The Biden Administration promised a new, aggressive approach to corporate crime. Well, the Justice Department just delivered a new, comprehensive policy that raises a number of issues, some of which are likely to be controversial. The new policy incorporates reforms announced last October that largely centered on prior corporate criminal and civil records, the appointment of independent compliance monitors, and expanding the review of responsible persons in an internal investigation. The Justice Department’s new Corporate Enforcement Policy (“CEP”), however, expands on earlier policy changes but includes some new and far-reaching reforms intended to increase individual accountability and promote corporate culture through financial incentives and deterrence policies. This last idea is a significant expansion of DOJ’s CEP and is sure to reverberate through the business and compliance community. Chief compliance officers face a new requirement for their companies — creating an effective system of carrots and sticks to punish misconduct and increase rewards for ethical behavior.DOJ’s new CEP also lays the groundwork for further consideration of corporate responsibility for preserving electronic messaging, ephemeral services, and other electronic data. DOJ’s discussion in this area reflects DOJ’s frustration with a corporate internal investigation that omits access to electronic data, especially in those situations where employees use personal devices for business-related communications. The revised CEP provides guidance to prosecutors and the business community to ensure individual and corporate accountability through the evaluation of various factors, including (1) Corporate History of Misconduct; (2) Self-Disclosure and Cooperation; (3) the Strength of a Company’s Compliance Program; (4) the Use and Monitoring of Corporate Monitors (including their selection and scope of a monitor’s work).
Tag: Crime
The Department of Justice and the Securities and Exchange Commission reached a $41 million settlement with GOL Linhas Aéreas Inteligentes S.A. (“GOL”) to resolve criminal and civil foreign bribery charges. GOL entered into a three-year deferred prosecution agreement (“DPA”) with the DOJ in exchange for payment of a $17 million criminal penalty. DOJ credited $1.7 million of that penalty against a $3.4 million fine that GOL agreed to pay law enforcement authorities in Brazil to resolve charges in Brazil. In a separate resolution, GOL agreed to pay the SEC $24.5 million over two years. The SEC’s initial settlement calculation was for $70 million, but it was reduced to $24.5 million based on GOL’s financial condition. Michael Volkov reviews the DOJ and SEC FCPA settlement actions in this episode.
Corporate culture is all the rage now, meaning it is an often used topic to signal commitment, sensitivity to issues of employee concern, and awareness of governance trends. In practice, as we all know, culture is not just about words but about action. As the often repeated phrase goes — talk is cheap. In this Corporate Culture Roundup Episode, Michael Volkov examines some culture-related issues involving: Culture + Action Steps, Civility in the Workplace, and What Happens when HR and Compliance are Disconnected.
The global economy has suffered two significant shocks — first, the pandemic sent shockwaves through every organization, and second, the war in Ukraine. Both of these events exposed the importance of risk management, especially with regard to supply chain and distribution operations. Hence, the renewed focus on third-party risk management and the repetitive description of “holistic” third-party risk management. Reality forces change, and we are now experiencing significant adjustments to overall risk management procedures. At the top of every list has to be third-party risk management beyond legal and compliance risks — we have new disruptive risks that have to be identified, quantified, or ranked and then addressed.
Michael Volkov outlines the new reality and opportunities stemming from holistic third-party risk management in this episode.
In another indication of DOJ’s aggressive approach to enforcement of sanctions against Russia, DOJ announced the indictment of a TV producer for violations of the Crimea-Related Russian sanctions program. As outlined in the indictment, Jack Hanick, a former Fox News executive, was indicted for sanctions violations stemming from his long-time relationship with a prohibited Russian oligarch (Specially Designated National) relating to the creation and promotion of the Russian Television Network.
In this episode, Michael Volkov reviews DOJ’s indictment and the facts surrounding Hanick’s conduct.
