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Compliance Into the Weeds

Compliance into the Weeds: Balt and TradeStation: Lessons for the Compliance Professional

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to explore it more fully. 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 look at the Declination awarded to Balt SAS and the OFAC enforcement action involving TradeStation. 

First, they review a Corporate Enforcement Policy declination for French medical-equipment company BAL SAS and the company’s U.S. subsidiary after self-disclosing, cooperating and remediating misconduct involving a U.S. subsidiary executive and a Belgian consultant allegedly funneling about $600,000 in bribes to a French public hospital official using sham consulting agreements, invoices, and poor documentation; BAL disgorged about $1.21 million in profit on roughly $1.68 million in revenue and disclosed while its internal investigation was still ongoing, raising timing and high-margin red-flag issues.

Second, they cover OFAC’s $1.1 million settlement with TradeStation for accidentally disabling sanctions-screening controls for nearly a year, enabling hundreds of transactions from Iran, Syria, and Crimea; despite having layered tools on paper, IT changes and lapsed subscriptions undermined those controls, underscoring the need for ongoing monitoring, testing, and auditing.

 Key highlights:

  • Balt FCPA Case
  • Disclosure Timing
  • Profit Margin Red Flags
  • Controls and France Angle
  • TradeStation Overview
  • How Screening Failed
  • Monitoring and Accountability
  • Costs and OFAC Lessons

Resources:

Matt in ⁠Radical Compliance⁠

Tom in the ⁠FCPA Compliance Report⁠

Tom  

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A multi-award-winning podcast, Compliance into the Weeds was most recently honored as one of the Top 25 Regulatory Compliance Podcasts, a Top 10 Business Law Podcast, and a Top 12 Risk Management Podcast. Compliance into the Weeds has been conferred a Davey, a Communicator Award, and a W3 Award, all for podcast excellence.

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Blog

Balt’s DOJ Declination: A Case Study in Why Speed, Cooperation, and Remediation Still Matter

The Justice Department’s first publicly announced resolution under its new Department-wide Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP) offers corporate compliance officers a practical roadmap: disclose early, cooperate fully, remediate credibly, and be prepared to help prosecutors hold individuals accountable.

Some enforcement actions feel like one-off events. Then others operate like a flare shot into the compliance sky. The DOJ Declination involving French medical device company Balt SAS and its US subsidiary Balt USA (collectively ‘Balt) falls squarely into the second category.

Why? Because this was not simply another FCPA matter. It was the first publicly announced corporate resolution under the DOJ’s new CEP, and DOJ clearly meant it to send a message to the market. As the Wiley alert noted, the Balt matter demonstrates the benefits available to companies that voluntarily self-disclose, fully cooperate, and timely remediate, while also reinforcing DOJ’s emphasis on individual accountability. For compliance officers, that makes Balt important far beyond the four corners of the case itself.

What happened at Balt?

According to the Declination, Balt paid approximately $602,000 in bribes from around 2017 to 2023 to a physician who held a senior role at a state-owned public hospital in France to obtain or retain business. The payments were routed through a third-party consultant in Belgium, with fake invoices and purported bonus payments used to conceal the true nature of the transaction. The scheme generated roughly $1.68 million in revenue and approximately $1.214 million in profits for Balt. As Matt Kelly reported in Radical Compliance, the scheme involved all the old FCPA classics: sham consulting arrangements, fake invoices, and off-channel communications. That alone would have made the matter notable. But the more important point is what happened after Balt discovered the misconduct.

DOJ declined prosecution because Balt self-disclosed while its internal investigation was still ongoing; provided full and proactive cooperation; engaged in timely and appropriate remediation, including disciplinary measures and termination of tainted business relationships; and presented no aggravating circumstances sufficient to disqualify it from a Part I declination. DOJ also required Balt to disgorge approximately $1.2 million and noted that the company had entered into a parallel resolution in France that included compliance requirements. This is the template. And compliance officers should study it carefully.

The real lesson: self-disclosure means before you know everything

One of the most significant points in the Balt matter is timing. Balt disclosed the issue during an ongoing internal investigation, which strongly suggests the company came in before every fact had been nailed down.

That matters because many companies still hesitate, hoping to finish the investigation, validate every fact, and package the matter neatly before approaching the OJ. Balt is a reminder that DOJ wants speed and credibility, not perfection. The new policy framework still prizes timely self-disclosure as the clearest route to a declination. Wiley put it plainly: voluntary disclosure still provides the clearest path to that outcome, and delay can preclude eligibility for the most favorable result.

For the Chief Compliance Officer (CCO), this is where judgment, preparation, and governance structure come together. If your escalation protocols are weak, if privilege decisions are muddled, if your triage process is slow, or if your board and senior leadership do not understand the declination calculus, you can lose the timing advantage before the real work even begins. The Balt case is not simply a win for self-disclosure. It is a win for pre-existing readiness for investigation.

Cooperation means more than being polite

The second lesson is equally important. Under the CEP, cooperation is not a vague aspiration. It is an operational requirement. The Wiley analysis emphasized that full cooperation includes identifying all individuals involved in or responsible for the misconduct and providing facts and evidence concerning their conduct.

This is where compliance officers need to understand a hard truth. DOJ is not offering declinations because it has become sentimental, or even because this administration does not believe in the FCPA. It is offering incentives because it wants something in return. And one of the most important things it wants to do is help build cases against culpable individuals.

That is precisely what happened here. DOJ paired Balt’s declination with indictments of two individuals allegedly involved in the bribery scheme. Wiley correctly described the sequencing as no coincidence, but rather a reinforcement of the DOJ’s continuing focus on individual accountability. Kelly made the same point in even more direct terms: from DOJ’s perspective, if a company voluntarily self-discloses, coughs up illicit proceeds, and helps prosecutors hold wrongdoers accountable, the company can receive a declination.

For compliance professionals, this means internal investigations must be designed from the outset with evidentiary rigor. You need documentation discipline. You need clear interview protocols. You need a defensible record of who knew what, who approved what, and how the misconduct moved through the system. A half-hearted review that avoids hard questions about executives, consultants, or favored business relationships will not get you where Balt got.

Remediation is not a slide deck

The third lesson is on remediation. Too many organizations still treat remediation as presentation theater. They produce a deck, revise a policy, hold a training session, and call it transformation. The DOJ is looking for something more concrete. In the Balt Declination, remediation included disciplinary action against relevant individuals, termination of business relationships that gave rise to the misconduct, tailored compliance training for senior management, and improvements to the compliance program and internal controls. That list is worth lingering over. The DOJ did not only want a promise. It wanted decisions. It wanted changed relationships. It wanted management-specific training. It wanted better controls.

This is a point I have been making for 15 years. A compliance program is not judged by what sits in the binder; it is judged by what the company does when the pressure hits. Balt has shown DOJ that when misconduct surfaced, the company acted. That is the difference between a paper program and a living program.

For CCOs, the action item is straightforward. Build remediation plans that can be demonstrated, measured, and explained. Who was disciplined? Which third party was terminated? What internal control was changed? How was senior management retrained? What monitoring now exists that did not exist before? If you cannot answer those questions in concrete terms, you are not remediating. You are narrating.

The shadow issue: aggravating circumstances

There is another important dimension here. Balt qualified for a Part I declination, in part, because DOJ found no aggravating circumstances. But as Wiley noted, that assessment can be highly fact-dependent and may not be obvious in the early stages of an internal investigation. The line between Part I and Part II can, in practice, be subjective and outcome-determinative.

That is a crucial warning for compliance officers. Balt should not be read as a guarantee. It should be read as an incentive structure. Companies must still assess whether the misconduct is egregious or pervasive, whether senior management is implicated, whether the harm is severe, and whether the organization has a recidivist history. Those factors can dramatically change the result. So the compliance officer’s job is not to assume declination. The job is to gather facts rapidly, surface aggravating factors honestly, and help leadership make a disciplined disclosure decision.

The new DOJ Declination policy offers more clarity than many companies had before. But it does not eliminate judgment. It raises the premium on disciplined judgment.

Five Key Takeaways for Chief Compliance Officers

  1. Build a rapid disclosure protocol now. Balt’s outcome underscores that early self-disclosure, even during an ongoing investigation, can be decisive. Delay can cost you the best available resolution.
  2. Design investigations to identify individuals from day one. The DOJ expects cooperation to include facts about responsible individuals, not just corporate-level summaries.
  3. Make remediation provable. Discipline wrongdoers, terminate tainted relationships, retrain management, and strengthen controls in ways you can document and explain.
  4. Assess aggravating factors early and honestly. The Part I versus Part II distinction may turn on pervasiveness, seriousness, harm, and recidivism. Do not assume a declination path without a hard-eyed assessment of the facts.
  5. Train leadership that declinations are earned, not granted. Balt is a roadmap, not a safe harbor. The organizations that benefit will be the ones prepared to act with speed, rigor, and credibility.

What Balt means for the compliance profession

The Balt Declination is a policy statement in the form of a case. The DOJ is telling companies: we will reward timely self-disclosure, meaningful cooperation, and real remediation. But we will also pursue individuals. That combination is not new in spirit, but it is now being presented with renewed clarity under the new CEP. For corporate compliance officers, the message is not to wait for an issue and hope for good instincts in the moment. The message is to prepare now.

You need escalation protocols that move fast. You need investigation readiness. You need decision trees for voluntary disclosure. You need board education on what DOJ is rewarding and why. And you need remediation mechanisms that produce evidence, not adjectives.

Balt did not receive a Declination because the misconduct was trivial. It received a Declination because, once the misconduct came to light, the company appears to have done the things the DOJ has been asking companies to do for years. That is the real lesson.

In 2026, compliance officers should read the Balt matter not as an outlier, but as a stress test. If your company found a credible FCPA issue tomorrow, could you move quickly enough, investigate thoroughly enough, cooperate meaningfully enough, and remediate credibly enough to make a Balt-style pitch to DOJ?

That is the question. And the answer should shape your compliance program today.

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Daily Compliance News

Daily Compliance News: March 17, 2026, Is the DOJ Corrupt? Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day, we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top stories include:

  • Cyber hacks and Iran. (WSJ)
  • Madagascar’s ABC chief appointed PM. (DM.COM)
  • BoA settles Epstein victims’ lawsuit. (FT)
  • Was there corruption involved in the Live Nation settlement? (BIG)
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Daily Compliance News

Daily Compliance News: March 16, 2026, The Fighting Corruption ‘Not Worth It’ Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day, we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top stories include:

  • Rapper who fought corruption set to become Nepal’s PM. (CNN)
  • EDNY says fighting the appeal of the FIFA corruption case is not worth the resources. (Reuters)
  • UBS settles long-running whistleblower case. (Reuters)
  • Judge questions DOJ’s decision to drop Halkbank AML case. (Bloomberg)
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FCPA Compliance Report

FCPA Compliance Report: SDNY’s New Policy on Declinations

In this episode, Tom Fox welcomes back Hughes Hubbard partner Mike DeBernardis to discuss the Southern District of New York’s new corporate enforcement voluntary self-disclosure program for financial crimes and why SDNY leadership, including Jay Clayton, likely issued it: to encourage self-disclosure that saves enforcement resources and supports DOJ’s focus on individual accountability.

They compare the policy to the (former) DOJ’s Corporate Enforcement Policy, highlighting notable distinctions such as SDNY’s narrower scope (financial/market integrity offenses) and a revised approach to aggravating factors that excludes common CEP considerations like seriousness, pervasiveness, and senior management involvement, while carving out categories including foreign bribery and sanctions evasion, potentially reducing forum shopping. They also examine a “conditional declination” within two to three weeks, its implications for investigation speed and timeliness, and added pressure from whistleblower programs and compressed internal triage timelines.

Key highlights:

  • Why SDNY Issued It
  • SDNY Significance
  • Aggravating Factors Shift
  • Does It Move Needle
  • Conditional Declination Speed
  • Whistleblowers and Pressure

Resources:

 Hughes Hubbard and Reed

Mike DeBernardis on LinkedIn

Tom Fox

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For more information on the use of AI in Compliance programs, my new book, Upping Your Game, is available. You can purchase a copy of the book on Amazon.com

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2 Gurus Talk Compliance

2 Gurus Talk Compliance – Episode 72 – The Kristy in London Edition

What happens when two top compliance commentators get together? They talk compliance, of course. Join Tom Fox and Kristy Grant-Hart in 2 Gurus Talk Compliance as they discuss the latest compliance issues in this week’s episode!

Stories this week include:

  • What did the FCPA pause do? (JustSecurity)
  • Wells Fargo is free from the Consent Order. (WSJ)
  • Senator flags White House corruption for betting markets. (Decrypt)
  • A DOJ lawyer quit before the hearing on the use of false AI-generated cases. (Bloomberg-Law)
  • DOJ wants authority over state bar discipline. (NYT)
  • Discussion: SCCE Europe Keynote
  • Target’s ICE Arrests Expose the Gap Between Legal Compliance & Duty of Care – Corporate Compliance Insights
  • Dems Propose ‘FCPA Reinforcement Act’ – Radical Compliance
  • International agents take down major site where criminals traded stolen corporate info – Compliance Week
  • Woman Dressed In Hot Dog Costume Busted For Toilet Paper Caper – The Smoking Gun

 Resources:

Kristy Grant-Hart on LinkedIn

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Daily Compliance News

Daily Compliance News: March 13, 2026, The Unfair Trade Practices Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day, we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top stories include:

  • Trump Administration says tariff refunds ‘will take years”. (NYT)
  • Anthropic has a strong case against the ‘Supply Chain Risk’ listing. (Reuters)
  • Collapse of the DOJ white-collar prosecution practice. (BloombergLaw)
  • Trump Administration to investigate Section 301 UTPs. (WSJ)
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Compliance Into the Weeds

Compliance into the Weeds: Carrots and Sticks in Washington: Antitrust Whistleblowers and an FCPA SOL Extension

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to explore it more fully. 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 look at two recent developments sending a common message to compliance teams.

First, DOJ antitrust official Daniel Glad warns that a new Antitrust Whistleblower Awards program and increased pursuit of prison time for individuals compress companies’ timelines to investigate and self-disclose, because insiders may report first and cost those firms potential leniency. Second, Senate Democrats, led by Elizabeth Warren, propose the FCPA Reinforcement Act to extend the FCPA statute of limitations from five to 10 years, creating an eight-year window, with the aim of preserving future enforcement capacity for misconduct occurring now. They connect these “sticks” with “carrots,” such as fast declinations for self-disclosure, emphasizing the need for robust compliance programs, a strong reporting culture, prompt investigations, and clear decisions on disclosure, regardless of who controls Washington.

Key highlights:

  • Two Washington Signals
  • Antitrust Whistleblower Push
  • FCPA Reinforcement Act
  • Carrots, Sticks, and Culture
  • Why Internal Reporting Matters
  • Self Disclosure Through Line

Resources:

Matt in Radical Compliance here and here

Tom

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A multi-award-winning podcast, Compliance into the Weeds was most recently honored as one of the Top 25 Regulatory Compliance Podcasts, a Top 10 Business Law Podcast, and a Top 12 Risk Management Podcast. Compliance into the Weeds has been conferred a Davey, a Communicator Award, and a W3 Award, all for podcast excellence.

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Daily Compliance News

Daily Compliance News: March 5, 2026, The DOJ and State Bars Edition

Welcome to the Daily Compliance News. Each day, Tom Fox, the Voice of Compliance, brings you compliance-related stories to start your day. Sit back, enjoy a cup of morning coffee, and listen in to the Daily Compliance News. All, from the Compliance Podcast Network. Each day, we consider four stories from the business world, compliance, ethics, risk management, leadership, or general interest for the compliance professional.

Top stories include:

  • Regulators need to catch up on private credit risk. (WSJ)
  • DOJ wants authority over state bar discipline. (NYT)
  • Head of UK police union arrested for corruption. (TheGuardian)
  • When part of compliance moves to protection. (FT)
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Compliance Into the Weeds

Compliance into the Weeds: SDNY’s New Declination Policy: Crime Categories, Cooperation, and Compliance Implications

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to explore it more fully. 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 look at the recently announced new Southern District of New York standard for Declinations.

They look at SDNY U.S. Attorney Jay Clayton’s newly released self-disclosure/cooperation/declination policy and its implications for corporate compliance. While the core elements, prompt voluntary disclosure, cooperation, remediation, and restitution, mirror existing DOJ expectations, they highlight a significant change: SDNY now treats “aggravated circumstances” as certain categories of crimes that are categorically ineligible for declinations, including foreign corruption/FCPA, sanctions evasion, terrorism, sex trafficking with minors, smuggling, drug cartels, and forced labor, rather than focusing on offense traits such as senior management involvement or recidivism. They note potential inconsistencies with DOJ’s corporate enforcement approach, uncertainty about disclosure timing despite references to promptness and pre-investigation disclosure, broad discretion in enforcement, and the risk of forum shopping.

Key highlights:

  • Why SDNY Declinations Matter
  • Clayton Policy Key Changes
  • Aggravated Circumstances Redefined
  • FCPA Carve Out Confusion
  • Timing and Disclosure Pressure
  • Cooperation Restitution Disgorgement

Resources:

Matt in Radical Compliance

Tom in the FCPA Compliance and Ethics Blog

Tom

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A multi-award-winning podcast, Compliance into the Weeds was most recently honored as one of the Top 25 Regulatory Compliance Podcasts, a Top 10 Business Law Podcast, and a Top 12 Risk Management Podcast. Compliance into the Weeds has been conferred a Davey, a Communicator Award, and a W3 Award, all for podcast excellence.