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Daily Compliance News

Daily Compliance News: June 3, 2023 – The It’s Going to be Bad 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.

Stories we are following in today’s edition:

  • Ja Morant punishment is to be levied after NBA Finals. (ESPN)
  • The law department of the future. (WSJ)
  • A white-collar prison in El Salvador? (Reuters)
  • Ex-Novartis execs cleared in Greece. (Fierce Pharma)
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FCPA Compliance Report

Ethics Madness 2023

Welcome to the award-winning FCPA Compliance Report, the longest-running podcast in compliance. This episode was recorded during March Madness, the return of Jason Meyer and Tom For Ethics Madness. In Ethics Madness, dive into the ethical questions surrounding the University of Alabama basketball team and their missteps in handling incidents involving their players. In this exciting podcast, the hosts discuss the possibility of redemption for individuals who have committed past indiscretions and how companies must vet their employees for a better work environment. They also cover topics such as mental health, the importance of diversity, equity, and inclusion in the workplace, and how companies should embrace ESG for a better business process. You’ll also hear insightful interviews with professionals on compliance and ethics education and enjoy fun segments like the Compliance Anthem of the Week. Don’t miss out on this amazing podcast that will inspire and educate compliance and ethics professionals. 

Key Highlights

·      Ethics in Sports: University of Alabama Basketball

·      Can you love art but not artists?

·      Redemption for unethical behavior in sports

·      The Power of Forgiveness & Reputation Management in Sports

·      Mental health in the compliance profession

·      Political Pressure on DEI Programs in the Southern States

·      Fostering DEI in Organizations

·      Core values and politics in universities & ESG betting

·      ESG in Energy Business Processes

·      Ivy League success in March Madness

·      Professional skepticism and NCAA tournament predictions

 Notable Quotes

“Should I feel guilty that I put the tide in my bracket?”

“Even energy companies are doing ESG. Why? Because they see it in their self-interest.”

“Spending more time and more attention now helping organizations with including and engaging with the neurodivergent people in their workforces and trying to involve those workers in ethics compliance, and that’s been fascinating work as well.”

“And to me, Tom, this debate feels like a debate at the core of ethics and compliance because this is an example of some core values.”

Resources

Jason Meyer on LinkedIn

The Eight Mindsets Podcast on Spotify

Tom Fox

Instagram

Facebook

YouTube

Twitter

LinkedIn

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Daily Compliance News

March 16, 2023 – The Sell or Else 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.

Stories we are following in today’s edition of Daily Compliance News:

  • TikTok told to divest or face US ban. (WSJ)
  • Ja Morant was suspended for 8 games. (ESPN)
  • CitiGroup makes a downward adjustment to exec salary. (Bloomberg)
  • Carrie Tolstedt pleads guilty? (Reuters)
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Blog

The Nets and a Failure of Corporate Culture

What is corporate culture? What are ethical values? What is integrity at your organization? All of these questions are critical to the success of any business. Unfortunately, we usually see the answers to these questions play out in the negative. This week the Brooklyn Nets hit the trifecta of negative answers to all the above.

It all started out with a tweet from that noted freethinker (i.e., flatworlder & anti-vaxxer) Kyrie Irving who, according to Rolling Stone magazine, took to Twitter to boost a movie and book, Hebrews to Negroes, stuffed with antisemitic tropes. The movie espouses ideas in line with more extreme factions of the Black Hebrew Israelites, which have a long history of misogyny, homophobia, xenophobia, Islamophobia, and especially antisemitism. If that was not bad enough, when asked to explain himself in a post-game press conference, Irving was shocked, shocked that anyone would question him, saying according to ESPN, he “does not believe he did anything wrong in promoting an antisemitic film and book on his social media accounts.”

The condemnation was swift from the Nets and other National Basketball Association (NBA) players. According to Rolling Stone, as an organization, “The Brooklyn Nets strongly condemn and have no tolerance for the promotion of any form of hate speech. We believe that in these situations, our first action must be open, honest dialogue. We thank those, including the ADL, who have been supportive during this time.” The Nets owner Joe Tsai also issued a statement Friday night on Twitter expressing, “I’m disappointed that Kyrie appears to support a film based on a book full of anti-Semitic disinformation. I want to sit down and make sure he understands this is hurtful to all of us, and as a man of faith, it is wrong to promote hate based on race, ethnicity or religion.” He added, “This is bigger than basketball.”

Nets (then-more on that below) coach Steve Nash said in Basketball News, “”I just hope that we all go through this together,” Nash said before the Nets game against the Indiana Pacers. “There’s always an opportunity for us to grow and understand new perspectives. “I think the organization is trying to take that stance where we can communicate through this. And try to all come out in a better position and both more understanding and more empathy for every side of this debate and situation,” Nash added.”

According to SI.com, “the Inside the NBA crew of Ernie Johnson, Charles Barkley, Kenny Smith and Shaquille O’Neal had strong opinions on the” tweet and events.  “Barkley and O’Neal didn’t pull any punches in ripping Irving, with both hosts referring to him as “an idiot.” Barkley expressed his disappointment that the NBA didn’t suspend Irving, while Shaq called out Irving.”

What does a company do when one of its top producers lays out an antisemitic tweet? Why of course it fires the coach. Of course, the Nets said was it was based on the team’s abysmal start. GM Sean Marks said, “a change is necessary at this time. ESPN noted “it’s exceptionally rare for an NBA coach to be let go on a game day, much less roughly 12 hours after a win (the Nets beat the Indiana Pacers 116-109 on Monday night). Marks explained the business decision had been in the works for days. If the timeline he refers to here is accurate, these conversations would have actually started only a few days into the 2022-23 regular season.” Although Marks said the players had no input into the decision to fire Nash, nothing gets done on the Nets without the input of its star player Kevin Durant. In other words, Irving puts out an antisemitic tweet and the coach is fired. All of that sounds like NCAA enforcement back in the day where when Ohio State was caught violating the recruiting rules, Western Kentucky got put on probation.

But it even gets worse from a culture, reputational and integrity perspective next. Apparently, the Nets are aiming to hire the suspended Boston Celtics head coach Ido Udoka. Udoka was suspended before the season started, according to The Athletic for “having an intimate relationship with a female member of the Celtics organization. The Celtics front office determined Udoka’s actions were unacceptable, and he was unfit to coach the team he had just led to the NBA Finals. They suspended the second-year coach for the entirety of the 2022-23 season.”

The Athletic (and even WOJ) reported that Udoka is on the verge of being awarded the same job in a different organization, not even two months into his suspension. The article went on to ask, “And what about the Nets? Did they even think about the women who work in their organization and how they would be affected by such a hire? Hiring Udoka is a slap in the face to all of those women and women everywhere.”

What is the culture of the Nets? I went to the Nets website to review their Code of Conduct but it is entitled, NBA Fan Code of Conduct. No policy on harassment, discrimination or anything else. Even the Houston Astros had a policy against abuse towards women when they decided it only applied to Astros players and not players from other teams when they traded for Roberto Osuna.

Where is the NBA in all of this? Nowhere to be seen apparently. Once again, I went to the NBA website and no public facing Code of Conduct for itself or its teams.

What does all of this say about the culture, ethics and integrity of the Net? I will leave you to conjugate on that question. What would you do when a top producer violates an accepted norm by supporting a clearly antisemitic movie? Do you think he can claim that there was nothing in the Code of Conduct about it as the Nets apparently have no Code of Conduct? What does it say about its romancing of a new head coach who is currently under suspension for having an inappropriate relationship with a female team employee that the Celtics considered a violation of the team’s organizational guidelines. What will it mean for female employees? Will or even can they ever trust him?

And everyone thought the culture of the Washington Football Team was the worst in sports.

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From the Editor's Desk

October and November in Compliance Week

Welcome to From the Editor’s Desk, a podcast where co-hosts Tom Fox and Kyle Brasseur, EIC at Compliance Week, unpack some of the top stories which have appeared in Compliance Week over the past month, look at top compliance stories upcoming for the next month, talk some sports and generally try to solve the world’s problems.

In this month’s episode, we look back at top stories in CW from October around the Lafarge criminal action, the former Uber CISO convicted criminally for attempting to hide a data breach, and the agreement between Google and the DOJ for the company to create a position of a legal compliance monitor. We previewed some of the stories CW will look at in November, including the current state of SEC rulemaking, and Kyle teased out some findings from the CW ‘Inside the Mind of the CCO’ survey, which recently concluded.

We conclude with a look at some of the top sports stories, including a look at a Red Sox fan’s view of the 2022 World Series, ask about a quarterback controversy in New England and overreact to the first week of the NBA season.

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Blog

Fighting Transparency and Whistleblowers

We sadly had two more examples of how companies are fighting transparency and the light of day through actions taken against whistleblowers. With these two examples we see once again how businesses which say they have a speak up culture and an open-door policy in writing do not seem to follow these prescriptions in practice. One comes from the world of sports (NBA basketball) and the second involves Exxon Mobil Corporation (Exxon).

If you are any kind of pro basketball fan, you have heard about the ‘altercation’ between Golden State Warriors Draymond Green and Justin Poole. Following an initial report of an ‘altercation’ occurring during a practice this week, TMZ released a video of the incident. After some unknown verbal sparring, Poole pushes Green away from him. Green then winds up and coldcocks Poole, knocking him down. Green’s initial response was essentially, I am sorry you are sorry. After the video was released, Green fully apologized and announced he was taking some time off.

What was the Warriors response to all this? According to ESPN, the public airing of the video and ensuing transparency, “has impacted the way the team has been able to move forward from the altercation. “In 32 years, I’ve probably seen 20-plus fights. It should not make it out of our walls,” Kerr said. “When things are kept internally, it’s almost easy to handle,” he continued. “As soon as things are leaked, all hell breaks loose. That affects every single player, coach. … It’s like if you had a camera in your family and there was a family dispute. Would you really want to discuss it with the world? No.”” According to Fox Sports, “the Warriors are taking “every legal course of action” to discover how the video was released to the public.”

For those NBA fans who do not remember, Laker Kermit Washington severely injured Rocket Rudy in 1978 with a similar punch to the face. So, this is not a ‘boys will be boys’ or a hyper competitive player dancing on the edge issue, but a full personal safety at work issue. What do the Warriors want too about it? Apparently not much as Outkick.com wrote, “Warriors general manager Bob Myers discussed the situation on Thursday. He stated that Green’s punishment would be “dealt with internally,” with little expectation for the 10-year veteran to miss any games in the upcoming season as a result. “There’s nothing that warranted the situation yesterday. I want to make that clear. It’s also something we feel like won’t derail our season and that’s with Draymond a part of that,” Myers told reporters.”

In a case from the more traditional corporate world, involving Exxon. The Wall Street Journal (WSJ) reported, “The Labor Department said it found Exxon Mobil Corp. illegally fired two company scientists over suspicions they shared information with The Wall Street Journal about concerns the pair had earlier raised with the company. The department’s Occupational Safety and Health Administration on Friday said Exxon must reinstate the two employees and pay them more than $800,000 in back wages, interest and damages.” In other words, Exxon has been found to have fired two whistleblowers.

The WSJ further noted, “Citing current and former employees, the Journal reported in September 2020 that some staff assigned to the Permian, the most active U.S. oil field, thought Exxon had been overly optimistic about an earlier projection it could increase oil and gas production in the New Mexico and West Texas region to 1 million barrels of oil equivalent per day as early as 2024. The people told the Journal that Exxon had overestimated how quickly it could drill wells there, which they said led the company to overvalue the asset by billions of dollars. Exxon later fired two scientists. The Labor Department determined the firings were prompted by Exxon’s suspicions the pair had brought information to the Journal.”

“Exxon denied the allegations at the time and has repeatedly said it has met and exceeded its drilling targets.” The WSJ went on to note, “Exxon claimed it had fired one of the scientists for mishandling proprietary information and another for “a negative attitude,” job hunting and losing management’s confidence.” Exxon spokesman Casey Norton, as quoted in the WSJ, said, “The terminations in late 2020 were unrelated to the ill-founded concerns raised by the employees in 2019.” Exxon has said that it will appeal.

Interestingly, in 2021, the WSJ “reported the Securities and Exchange Commission launched an investigation following an employee’s whistleblower complaint alleging the company’s overvaluation of the Permian had misled investors. The agency earlier this year closed the investigation and said it would not recommend an enforcement action against Exxon.” Additionally, “A federal judge in Texas dismissed a lawsuit last week brought by Exxon shareholders alleging the company misled investors about the value of its Permian assets. The judge determined the plaintiffs had not shown enough evidence that Exxon executives deliberately defrauded investors. The judge said they can refile the complaint with additional evidence.”

It is not clear if there was new evidence brought forward in this OSHA case that was not available to the SEC or federal district court. Perhaps OSHA found Exxon’s version of events not plausible. Nevertheless, coupled with the Warriors response to the leaking of Green punching a teammate, it seems that corporate America will try to prevent transparency at all costs. Compliance professionals would do well to make sure their organizations not simply welcome whistleblowers but embrace them to prevent fraud, waste and abuse and illegal conduct from moving forward in their organization.

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Daily Compliance News

September 22, 2022 the Kraken Released Edition

In today’s edition of Daily Compliance News:

  • Kraken CEO, who attacked his employees, steps down. (NYT)
  • Citigroup offers a work-life balance at half pay. (FT)
  • Canadian company faces corruption charges under CFPOA. (RCMP Press Release)
  • Disgraced Suns owner to sell the team. (Bloomberg)
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Daily Compliance News

September 15, 2022 the Toxic Customers Edition

In today’s edition of Daily Compliance News:

  • Welfare funds for volleyball arena-only in Mississippi. (ESPN)
  • Serial-the power of podcasting. (WSJ)
  • Sun’s owner was suspended, but not sorry. (com)
  • What can you do? (WSJ)
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From the Editor's Desk

May & June in Compliance Week

Welcome to From the Editor’s Desk, a podcast where co-hosts Tom Fox and Kyle Brasseur, EIC at Compliance Week, unpack some of the top stories which have appeared in Compliance Week over the past month, look at top compliance stories upcoming for the next month, talk some sports and generally try to solve the world’s problems.

In this month’s episode, we look back at top stories in CW from May around ESG at FedEx and key enforcement actions. May was also a record month for traffic on the Compliance Week website. Kyle and Tom talk about the recently held Compliance Week 2022 Conference, which took place in DC. We talked about some of the highlights from presentations, from new vendors in the compliance space, and how great it was to be together in person again. Kyle previewed some topics that Compliance Week will report in June, including Return to Work issues from the compliance perspective, coverage of CW 2022, Russia sanctions, and new ideas from the compliance officer think tank held at CS 2022.

We conclude with a look at some of the top sports stories, including the NBA playoffs and the Celtics making it to the 2022 NBA finals. Tom talks about the Nick Saban/Jimbo Fisher feud over college football recruiting, and Kyle reminds us of the Celtics taking the long view on developing talent.