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Daily Compliance News

Daily Compliance News: July 22, 2024 – The Victims’ Families 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 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.

In today’s edition of Daily Compliance News:

    • Boeing victims’ families object to the DOJ monitoring process. (FT)
    • The Zambian President fires the entire anti-corruption board.  (BBC)
    • Alaska judge scandal prompts referral to OIG. (Reuters)
    • MAGA states fight against national AML policies.  (WSJ)

 

For more information on the Ethico ROI Calculator and a free White Paper on the ROI of Compliance, click here.

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Blog

To the DOJ: Think Big and Go Big on the Boeing Monitorship

Perhaps the most significant blog post in the compliance arena was penned by Matt Ellis over 10 years ago when he challenged Walmart to “Go Big” on compliance. (They did.) We are now at another inflection point in compliance but in a very different set of circumstances from Walmart’s breach of the Foreign Corrupt Practices Act (FCPA). It involves the Department of Justice  (DOJ) and its decision on what to do about Boeing Company under the current Deferred Prosecution Agreement (DPA) from the 737 MAX crashes. Today I want to challenge the DOJ to Think Big and Go Big in its approach to dealing with Boeing going forward.

The issue the DOJ is grappling with is whether and how to get Boeing to fix the festering set of problems which led to the 737 MAX disasters and cultural toxicity have continued unabated since the DPA was agreed to by Boeing back in 2021. In May of this year, the DOJ notified Boeing that it was in breach of this DPA for failing “to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations.” Now the DOJ is determining the steps to take.

The families of the victims of the 737 MAX crashes have been the loudest about the need to punish Boeing executives with criminal charges. They met with the DOJ and asked about criminal charges and a massive penalty. Now the DOJ has responded. According to the Wall Street Journal (WSJ), “Under the guilty-plea agreement outlined Sunday to families of the crash victims, Boeing would have to agree to hire an outside consultant to monitor its compliance with safety regulations. It also would pay an additional corporate penalty of about $243 million.”

It is the ‘outside consultant’ where the DOJ needs to ‘Go Big.’ How? By creating the most comprehensive monitoring plan ever used. Why? Because there has never been a corporate case more important to the United States than getting Boeing back on track. This is not a FCPA case where a company has admitted to bribery and corruption, even across the globe. This is not 2008 when banks were ‘too big to fail’. This is something completely different. This is the only major US aircraft manufacturer and one of the two biggest in the world. This is a company that provides products for nearly half of all American as Airlines for Americaestimates that 49% of all Americans flew commercially in 2023. Boeing is estimated to have generated over $77bn in revenue for America alone in 2023.

But Boeing’s importance to America is not simply about economics. Boeing is a key component in US national security. Boeing provides advanced missile defense systems, including the Ground-based Midcourse Defense (GMD) system, which protects the United States from ballistic missile attacks. The company also offers solutions for tracking and monitoring space objects, which is vital for maintaining the safety and security of space operations. Boeing is also a part of the Internal Space Station (ISS), orbital test vehicles and deep space exploration.

In short, there is probably no other single institution as important to the US in manufacturing as Boeing. Nearly 200 million American who fly in Boeing planes are depending on Boeing to get it right. The US (and world) economy need the drive that Boeing provides. The US national security depends on a well-functioning Boeing to lead the technological drive to protect the US for the rest of the 21st century and beyond. Boeing needs to continue its work for our drive as humans into what Gene Roddenberry called ‘space – the final frontier’ as one of the leading companies on space exploration. Finally, and certainly not least, the families of the victims of the two 737 MAX crashes should receive some justice for all they have been through and then seeing Boeing not live up to its agreement in the original DPA.

Most importantly, we all have an interest in Boeing getting its remediation right. Boeing must turn around from a culture where employees are afraid to step forward, there is acceptable slipshod work and work practices, where employees who do report problems are actively harassed, where employees lie and mislead federal regulators over basic safety issues and where the almighty dollar is put so far above safety that literally hundreds of lives are lost. All of this means a monitorship where there are multiple areas monitored, overseen and thoroughly remediated so that they pass the strongest form of testing and controls at the end of a lengthy period (at least 3 years). The Court also needs to stay actively involved in the monitorship, not simply reviewing annual or even greater reporting but testing any claims by Boeing through rigorous data analytics. Boeing has clearly demonstrated it is not capable of turning itself around and a new and daring approach is needed for the company.

I believe the DOJ should appoint an Omnibus Monitor who would oversee multiple monitors in specific subject matter areas. This would be far too big for any one law firm or a single consulting company. The Omnibus Monitor would be in charge of a wide variety of corporate disciplines that Boeing must get right to get out of the terrible corporate fix they find themselves in. What are some of the areas that should have their own monitorship under an Omnibus Monitor? Obviously, safety is at the core but also culture, compliance, Speak Up and Listen Up, Supply Chain, fraud, Export Control, Sanctions. On the overall aircraft manufacturing issues, the DOJ needs to work with the Federal Aviation Authority (FAA) to oversee all of this to meet the FAA regulatory requirements.

This would be by far the biggest monitorship ever because it is by far the most important monitorship ever. Just as Ellis challenged Walmart to ‘go big’ on compliance, I want the DOJ to Think Big and Go Big with an Omnibus Monitor for Boeing. Literally all of America and the world is depending on it.

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Everything Compliance

Everything Compliance: The Perfect Attendance Edition

Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows.

In this episode, we have a quartet of commentators: Jonathan Marks, Matt Kelly, Jay Rosen, and Karen Woody, all hosted by Tom Fox.

1. Matt Kelly takes a deep dive into the seeming lack of corporate monitors in recent FCPA enforcement actions. He rants about yet another KPMG cheating scandal.

2. Karen Woody takes a deep dive into the Panuwat conviction for shadow insider trading.  She shouts out to Caitlin Clark for being the No. 1 pick in the WNBA Draft but rants about her paltry $76K first year salary.

3. Jonathan Marks talks about the current challenges facing Chief Audit Executives. He shouts out to Kevin Ford for working at Burger King for 27 years without missing a day of work.

4. Jay Rosen provides an update on export control. He has a mild  rant about CBS cutting off Billy Joel’s Piano Man encore to cut to local news about the Masters.

5. Host Tom Fox shouts out to Senator Robert Menendez for throwing his wife under the bus by announcing he will claim she is the one who engaged in bribery and corruption, not him.

The members of the Everything Compliance are:

• Jay Rosen – Jay can be reached at Jay.r.rosen@gmail.com

• Karen Woody – One of the top academic experts on the SEC. Woody can be reached at kwoody@wlu.edu

• 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 in London.

• Jonathan Marks can be reached at jtmarks@gmail.com.

The host, producer, and ranter (and sometimes panelist) of Everything Compliance is Tom Fox, the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.

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Great Women in Compliance

Great Women in Compliance – Alejandra Montenegro Almonte on Workplace Culture and Compliance

Welcome to the Great Women in Compliance Podcast. In this episode, Lisa visits with Alejandra Montenegro Almonte, who is a member at Miller & Chevalier and is the Chair of their International Practice and Practice Co-Lead, Workplace Culture. Prior to joining Miller & Chevalier, she was General Counsel for the North American and Latin American Division at Gategroup and an associate at Weil, Gotshal & Manges.  Alejandra has won awards and recognition from Chambers, Best Lawyers in America and Latin America, among others.

In this episode, Alejandra discusses her experience in global ethics and compliance programs, from advising on best practices to workplace investigations.  Alejandra has leveraged her experience in-house and at law firms to provide practical advice and explains her approach to advising clients.

Alejandra also provides insight on her experiences with monitorships, as she has advised clients in monitorships and acted as a monitor.  She talks about the importance of a proactive relationship between the monitor and the organization, as well as some thoughts about best practices for communications and meetings.

She applies a similar set of principles to all of her work, focusing on learning about a business, including its market dynamics and risks, as part of building the best program for that organization.  She uses that as a foundation for her work on program enhancements and on how to conduct workplace investigations.

As this is Women’s History Month, Alejandra provides some ideas on how we can best support women and diversity in our workplaces.

Key Highlights:

  • Building Global Ethics & Compliance Programs
  • Experience in Monitorships as an Advisor and a Monitor
  • Providing Practical Advice on Compliance Risks
  • Cultural Nuances in Global Workplace Dynamics
  • Insights During Women’s History Month

Resources

Join the Great Women in Compliance community on LinkedIn here.

Categories
Everything Compliance

Everything Compliance – Episode 128, The Frozen Edition

Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows. In this episode, we have the quartet of Jonathan Armstrong, Matt Kelly, Karen Woody, and Jay Rosen, all hosted by Tom Fox, joining us on this episode to discuss some of the topics they are watching during this extended cold spell across the US.

1. Matt Kelly looks at the tale of two companies, eBay and SAP, and the disparity in whether monitorships were mandated. He shouts out to Saul Dreier and the Holocaust Survivors Band, who recently played a gig at the White House.

2. Tom Fox shouts out to Sir Elton John for winning an Emmy, thus becoming only the 18th person to hold the prestigious EGOT designation.

3. Jonathan Armstrong looks at the new SFO director and his new focus for the beleaguered agency.  He shouts out to Nick Rossi (or whatever name he is using) and his 16 aliases.

4. Jay Rosen takes a deep dive into the SAP Foreign Corrupt Practices Act enforcement action. He shouts out to the Cara Cara naval oranges.

5. Karen Woody looks at the Segway shareholder case and its duty of oversight analysis for an officer. She shouts out to all the folks in Indiana who work and fix things during a deep freeze and those manning homeless shelters.

The members of the Everything Compliance are:

  • Jay Rosen is Vice President, Business Development Corporate Monitoring at Affiliated Monitors. Rosen can be reached at JRosen@affiliatedmonitors.com
  • Karen Woody is one of the top academic experts on the SEC. Woody can be reached at kwoody@wlu.edu
  • Matt Kelly is the 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 jonathan.armstrong@corderycompliance.com
  • Jonathan Marks can be reached at jtmarks@gmail.com.

The host, producer, ranter (and sometimes panelist) of Everything Compliance is Tom Fox, the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.

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Great Women in Compliance

All Star Women Monitors

Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley.

Today is the first part of a 2-part series that we have been planning for a while, and the timing turned out to be perfect. Lisa is speaking with an all-star panel of Audrey Harris, Bethany Hengsbach and Dionne Lomax,  Managing Directors from Affiliated Monitors.  Audrey’s area is  Global Anticorruption, Compliance, Ethics & Non–Financial Risk, Bethany focuses on Global Corporate Compliance, with a focus on healthcare, and Dionne works in Antitrust and Trade Regulation, as well as being a professor at Boston University.

 In Part 1, we get to hear more about their backgrounds and the road to their current roles.  They also explain more about work as a monitor, including how they are appointed, what they do as monitors, and the field in general.  They also share their experiences in reviewing programs and what impresses them when they are assessing a program, and, conversely, what concerns them.

They also provide advice for women who want to get into the field, and some of the things they have learned.

 The Great Women in Compliance Podcast is on the Compliance Podcast Network with a selection of other Compliance related offerings to listen in to.  If you are enjoying this episode, please rate it on your preferred podcast player to help other likeminded Ethics and Compliance professionals find it.  If you have a moment to leave a review at the same time, Mary and Lisa would be so grateful.  You can also find the GWIC podcast on Corporate Compliance Insights where Lisa and Mary have a landing page with additional information about them and the story of the podcast.  Corporate Compliance Insights is a much appreciated sponsor and supporter of GWIC, including affiliate organization CCI Press publishing the related book; “Sending the Elevator Back Down, What We’ve Learned from Great Women in Compliance” (CCI Press, 2020).

If you enjoyed the book, the GWIC team would be very grateful if you would consider rating it on Goodreads and Amazon and leaving a short review.  Don’t forget to send the elevator back down by passing on your copy to someone who you think might enjoy reading it when you’re done, or if you can’t bear parting with your copy, consider it as a holiday or appreciation gift for someone in Compliance who deserves a treat.

You can subscribe to the Great Women in Compliance podcast on any podcast player by searching for it and we welcome new subscribers to our podcast.

Join the Great Women in Compliance community on LinkedIn here.

Categories
Everything Compliance

Episode 101, the Glencore Edition


Welcome to the only roundtable podcast in compliance as we celebrate our second century of shows. In 2021, Everything Compliance was honored by W3 as a top talk show in podcasting. In this episode, we have the quintet of Jonathan Marks, Karen Woody, Jonathan Armstrong, Tom Fox and Matt Kelly. In this episode, we take up the Glencore FCPA settlement. We conclude with our fan favorite Shout Outs and Rants.

1. Karen Woody takes a deep dive into the history of Glencore, from its founding by Marc Rich in the 1980s through the allegations of bribery, corruption and market manipulation which led to the FCPA and CFTC settlements.  Woody shouts out the US National and state parks systems which provide much needed green spaces for Americans.

2. Matt Kelly takes a deep dive into CCO certification issue and what it might mean for individual CCO criminal liability going forward.  Kelly has a dual shout out and rant. He shouts out to the Boston Celtics for having the greatest NBA Finals-Game 1 comeback to win the game. He rants about the DOJ failing to post the speech by AAG Kenneth Polite where he announced the new requirement for CCO certification.

3. Jonathan Marks explores the role of internal audit in contributing to the compliance failures and what IA can do to facilitate a culture change at the company. Marks also has a dual shout out and rant. He shouts out to the Philadelphia Phillies for firing manager Joe Girardi and rants about Glencore’s Press Release about their updated compliance which he rants “says nothing”.

4. Tom Fox considers the dual monitor aspect of the resolution and the requirements of the monitorships. Fox reads out the names of the students and teachers who were killed in the recent massacre in Uvalde,  TX.

5. Jonathan Armstrong explores the settlement from the UK perspective and considers, what if any charges against individuals that the UK-Serious Fraud Office might bring. Armstrong shouts out to the Queen’s Platinum Jubilee and Sir Andy Murray for speaking out against the murder of school children. Murray is a survivor of a similar event in Scotland.

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
•       Karen Woody – One of the top academic experts on the SEC. Woody can be reached at kwoody@wlu.edu
•       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 jonathan.armstrong@corderycompliance.com
•       Jonathan Marks is Partner, Firm Practice Leader – Global Forensic, Compliance & Integrity Services at Baker Tilly. Marks can be reached at jonathan.marks@bakertilly.com

The host and producer, ranter (and sometime panelist) of Everything Compliance is Tom Fox the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.

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Fraud Eats Strategy

The 3 Regulatory Mandates Banks Fear the Most: Monitorships, Lookbacks and KYC Remediations

Monitorships, transaction lookbacks and KYC remediations are the equivalents of a regulatory vote of no confidence. They can be incredibly disruptive, painful and can cost millions of dollars to implement. They are extreme measures that are taken when regulators have seen no improvement in succeeding regulatory exams or sometimes happen without warning when a criminal investigation reveals how an institution was at the center of a large scale money laundering or dollar clearing criminal enterprise and their anti-money laundering or sanctions compliance program and the controls underlying them failed in spectacular fashion. These epic anti-money laundering failures lead regulators to conclude that the existing program was so ineffective it is highly likely that suspicious activity, possibly a great deal of suspicious activity, has been going on undetected and unreported for a period of years.

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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, warlords, 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.
 

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The Affiliated Monitors Expert Podcast

Cultural Differences in Monitorships


In this podcast, I am joined by Mikhail Reider-Gordon, Managing Director of Global Affairs at Affiliated Monitors. In this episode, we consider the cultural differences between international and US domestic monitorships.
Gordon noted that when structuring a monitorship of an entity or an individual, it can be an unknown. Some of the issues include how to approach and interact with all the stakeholders and how that is organized, as monitorships are heavily impacted by cultural considerations. Gordon stated, “I’ve lived in, worked in numerous countries and I can tell you that those legal processes, there are absolutely important cultural differences that have to be built in. For instance, I’ll take an example here in the US there really is not the same expectation that a corporation will take care of its employees beyond what is required under labor and employment law and safety laws. Yet in many other countries, employers may develop deep personal relationships with employees, really on a level that you and I might associate with familial relationships.” Obviously, this has impacts for monitorships with an international component.
Additionally, there may be separate monitorships from different sets of prosecutors. For instance, the Odebrecht corruption case mandated a US and Brazilian monitor. Gordon said that in such a situation, “as a monitor, we are appointed to help the organization remediate and approve. We need that buy-in, all the stakeholders.” Equally importantly, when a US based monitor is in other countries,  considerations of cultural sensitivities, norms, values, are part and parcel of the design of the monitoring program. There can be “cultural values such as maintaining harmony within the organization, change how we approach interviews, dialogue with employees and managers, building consensus and so on. This can extend to seemingly basic monitoring elements such as asking and receiving questions. It can also be around how poor decisions can even be challenged within the company as in many cultures, they do not embrace challenging management even when employees know that what the managers are doing are violating the law.” All of these factors must be taken into consideration.
For more information on AMI, check out their website. For more information on Mikhail Reider-Gordon, check out her LinkedIn profile.

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Everything Compliance

Episode 70, the Holiday Edition


Welcome to the only roundtable podcast in compliance. Today, we have the full quintet of Jonathan Armstrong, Jay Rosen, Jonathan Marks, Matt Kelly and Mike Volkov for a deep dive into plethora of topics in this special holiday edition. We end with a veritable mélange of rants and shouts outs.

  1. Jonathan Armstrong data privacy issues related return to work in the new year after most employee spent 2020 working from home. Armstrong shouts out the scientist who spearheaded the research which has led to the Covid vaccines.
  1. Jay Rosen looks at what a company needs to do to get through a monitorship. Jay rants about the San Francisco 49ers leaving California to play in one of the country’s biggest Covid-19 hot spots, Arizona.
  1. Matt Kelly considers the changes in enforcement, policy and focus in the SEC and other regulatory agencies under the Biden Administration. Matt shouts out to Georgia Secretary of State Brad Raffensperger who has withstood criminal actions by the Trump Administration to secure a fair vote from Georgia.
  1. Mike Volkov looks at the Vitol FCPA settlement and how it may portend greater inter-agency cooperation in corruption and anti-competitive enforcement actions. Volkov rants about Gary Cohen, former head of Goldman Sachs and his refusal to allow the Goldman mandated clawbacks for the firm’s 1MDB corruption and fraud.
  1. Jonathan Marks looks at Board of Directors and sees the Dunning-Kruger Effect of over confidence and lack of self-awareness in many areas of corporate governance. Marks rants about the NLF not giving a flip about player safety around Covid-19 all the while moving games without any thought to competition.
  1. Tom Fox gives a bittersweet shout out David Prowse who recently died. Prowse was the first actor to play Darth Vader albeit voiced by James Earl Jones. 

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
  • Jonathan Marks is Partner, Firm Practice Leader – Global Forensic, Compliance & Integrity Services at Baker Tilly. Marks can be reached at marks@bakertilly.com

The host and producer (and sometime panelist) of Everything Compliance is Tom Fox the Voice of Compliance. He can be reached at tfox@tfoxlaw.com. Everything Compliance is a part of the Compliance Podcast Network.