Tom Fox’s guest on this week’s show is Dan Wager, VP of Global Financial Crime and Compliance at LexisNexis Risk Solutions. Dan is an executive with expertise in financial crime compliance and investigations. He and Tom discuss human trafficking, fraud and identifying the patterns of suspicious behaviors within an organization. Tom emphasizes, “All compliance professionals need to understand not only the risks around this area but also what the solutions are… The pandemic has caused an increase in this area because it’s closed down other business opportunities for the bad guys.”
It’s All About Money
Human trafficking, sex trafficking, money laundering and the like are not crimes of passion, Dan points out. “Their focus is to make money and that desire does not stop during an economic crisis and a global pandemic… It all comes back to moving money.” The way in which these crimes are committed is changing, and compliance professionals need to be aware. Tom comments that commercial corporations are being targeted more now because “they’re not set up to fight this scourge.” Dan explains why this is so and gives an example of how banks have been inadvertently used in PPP fraud recently. “These things move together – disadvantaged businesses looking for funds and illicit financiers looking for outlets, people on the narcotics or human smuggling realms looking for ways to make money and retain money in a difficult environment – they all fit together.”
Reputational Risks
Tom comments that your company’s reputation will be severely tarnished if you are found to be even remotely involved in human trafficking and human slavery. Dan says that most companies understand this but are struggling to detect it. You don’t want to be a company that purchased PPE from non-vetted suppliers because you’ll go down along with them, he warns. The reputational damage is just one part of the equation. “What do you think happens to those kinds of workers when you have counterfeit and hard-to-get PPE, in this kind of environment where they can’t even travel across the border or seek other employment? It is exploitation and health dangers on an epic scale,” Dan remarks.
Working From Home & Red Flags
Tom and Dan discuss the increased risk because of the move to work-from-home. Tom also asks about the risk that returning to work may bring. The speed with which remote work had to be implemented opened up new avenues for fraud, Dan says. Work computers are now sitting alongside personal network computers, and bad actors are using various ways to infiltrate both. Few companies are equipped to deal with these changed circumstances, which leaves them vulnerable. The way we conduct business has changed permanently, Dan remarks. This is good in many respects, but it opens up opportunities for fraud. He shares some red flags compliance professionals and financial institutions should look out for. If there is a dramatic change in how a company usually does business, that’s a major red flag, Tom and Dan agree.
Resources
Dan Wager | LinkedIn
LexisNexis Risk Solutions
In this episode, CSS’s Regulatory Content Manager Greg Hotaling sits down with Faye Sutherland, Head of Shareholding Disclosure of aosphere LLP to discuss the 2021 watchlist in the world of shareholding disclosure – from foreign direct investment and shareholder activism to updates on short selling restrictions.
A CSS RegTech podcast series on moving from a tactical to strategic approach to regulatory compliance. The global regulatory space is complex and fragmented. Financial firms can address this problem through tactical responses to regulatory deadlines or think more strategically on how to optimize their compliance data, operations and technology. The CSS weekly podcast features regulatory experts, former Chief Compliance Officers, cybersecurity specialists, industry partners and RegTech collaborators to help prepare investment management firms for changes on the regulatory horizon. For more information on CSS, visit: www.cssregtech.com
About Our Guest Speakers:
Greg Hotaling is a Regulatory Content Manager at CSS, addressing global regulatory matters relevant to the financial industry. Since its inception, Greg has led the regulatory research and content team for CSS’s global Investment Monitoring platform that facilitates compliance with shareholder disclosure, sensitive industries and position limit rules around the world.
Faye Sutherland is head of the Rulefinder Shareholding Disclosure service provided by aosphere LLP (an affiliate of Allen & Overy). Faye qualified as a lawyer in 2001 and joined aosphere in 2009 for the development and launch of Rulefinder Shareholding Disclosure. As Head of the Rulefinder service, Faye has oversight and responsibility for the legal content and development of a product which today is used by 330+ organisations and covers detailed legal analysis for 90+ jurisdictions. Faye is often asked to speak on regulatory topics concerning beneficial ownership reporting and short selling rules, especially for a view on global trends.
Welcome to the latest addition to the Compliance Podcast Network, Leading the Way, a StoneTurn podcast. StoneTurn’s Leading the Way podcast series highlights the top compliance, legal and anti-fraud practitioners who are breaking down siloes and setting new standards for excellence worldwide.
In this episode, StoneTurn Partner Valerie Charles is joined by CCO superstar Lisa Steward Hughes to hear the role of the CCO and compliance function in the era of the Coronavirus pandemic, social justice movements and increasingly rapid speed of change in the corporate compliance world. Please note between the time of the recording of this podcast Lisa changed jobs, moving from the SVP, Chief Compliance Officer at Endeavor to Chief Compliance Officer at Factset.
Some of the highlights include:
- Lisa’s journeys into through field of compliance.
- How the Coronavirus pandemic impacted compliance.
- Why are more women becoming leaders in compliance?
- Has diversity and inclusion come to compliance?
- Why compliance is uniquely situated to lead this discussion in the corporate setting?
- Being a supportive parent of a trans-gender teenager.
Big Brains In Compliance is the newest show on the Compliance Podcast Network featuring Tom Fox, the Voice of Compliance, and Stephen Martin, Partner at StoneTurn. In this week’s show, Tom chats with Stephen about the Six Elements framework Stephen helped develop. They discuss why it’s important and how companies can use it to construct a comprehensive compliance program that satisfies government requirements and drives an ethical culture.
The Six Elements
Typically business leaders would either find compliance programs too legalistic, so they would tune out, or believe that they would never run afoul of the guidelines, so they didn’t need to care. Stephen says they created the Six Elements framework for CEOs and companies to have an easily digestible, practical guide to create an effective compliance program for their companies. It helps them to benchmark their existing programs, recognize the gaps, and make enhancements.
“[The Department of Justice] has become much more sophisticated in evaluating the effectiveness of your compliance program,” Stephen points out. The Six Elements allow companies to have a continuous cycle of monitoring and improvement in the key areas of compliance: risk assessment; governance and structure; policies, procedures, controls; training and education; oversight and reporting; and response and enhancements. “It gives you a very nice work plan of how to enhance,” Stephen says, “and it’s something that both helps you as a company but also you can then show to government regulators if you are ever asked about the effectiveness of your compliance program.”
Risk Assessment and Monitoring
Tom comments on the DOJ’s recent statement that you should do your risk assessment whenever your risks change. Stephen adds that the two areas of compliance that companies struggle with the most are effective risk assessment and oversight and monitoring. He shares how his company helps clients build a proactive risk monitoring protocol: this allows them to monitor their risk internally on an ongoing basis. He and Tom talk about the importance of Data Analytics in oversight and monitoring. It’s the number one question compliance officers ask, Stephen says. They all want to use data but they don’t know how. His company again takes a proactive approach by helping clients create dashboards to aggregate the data already present in the organization. This allows them to monitor key issues.
Culture
“How do you help a CCO… to help bring institutional justice and fairness leading to trust and a better culture to an organization?” Tom asks Stephen. Most compliance programs don’t focus on the ethics or culture side, Stephen admits. However, building an ethical culture and giving your employees the tools to speak freely, does more to protect your company than a compliance program in the long run. “Ethical leadership is the best compliance program that you could put in place,” Stephen argues.
Resources
Stephen Martin on LinkedIn
In the Episode, I visit with Podfest Expo founder Chris Krimitsos about the upcoming Podcast Global Summit, March 1-5. Podfest Global Summit is a gathering for those who are passionate about sharing their voice and message with the world through audio and video. Podfest Global has grown into a recurring, must-attend gathering that is now international, drawing creators from all over the world. You will see friendly faces and speakers who are experts in their field, delivering the most valuable, recent content from the virtual stage AND backstage. The programming, exhibitions and networking opportunities make this event a place for developing long-lasting, positive relationships for years to come. Highlights include
- What led to the March event;
- What makes the Podfest Global Summit the most unique event in the podcast arena;
- Why this is a must attend event for any podcaster;
- Be a part of this Guinness World Record setting event;
- Why paying it forward is a key part of the event and how you can do so; and
- Why you should join the Podfest Expo family.
Recourses
Join Tom and others at Podfest Global Summit at any time during March 1-5. Best all of listeners to this podcast can attend at no charge. Register here, using promo code CPN.
In today’s edition of Sunday Book Review:
- Russian Roulette: The Life and Times of Graham Greene-Richard Greene
- Graham Greene-A Life in Letters by Richard Greene
- Between Form and Faith: Graham Greene and the Catholic Novel by Martyn Sampson
- The Life of Graham Greene by Norman Sherry
Categories
Confidence Tricks
Welcome to the latest edition to the Compliance Podcast Network, The Wirecard Saga. In this series, I am joined by Mikhail Reider-Gordon, Managing Director of Institutional Ethics & Integrity at Affiliated Monitors. In this episode, we take a deep dive into the gaps in compliance in not simply Wirecard but in those entities which facilitated Wirecard or did business with Wirecard. Some of the highlights include:
- IC Loses Confidence in Regulators
- Stock Exchange Shrugs
- FREP Head: Rules Don’t Apply To Me
- HÜSt Shocked
- BaFin Economical With the Truth
- Feeble Efforts
- von Knoop’s Social Life in Ruins
- Weiss Sings Like Canary
- Marsalek’s Confidence Trick
- Austria Spies on German MPs
- Schmidbauer Consults
- Novomatic
As the state of Texas goes dark due to cold weather and our jr. Senator Ted Cruz (#CancunTed) heads out to Mexico to get away from it all, Tom and Jay look at this week’s stories top compliance and ethics stories which caught their interest on This Week in FCPA.
- How does weather inform compliance? Tom explores from an undisclosed power and water free location in Texas. Managing Risk, Root Cause Analysis and Continuous Risk Assessments.
- What is the ‘Baader-Meinhof phenomenon’ and how does it inform compliance? Dick Cassin explores in the FCPA Blog.
- Embezzlement and corruption? CISCO discloses both in a filing. Dylan Tokar in the WSJ Risk and Compliance Journal.
- Former Braskem CEO in talks to plead out. Dylan Tokar in the WSJ Risk and Compliance Journal.
- Hiring and screening in a pandemic. Matt Jaye in CCI.
- How does Tom Brady (TB12) inform compliance? Jay explores in this LinkedIn
- Where is SEC enforcement going under Biden. Dylan Tokar in the WSJ Risk and Compliance Journal.
- On The Compliance Life, Natalia Shehadeh, CCO at ABB joins me this month. In the first episode, Natalia explained why she choose the compliance profession. Check out the Episode 1 and Episode 2. In Episode 3, Natalia discusses moving into the CCO chair.
- New podcasts out on the Compliance Podcast Network this month. In ComTech, Valerie Charles joins Tom for an exploration of the intersection of compliance and technology. Episode 2 which posted Monday, February 8, featured Parth Chanda, the Skywalker of Compliance. In Big Brains in Compliance, Tom is joined by Stephen Martin to visit with some of the top thinkers and doers in compliance. It premiered February 22. Finally Tom premiers a new video podcast (PodTube) on YouTube. The Compliance Handbook, a podcast on the nuts and bolts of compliance. In Episode 1, he is joined by Stephen Martin to talk about how to best think through a comprehensive compliance program. In Episode 2, Tom was joined by Mike Volkov to discuss the Board’s role in Compliance.
- A new AMI podcast is out, Integrity Through Compliance. It will have AMI’s expert observations and guidance in the fields of ethics, antitrust, healthcare, government contracting, corporate governance, cybersecurity, construction, telecommunications, consumer protection and more. In the Episode 1, AMI founder Vin DiCianni visits with AMI MD Jerry Coyne the future of telehealth & home healthcare during a pandemic and beyond. In Epsiode 2, Brenda Morris and Dionne Lomax visit with Jennifer Newton. In upcoming Episode 3 on February 24, Joseph K. West, Partner & Chief Diversity and Inclusion Officer, Duane Morris joins the podcast.
- On Thursday, February 25, join the “Ask an Expert FINQuiry” webinar on DOLFIN: K2 Integrity’s financial crimes compliance experts will respond to your AML/CFT, sanctions, and other financial-integrity-related questions. Information and Registration here.
- Join the Baker Tilly Fraud 1st Annual Fraud and Compliance Summit, Tuesday, Feb 23, 2021, to Thursday, Feb 25, 2021. Details and registration here.
- Interested in podcasting? Want to be a part of a Guiness World Record attempt? PodFest Global Summit is a gathering for those who are passionate about sharing their voice and message with the world through audio and video. Join Tom and others at Podfest Global Summit at any time during March 1-5. Best all of listeners to this podcast can attend at no charge. Register here, using promo code CPN.
- Tom announces his latest book, The Compliance Handbook, 2nd edition is available for presale purchase. Use Use the code FOX25 and go here. The Compliance Handbook 2ndedition will be available in both print and eBook editions.
Tom Fox is the Compliance Evangelist and can be reached at tfox@tfoxlaw.com. Jay Rosen is Mr. Monitor and can be reached at jrosen@affiliatedmonitors.com.