The award winning, 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. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode of Compliance into the Weeds, Tom Fox and Matt Kelly discuss the NBA’s sanctions against the Los Angeles Clippers for a salary-cap circumvention scheme tied to Kawhi Leonard.
In this delicious set of compliance imbroglios, senior management including owner Steve Ballmer allegedly arranged sham endorsement deals with four business partners and offsetting Clippers business to funnel about $18 million in extra compensation, plus improper payment of Leonard’s personal expenses. Tom and Matt review the Wachtell Lipton 36-page investigation detailing sparse contracts, unusual counterparties, rapid deal timing, and incriminating emails (including from Gillian Zucker), along with recidivism after a similar 2019 violation. Penalties include a $30 million team fine, Leonard’s $700K fine, loss of first-round picks for five years, and suspensions for Ballmer, Zucker, and the basketball operations executive. All the while Ballmer denies wrongdoing and claims the Clippers will file an appeal. They highlight contract-management and third-party due diligence lessons from FCPA-style guidance, the need to analyze patterns across multiple agreements, and the value of strong compliance roles in pro sports.
Key Highlights
- NBA Scandal Overview
- How The Scheme Worked and Why Salary Caps Matter
- Sham Contracts = Red Flags
- Paper Trail And Intent
- Recidivism And Tone At Top
- Contract Patterns Lessons
Resources
Matt in Radical Compliance
Tom in the FCPA Compliance and Ethics Blog
Tom
A multi-award winning podcast, Compliance into the Weeds was most recently honored as one of a Top 25 Regulatory Compliance Podcast and a Top 10 Business Law Podcast, and a Top 12 Risk Management Podcast. Compliance into the Weeds has been conferred a Davey, Communicator and w3 Award, all for podcast excellence.