In today’s edition of Daily Compliance News:
- M&A is not dead. (FT)
- Businesses worry about opening too soon. (NYT)
- Google institutes KYA. (NYT)
- Who will protect workers? (Houston Chronicle)
Tag: M&A
A company that does not perform adequate due diligence prior to a merger or acquisition may face both legal and business risks. Perhaps most commonly, inadequate due diligence can allow a course of bribery to continue – with all the attendant harms to a business’s profitability and reputation, as well as potential civil and criminal liability. While most compliance practitioners have been long aware of the requirement in the post-acquisition context, the 2012 FCPA Guidance focused many compliance practitioners of the need to engage in robust pre-acquisition due diligence.
This was expanded again in the 2017 Evaluation but the 2019 Guidance made even more clear the need for a robust compliance presence in the pre-acquisition phase. It stated, “A well-designed compliance program should include comprehensive due diligence of any acquisition targets. Pre-M&A due diligence enables the acquiring company to evaluate more accurately each target’s value and negotiate for the costs of any corruption or misconduct to be borne by the target. Flawed or incomplete due diligence can allow misconduct to continue at the target company, causing resulting harm to a business’s profitability and reputation and risking civil and criminal liability.
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.
Welcome to the only roundtable podcast in compliance. Today, we have a quintet of Jay Rosen, Matt Kelly, Sarah Hadden, Jonathan Armstrong and Mike Volkov with a potpourri of topics and commentary on current events from the compliance perspective. Rants and shouts outs follow the commentary for this episode, with one public service announcement from across the pond.
- Mike Volkov takes a deep dive into the debate on whether a Chief Compliance Officer should report to the GC or not. Volkov shouts out to Harvard Law Professor Matthew Stephenson for his great blog site Global Anti-Corruption Blog and specifically his recent blog post, If You Don’t Think Conflicts of Interest Matter, Consider the Kurds.
- Jay Rosen discusses the role ethics and compliance in the Mergers and Acquisition process. Rosen shouts out General James Mattis’ and his remarks at the Alfred Smith Dinner where accepted Trump’s claim he was the ‘most-overrated general’ by noting Trump had said 3-time Oscar winner Meryl Streep was the ‘most-overrated actress.’
- Sarah Hadden takes things a different direction by reading the eBook Trump and Compliance which was published in late 2016 and was based on the Everything Compliance gang’s predictions of how compliance would fare under the Trump Administration. Hadden shouts out to a new section of CCI which will focus on those persons early in their compliance careers. It is certainly a welcome addition to the compliance discussion.
- Matt Kelly provides breaking news by discussing the SEC proposed changes to its Whistleblower Program. Kelly shouts out to Boston Celtic Enes Kantor for calling out the NBA on its hypocrisy on China.
- Jonathan Armstrong discusses the growing tide of US-style class actions coming to the UK and EU around the issue of data breaches under GDPR. Armstrong provides a public service announcement around the perils of using Apple Pay and the failure to Document Document Document.
- Tom Fox rants about the surreal news conference given by Acting Chief of Staff Mick Mulvaney where he (1) admitted the President violated US law in requiring a quid pro quo from Ukraine for the Congressionally mandated US aid package, claiming it was ‘just politics’ and (2) admitted the President violated the Emoluments Clause of the US Constitution by announcing the President had ordered the 2020 G-7 Summit to be held at Trump properties.
Resources:
From Jonathan Armstrong, on the always great Cordery Compliance site:
UK Data Protection Regulator Announces Intention to Fine BA after Data Breach
Life with GDPR – Episode 22 – Morrisons And Vicarious Liability
Client Alert: Doors open for data protection class action as appeal court allows Google claim to proceed?
From Matt Kelly, the coolest guy in Compliance, on Radical Compliance:
SEC Tees up Whistleblower Reforms
From Mike Volkov’s remarks, two articles from Compliance Week (sub req’d)
Point: Why CCOs should report to GC by Jeff Kaplan
Counterpoint: CCO, GC independence is critical by Matt Stankiewicz
From Sarah Hadden, the eBook published by CCI:
Trump and Compliance-the Conversation is Just Getting Started
The members of the Everything Compliance are:
- Jay Rosen– Jay is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
- Mike Volkov – One of the top FCPA commentators and practitioners around and the Chief Executive Officer of The Volkov Law Group, LLC. Volkov can be reached at mvolkov@volkovlawgroup.com.
- Matt Kelly – Founder and CEO of Radical Compliance. Kelly can be reached at mkelly@radicalcompliance.com
- Jonathan Armstrong –is our UK colleague, who is an experienced data privacy/data protection lawyer with Cordery in London. Armstrong can be reached at armstrong@corderycompliance.com
- Sarah Hadden –Publisher at Corporate Compliance Insights. Hadden can be reached at Sarah@corporatecomplianceinsights.com
The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Compliance Evangelist. Everything Compliance is a part of the Compliance Podcast Network.
In today’s edition of Daily Compliance News:
- Trial date set in Theranos criminal trial. (WSJ)
- Deutsche Bank to lay of 20% of workforce. (NYT)
- 86 pounds of drugs found on Brazilian gov plane headed to G20. (Washington Post)
- Shareholders standing up to over-priced M&A deals. (FT)
In this episode I visit with Mark Lanpher, a partner at Shearman & Sterling LLP, practicing in the firm’s White Collar and Regulatory Enforcement group. Lanpher is a former Assistant Chief Litigation Counsel at the SEC. We take a deep dive into the July 2018 change in FCPA Enforcement Policy, announced by the Justice Department creating a safe harbor in mergers and acquisition enforcement actions brought under the FCPA. Some of the highlights from the podcast include:
- How did Matthew Miner’s announcement impact the FCPA Corporate Enforcement Policy re: M&A?
- What were the policy reasons behind the announcement?
- Was Miner’s announcement a codification of DOJ/SEC safe harbor policy first articulated in the 2012 FCPA Guidance?
- How did (or not) Miner’s announcement bring certainty to this area?
- What does it mean going forward?
In today’s edition of Daily Compliance News:
- Judge says Roger Ng in negotiations with the DOJ, although his lawyer denies it. (New York Times)
- Colleges in ‘Willful Ignorance’ of corruption, say it ain’t so. (Law360)
- It’s a bad day when the FT Editorial Board spanks you. (Financial Times)
- Former Danske bank CEO charged in money-laundering scandal? (Reuters)
APRIL 5, 2019 BY TOM FOX
In today’s edition of Daily Compliance News:
- Judge gives SEC and Musk 2 weeks to settle their differences. (New York Times)
- 3 drug companies settle FCA claims for $122MM. (Wall Street Journal)
- 7 key considerations for M&A site visits. (Merrill blog)
- Top 10 most interesting expense reimbursement claims. (Corporate Compliance Insights)