsos website, including some great research and papers
John Katsos LinkedIn profile
What 2021 Brought to Compliance
2021 was a very significant year for every compliance practitioner and compliance program. While there was a paucity of corporate FCPA enforcement actions, the three enforcement actions were significant with multiple lessons for the compliance professional. In Deutsche Bank, we learned about the costs of a corrupt culture and recidivism, in Amec Foster Wheeler, we saw happens to a company which pays bribes and then tries back out; the criminals they are dealing with have them in an untenable position that they must continue to pay the bribes and how catastrophic failure in pre- and post-acquisition due diligence can lead to massive FCPA violations. Finally, in WPP, we saw how accepted business incentives can become perverse, what happens when you ignore whistleblowers. However, there were two major policy announcements from the Biden Administration which every compliance professional needs to not simply be aware of but study and implement solutions based upon these announcements.
In late October, Deputy Attorney General Lisa O. Monaco gave a Keynote Address at ABA’s 36th National Institute on White Collar Crime (Monaco Speech). Her remarks were noted by many commentators. Her remarks should be studied by every compliance professional as they portend a very large change in the way the DOJ and potentially other agencies enforce the FCPA. This has significant implications for every Chief Compliance Officer (CCO), compliance professional and corporate compliance programs.
The key changes announced in the Monaco Speech were as follows: (1) “today I am directing the department to restore prior guidance making clear that to be eligible for any cooperation credit, companies must provide the department with all non-privileged information about individuals involved in or responsible for the misconduct at issue. To be clear, a company must identify all individuals involved in the misconduct, regardless of their position, status or seniority.” This portends a return to the strictures of the Yates Memo. (2) “The second change I am announcing today deals with the issue of a company’s prior misconduct and how that affects our decisions about the appropriate corporate resolution. (3) The final change I am announcing today deals with the use of corporate monitors.” This final change is a rejection of the strictures laid out in the Benczkowski Memo regarding the DOJ use of corporate monitorships.
In November, the Biden Administration released the United States Strategy on Countering Corruption (the “Strategy”); subtitled “Pursuant To The National Security Study Memorandum On Establishing The Fight Against Corruption as a Core United States National Security Interest”; in response to President Biden’s prior declaration of corruption as a national security issue of the United States. While obviously focused on the US government’s role in leading the fight against corruption, the entire document portends a major sea change in the approach of fighting bribery and corruption, literally on a worldwide basis. For this reason alone, it should be studied by all compliance professionals.
The Strategy has five pillars. Pillar 1 is Modernizing, Coordinating, and Resourcing U.S. Government Efforts to Fight Corruption, with five strategic objectives (1) to enhance corruption related research, data collection, and analysis; (2) improve information sharing within the U.S. Government, with non-U.S.-Governmental entities, and internationally; (3) increase focus on the transnational dimensions of corruption; (4) organize and resource the fight against corruption, at home and abroad; and (5) integrate an anti-corruption focus into regional, thematic, and sectoral priorities.
Obviously, this more holistic approach is most welcomed. Corruption does more than simply steal money from the world economy. According to the Strategy, “Corruption robs citizens of equal access to vital services, denying the right to quality healthcare, public safety, and education. It degrades the business environment, subverts economic opportunity, and exacerbates inequality. It often contributes to human rights violations and abuses and can drive migration. As a fundamental threat to the rule of law, corruption hollows out institutions, corrodes public trust, and fuels popular cynicism toward effective, accountable governance.” I would add several others such damaging the fight against climate change, destroying ethic business practices and, of course, leading to transnational crime and terrorism.
I cannot wait to see what 2022 will bring the compliance community.
In this podcast series, two complete MCU fans, Tom Fox, founder of the Compliance Podcast Network and Megan Dougherty, co-founder of One Stone Creative indulge in passion for all things in the Marvel Cinematic Universe by re-watching each movie and then podcasting on every movie in the MCU. If you want to indulge in your love for the MCU with two fans who are passionate about all things MCU, this is the podcast series for you. For this offering, we consider the Captain Marvel.
Some of the highlights include:
Ø The story synopsis.
Ø What are the key plot points?
Ø What were some of our favorite cookies?
Ø How does this movie fit into the overall MCU?
Ø How is this movie an homage to prior non-MCU movies?
Next up in our series Iron Man
With Jay on a holiday assignment, Tom is joined by Professor Karen Woody to look at some of the week’s top compliance and ethics stories this week in the Naughty List edition.
Stories
- JPMorgan tagged $200MM for failures in electronic record keeping. Tom in the FCPA Compliance and Ethics Blog. Matt Kelly in Radical Compliance. Tom and Matt in Compliance into the Weeds.
- Nikola was fined $125MM for the former CEO’s imprudent tweets. Tom in the FCPA Compliance and Ethics Blog. Matt Kelly in Radical Compliance. Jaclyn Jaeger in Compliance Week. (sub req’d).
- SOX 20 years later. Michael Peregrine looks back at the upcoming 20th anniversary of Sarbanes-Oxley in the Harvard Law School Forum on Corporate Governance.
- France is updating its ABC regime. Frederick Davis in GAB.
- Another Unaoil defendant appeals conviction based upon SFO misconduct. Dylan Tokar in WSJ Risk and Compliance Journal.
- What happened to FCPA Compliance in 2021? Dick Cassin explores in the FCPA Blog.
- The story of internal controls and Netflix? Jonathan Marks in BakerTilly.
- Vietnam imposes a 14-year sentence for wildlife trafficking. Jon Rusch in Dipping Through Geometries.
- Lawyers and ESG. Lawrence Heim in PracticalESG.
- Prioritizing your policy updates. David Banks in Risk and Compliance Matters.
Podcasts and Events
- Want some fun over the holidays? Join Tom and One Stone Creative co-founder Megan Dougherty to explore the full MCU. In Episode 1, Captain America. In Episode 2, Captain Marvel. Next week in Episode 3, Iron Man.
- In December on The Compliance Life, I visited with Matt Silverman, Director of Trade Compliance at VIAVI. Matt is the first Trade Compliance Director I have hosted on TCL. In Part 1, Matt details his academic career and early professional life. In Part 2, Matt moves into trade compliance. In Part 3, Matt moves into the Director’s chair.
- The Compliance Podcast Network welcomes Professor Karen Woody and her new podcast, Classroom Insider. In this unique pod, Karen interviews some of her students to tell them the history of insider trading. Check out Episode 1 on Episode 2, the disclosure or abstain rule. In Episode 3 (premiering Dec. 31), they will take up narrowing the scope of the disclose or abstain rule.
- The Shout Outs and Rants of Everything Compliance gets its own iTunes show. Everything Compliance has its first-year end review episode.
- On Hidden Traffic, Gwen Hassan hosts Andrew Wallis, head of Unseen UK.
Tom Fox is the Voice of Compliance and can be reached at tfox@tfoxlaw.com. Karen Woody is a Professor of Law at Washington and Lee. She can be reached at kwoody@wlu.edu.
In today’s edition of Daily Compliance News:
- Wall Street puts hold on RTO. (NYT)
- Brazilian companies list on NYSE, what could go wrong. (Reuters)
- SEC blocks Apple bid to block shareholder proposal. (Reuters)
- Amazon sues India financial crimes agency. (SEC Press Release)
On the Naughty List – Urban Meyer
We conclude our pre-Christmas Naughty List review and today we have one person who is on the Very Naughty List. That person is now former Jacksonville Jaguars head coach Urban Meyer. The missteps, inanity and downright irresponsible actions taken by Meyer during his abortive less than one season with the Jags is not only one for the annals in National Football League (NFL) history but provides multiple lessons learned for the compliance professional.
Meyer was a very successful college coach winning national titles at two schools, Florida and Ohio State. But he was clearly out of his depth in the NFL, which of course is professional football and not college football. But the red flags were all there for any who cared enough to look. Clearly, they were ignored by the Jags owner, now to his shame and humiliation. It began almost immediately after Meyer’s hiring when he tried to retain a strength and conditioning coach who had been fired at Iowa for allegations of racial abuse.
Michael DiRocco reported, “In February, Meyer hired former Iowa strength coach Chris Doyle, who was accused of making racist remarks and belittling and bullying players while with the Hawkeyes. Doyle resigned a day later after the Jaguars were criticized for the hire by the Fritz Pollard Alliance.” Before the resignation, Meyer had claimed he had done his due diligence on Doyle with Meyer adding, he “did not consider the implications of hiring him.” Later in the summer, the NFL “fined the Jaguars $200,000 and Meyer $100,000 for excessive contact during a June 1 organized team activity. The team also must forfeit two OTAs during the first week of the 2022 offseason, meaning they will have only eight.”
Please note the season had not even started yet.
The Jags got off to an ignominious start losing to the pathetic Houston Texas and began the season 0-4. It was at this point, missteps turned into inanity. After losing to the Cincinnati Bengals to reach 0-4, Meyer did not travel back to Jacksonville with the team but went to Columbus OH to unwind, relax with friends and to visit with his grandchildren. Almost immediately, “a video began circulating on social media on Oct. 1 that showed a woman who was not Meyer’s wife dancing close to his lap at his Columbus restaurant. Meyer apologized in positional group meetings early in the week, then at a news conference and again in a team meeting later in the week. Khan also issued a public rebuke.”
As the losing wore on, Meyer’s true personality came out. Andrew Gastelum, reported that in November Meyer “was involved in multiple disputes with players and coaches over the last two weeks, including a heated argument with receiver Marvin Jones and that Jones was reportedly so angry with Meyer’s criticism of Jaguars receivers that he left the team facility. According to Pelissero, staff convinced the receiver to return only for him to get into a heated argument with Meyer at practice.” Moreover, “Meyer reportedly challenged assistants to defend their résumés individually during a staff meeting where he told his coaching staff that he was a winner and that they were losers.” Of added significance to this reporting was, according to Tom Pelissero, that the sources for this story came from the NFL office, not simply Jag players. Predictably, in an incredibly inane move, as reported by Jordan Dajani, Meyer denied both events ever happened.
Yet even Meyer was capable of achieving another low, moving to complete irresponsibility.
Enraged and wrongfully believing that the source of this latest escapade came from inside the Jags, he announced anyone that blew the whistle on him would be unceremoniously shown the door, as in immediately. Then last week, Ryan Glasspiegel, reported that former Jags kicker Josh Lambo accused of Meyer of kicking him at practice in August. Lambo said, “It certainly wasn’t as hard as he could’ve done it, but it certainly wasn’t a love tap. “Truthfully, I’d register it as a five (out of 10). Which in the workplace, I don’t care if it’s football or not, the boss can’t strike an employee. And for a second, I couldn’t believe it actually happened. Pardon my vulgarity, I said, ‘Don’t you ever f–king kick me again!’ And his response was, ‘I’m the head ball coach, I’ll kick you whenever the f–k I want.’”
Unsurprisingly Meyer denied this also ever happened. Yet this is where complete irresponsibility turns to the surreal. While Meyer was denying the event ever took place, he had his lawyers threatening the reporter who broke the story. But here is the surrealness, as the lawyers did not dispute that Meyer kicked Lambo, only how hard. So, Meyer’s lawyers admit there was an assault, it just was not serious.
Finally, even the Jags owner had enough and when the assault allegations broke, he fired Meyer that night. The owner, Shad Khan claimed that he had intended to fire Meyer after the latest loss on Sunday, but it took him several days to get his ducks in a row. Of course, while the owner was doing so, Meyer was still coaching the Jags. Me thinks something is rotten with that story.
What are the lessons for the compliance professional in all of this?
Let’s start with due diligence. Meyer was penalized in Columbus for his less-than-ethical behavior around an assistant coach accused of assaulting his wife. He somehow managed to lose or deleted multiple text message on the topic. He was suspended for three games by Ohio State for his conduct. All of this was in the public record and there for all to see. Think executive due diligence is not important? Think again (and while you are thinking about it call Candace Tal.)
Internal Controls. Yes, there are internal controls in football. One such control deals with player safety based upon amount of physical contact which can occur during offseason training camp (OTA). Meyer and the Jags were fined for having players engage in contact drills. In typical Meyer fashion, he had the Jags deny the team had done anything wrong as it was the players who simply could not contain themselves.
Discipline. Pro football has a Neanderthal governance structure (with the noted exception of the Green Bay Packers, who exist in a parallel socialist world). There is no public company, no Board overseeing the company. There is an owner and every significant employee reports directly to the owner. Clearly the owner, who did not do due diligence on Meyer’s character, was not going to discipline him. Although he belatedly claimed he was going to do so after the most recent loss, that seems like “Monday Morning Quaterbacking” to me. Do you really think that if any other Jag employee engaged in any of this behavior they would not have been sacked? Discipline must be delivered uniformly and fairly. That is called Institutional Fairness and is the responsibility of the Chief Compliance Officer (CCO). It is also a requirement of a compliance program. As was noted in the original FCPA Resource Guide, compliance has to apply from the “Board room to the shop floor.” Even in the recent Securities and Exchange Commission (SEC) enforcement action involving JPMorgan, the SEC required “an evaluation of who violated policies and why, what penalties were imposed, and whether penalties were handed out consistently across business lines and seniority levels.”
Perhaps now you might understand why Urban Meyer is on the Very Naughty List. But you can use the lessons learned to help keep your organization off the Naughty List in 2022 and beyond.
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. Today, Matt and Tom take a deep dive into the JPMorgan settlement with the SEC and CFTC for faulty electronic record-keeping. Some of the issues we consider are:
· Why does Matt ‘almost feel bad’ for JPMorgan?
· There was a paucity of facts. So why is the fine so high?
· Is it a ‘Compliance Consultant’ or a Monitor?
· The remediation agreed to by JPMorgan.
· Lessons learned for the compliance professional and ephemeral communications.
· Focus on consistent and even-handed discipline for JPMorgan employees going forward.
Resources
Matt in Radical Compliance
Tom in the FCPA Compliance and Ethics Blog
In today’s edition of Daily Compliance News:
- Harvard Prof guilty of lying about China connection. (NYT)
- NatWest pleads guilty, yet again. (WSJ)
- Predicting corrupt politicians. (PhysOrg)
- Nikola fined $125MM for CEO tweets. (SEC Press Release)
We continue our exploration of Santa’s Naughty List this week before Christmas by looking at the compliance failures of Nikola Corporation (Nikola). In a Press Release, the Securities and Exchange Commission (SEC) announced that Nikola, a publicly traded company created through a special purpose acquisition company transaction, has agreed to pay $125 million to settle charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects via a Cease and Desist Order (Order). This follows on the heels of an earlier filing against former Nikola founder and Chief Executive Officer (CEO), Trevor R. Milton (Milton), for repeatedly disseminating false and misleading information – typically by speaking directly to investors through social media – about Nikola’s products and technological accomplishments.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said in the Press Release, “As the order finds, Nikola Corporation is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology. This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides.” And boy what misconduct it detailed. This matter should be studied by not only every compliance professional but also every business executive. It also points out one of the basic deficiencies of Special Purpose Acquisition Corporations (SPACs).
Nikola was created via the merger of Legacy Nikola and VectoIQ Acquisition Corp. (VectoIQ), which was formed in 2018 as a SPAC, for the purpose of effecting a business combination with one or more businesses. According to the Order, “VectoIQ and Legacy Nikola entered into a Business Combination Agreement (the “Business Combination Agreement”), as well as certain related agreements, pursuant to which Legacy Nikola would merge with a subsidiary of VectoIQ, with Legacy Nikola remaining as the surviving company and as a wholly-owned subsidiary of VectoIQ. On June 3, 2020, Legacy Nikola and VectoIQ consummated the merger contemplated by the Business Combination Agreement (the “Business Combination”), and VectoIQ changed its name to Nikola Corporation” and on June 4, 2020, Nikola’s common stock and warrants began trading on the Nasdaq Global Select Market.
What got Nikola into such SEC hot water was the mouth or rather modern-day social media postings of Milton. The Order stated, “From approximately March 2020 through September 2020, in his capacity as CEO and later as Executive Chairman of Nikola, Milton made materially false and misleading statements on numerous critical topics related to Nikola’s capabilities, technology, reservations, products, and commercial prospects.” Matt Kelly, writing in Radical Compliance, was a bit more pithy stating, “The problem was that almost every statement Milton made about Nikola’s hydrogen vehicles was, well, hot air.” According to the Order, there were multiple instances where Milton mislead investors and indeed anyone reading social media about the company.
Milton made false and misleading statements about the capabilities of Nikola’s first semi-truck prototype, the Nikola One, saying it was a working model and made a fraudulent video to back it up. He made a series of false and misleading claims about Nikola’s then-current hydrogen production capabilities, its costs to produce hydrogen, and the costs at which it obtained electricity to produce hydrogen profitably. He made false statements claiming that Nikola had engineered and already completed a prototype of an electric pickup truck, the Badger. Milton claimed that a “backlog of interest” in the vehicles were in the form of binding contracts, “the vast majority of the pre-orders were indications of interest that were cancellable at any time,” even going so far as to claim one customer had a binding order for 5,000 vehicles when no such contract existed. Finally, to top off all of Milton’s whoppers, he claimed a partnership with General Motors (GM) would generate over $4 billion in cost saving when there was no such arrangement in place.
I went into some detail in these clearly bogus claims to demonstrate why a Chief Compliance Officer (CCO) needs to have a handle on what their CEO is tweeting and social media-ing out. What steps can a CEO take? Here I will borrow once again from the Coolest Guy in Compliance.
- Take a team approach to reviewing and publishing information about the company, so someone else can put a second set of eyes (The Eyes of Dr. T. J. Eckleburg) on what the CEO says before they hit the send button.
- This approach should be a formal policy and procedure, fully documented so when the SEC comes knocking there will be a record.
- A subject matter expert (SME) review on what statements about the company qualify as material information that should be disclosed in filings to the SEC.
- Your process should also contain a mechanism to correct any misleading or erroneous statements that slip through your fully documented and operating policy and procedure.
If all of this sounds more than vaguely familiar it is because of the imbroglio surrounding Elon Musk and his use of social media. Musk was fined $30 million for his false and misleading tweets and the company was required a legal eagle to vet his tweets. All of this means this a CCO and corporate compliance program should be vigilant for this type of activity. Policies and procedures are mandatory, but they are only the starting point. This is a risk, like all other risks, it must be managed. If you set up policies and procedures but do not follow them, you could find yourself in SEC hot water as both Nikola and Milton have.
Put another way, Nikola got a Christmas present of 125 million lumps of coal. While any decision on Milton may have to wait until 2022, he will most probably be on Santa’s Naughty List for 2022.