Welcome to the newest addition to the Compliance Podcast Network, Compliance and Coronavirus. As the Voice of Compliance, I wanted to start a podcast which will help to bring both clarity and sanity to the compliance practitioner and compliance profession during this worldwide health and healthcare crisis. In this episode, I am joined by Melissa Koch, co-founder and CEO of InFront Compliance. We visit about the issues she is seeing for FinTech in new normal of Covid-19 and going forward. We also consider the state of New York enforcement action involving First American Title and its implications going forward.
InFront is a next-gen online assessment and reporting platform focused on reducing risk and simplifying compliance for highly regulated entities, such as our nation’s supply chain and financial institutions. Founded by seasoned technology lawyers with a deep understanding of the fast-evolving regulatory landscape, InFront offers a secure digital solution built on extensive expertise and an intuitive interface that is accessible across all stakeholders. You can check out their website, here.
The compliance component of your M&A regime should begin with a preliminary pre-acquisition assessment of risk. Such an early assessment will inform the transaction research and evaluation phases. This could include an objective view of the risks faced and the level of risk exposure, such as best/worst case scenarios. A pre-acquisition risk assessment could also be used as a “lens through which to view the feasibility of the business strategy” and help to value the potential target.
I suggest a four-step process to plan and execute a strategy to perform pre-acquisition due diligence in the M&A context.
- Establish a point of contact.
- Collect relevant documents.
- Review the compliance and ethics mission and goals.
- Review the elements of an effective compliance program.
There are multiple red flags which could be raised in this process, which might well warrant further investigation. They include if the target has ineffective compliance program elements in their compliance program or if there were frequent breach of policies and procedures. Obviously, a target which is in financial difficulty would bear closer scrutiny. Structurally, if the company did not have a formal ethics and compliance committee at the senior management or Board of Directors’ level, this could present issues. From the CCO perspective, if the position did not have Board or CEO access or if there were not regular reports to the Board, it could present an issue for compliance. Conversely, if there were frequent requests to waive policies, management over-ride of compliance controls or no consistent consequence management for violations; it could present clear red flags for further investigation.
Three key takeaways:
- The results of your pre-acquisition due diligence will inform your post-acquisition integration and remediation going forward.
- Periodically review your M&A due diligence protocol.
- If red flags appear in pre-acquisition due diligence, they should be cleared.
Peter Grossman is the co-founder and Chief Strategist of Labyrinth Training, a leading compliance, innovation, and training company that is redefining how compliance and code of conduct training is delivered to employees. They are dedicated to training employees through captivating storytelling. Labyrinth uses award-winning interactive design to bring their clients’ policies to life, which engages the audience and imparts knowledge when they are paying full attention. He joins Vince Walden to discuss the impact storytelling has as a teaching method, and the importance of abandoning the right-wrong answer narrative.
Labyrinth makes each training video specific to each client’s needs and circumstances. Custom-made content has a higher chance of reaching the audience and capturing their attention, as well as ensuring that the delivered training is being retained. A Stanford study showed that creating mini-narratives to memorize something works much better than rote learning.
Labyrinth has made videos about data privacy, compliance, anti-harassment, and even human rights training like debt bondage. There is no magic path your employees can walk through where they won’t encounter threats of corruption, says Peter. If you’re trying to teach a lesson where there’s a good path and a bad path, you’re teaching the wrong lesson.
Resources
Peter Grossman on LinkedIn
LabyrinthTraining.com
In our continuing series, I am joined by Mikhail Reider-Gordon, Managing Director of Institutional Ethics & Integrity at Affiliated Monitors. Mikhail’s areas of expertise include technology, privacy, cybersecurity, IP and accountability in artificial intelligence; the global anti-corruption and anti-money laundering regimes; media & entertainment; biotech and the life sciences; the public sector and international law. She is accustomed to working on extremely sensitive and high-profile matters, both nationally and internationally. In this episode, we explore the money laundering Wirecard engaged in via the project dubbed ‘Hermes’.
Some of the highlights include:
- Weekly news wrap-up on Wirecard.
- What has this done to the German political scene?
- Any talk about BaFin reforms?
- How do losses reach €20bn?
- How was the investigation “unrelated to the mandate”?
- Money laundering through Hermes.
In this episode, we talk about the uncomfortable and sometimes terrifying situation when a compliance officer must critique a member of leadership team and living to tell about it. In recent years, the expression “tone at the top” has been displaced by “conduct at the top” ushering in a new era of leadership accountability and transparency by the DOJ and other enforcement agencies in the U.S. and overseas. As a practical matter, compliance officers must on occasion investigate or critique members of the leadership team when conducting an internal investigation or assessing the ethics and compliance program. Joining me today is Matt Tanzer. For 13 years, Matt held various positions at Tyco including Chief Compliance & Ethics Officer. A position he also held after Tyco was merged into Johnson Controls.
Join us each week as we take a deep dive into the various forms of fraud across the world and discuss crime families, penny stock boiler rooms, international money launderers, narco-traffickers, oligarchs, dictators, war lords, kleptocrats and more.
Scott Moritz is a leading authority on white-collar crime, anti-corruption, and in the evaluation, design, remediation, implementation, and administration of corporate compliance programs, codes of conduct. He is also considered an authority in the establishment, training, and oversight of the investigative protocols carried out by financial intelligence, corporate security, and internal audit units.
Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley.
In this episode of Great Women in Compliance, Lisa speaks with Danielle Cannata, who is senior counsel at SABIC, which is the Saudi Basic Industries Corporation. In her role, she is responsible for the company-wide Compliance Program and monitoring and promoting compliance at SABIC.
Danielle is also an advocate for women around the world. In particular, she is one of the co-chairs of the of the Integrity and Compliance Taskforce for the B20, which convenes before the G20, and where the B20 taskforce will present a report to the G20 Presidency.
Danielle will talk about her work on the task force, and specifically about the recommendations for women and recommendations and tools for women to address and report wrongdoing. She also provides her perspective on working in a global role and working with Saudi and the Middle East over her 12 years at SABIC.
Join the Great Women in Compliance community on LinkedIn here.
Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. In this episode Matt and Tom go into the weeds to look at the recent fine of $400 million against Citibank for its poor risk management process. Some of the issues we consider are:
· Four areas of concern(1) Poor ERM; (2) Poor compliance; (3) Poor internal controls; and (4) Data governance.
· How the OCC Order is an audit road map.
· What does that mean for compliance on the Board?
· Did the OCC push out Michael Corbat?
· Focus on the ERM Blueprint.
Resources
See Matt’s blog posts on Radical Compliance-Citigroup’s Governance Issues, Part 1 and Citigroup, Part 2-Better ERM Program
Brian and Tim drop the gavel to render verdicts on the litigation impacting the TikTok and WeChat bans and a lawsuit challenging the legal bases for the new ICC-related sanctions program. We also discuss OFAC’s recent ransomware advisory and give some thoughts on a recent OFAC enforcement action focused on Cuba. Then, in the Lightning Round, we share our initial impressions on brand new U.S. sanctions targeting Iran’s financial sector and dissect the outcome of a lawsuit challenging the foundations of the Commerce Department’s authority to enforce the export controls framework established by the EAR.
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Questions? Contact us at podcasts@milchev.com.
EMBARGOED! is not intended and cannot be relied on as legal advice; the content only reflects the thoughts and opinions of its hosts.
EMBARGOED! is intelligent talk about sanctions, export controls, and all things international trade for trade nerds and normal human beings alike, hosted by Miller & Chevalier Members Brian Fleming and Tim O’Toole. Each episode will feature deep thoughts and hot takes about the latest headline-grabbing developments in this area of the law, as well as some below-the-radar items to keep an eye on. Subscribe for new bi-weekly episodes so you don’t miss out!
Timestamps:
0:10 Introduction and Roadmap
The Rundown
5:38 Quick Check-in on TikTok and WeChat
18:54 Lawsuit Challenging ICC Sanctions
39:36 OFAC and FinCEN Randomware Advisory
53:41 OFAC Settlement with Generali Global
1:01:47 Lightning Round
1:02:05 More Sanctions Coming Against Iranian Banks?
1:12:43 FedEx v. BIS
1:25:21 Final Thoughts
***Stay sanctions free.***