Tag: post acquisition integration

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Compliance Into the Weeds

Compliance into the Weeds: New M&A Safe Harbor

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 a subject more fully. Are you looking for some hard-hitting insights on sanctions compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt consider the recent speech by DAG Lisa Monaco, creating a Safe Harbor for M&A under the FCPA and beyond.

The Justice Department has recently unveiled a new policy aimed at fostering cooperation and compliance within the corporate sector, especially during acquisitions. This policy, which offers companies the chance to avoid charges for compliance violations discovered during the acquisition process, has sparked a lively discussion among compliance experts. Matt views this policy with a mix of curiosity and uncertainty. He acknowledges its potential benefits but also raises concerns about its practical execution, particularly in relation to antitrust enforcement and the treatment of companies new to acquisitions.

The application of the policy across various DOJ divisions and its interactions with other enforcement organizations intrigue Tom. He also questions whether acquiring companies will still receive a “free pass” if the acquired company engages in antitrust behavior. To delve deeper into these perspectives and explore the potential implications of this new policy, join Tom Fox and Matt Kelly in the latest episode of the Compliance into the Weeds podcast.

Key Highlights:

  • Cooperation and Compliance Incentives for M&A
  • Exemption of Acquisition Target’s Aggravating Factors
  • DOJ’s Emphasis on Pre-Acquisition Compliance Involvement
  • Enforcement Policy’s Impact and Curiosity

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Matt in Radical Compliance

Tom 

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31 Days to More Effective Compliance Programs

One Month to More Effective Compliance for Business Ventures – Post Acquisition Integration

Your company has just made its largest acquisition ever and your CEO says that he wants you to have a compliance post-acquisition integration plan on his desk in one week. Where do you begin? Of course, you think about the 2020 FCPA Resource Guide, 2nd edition but you also remember that the established time frames in the enforcement actions involving Johnson & Johnson (J&J), Pfizer Inc. and DS&S and the Halliburton Opinion Release.

While there are time frames listed in these DPAs, they are a guide of timeframes, not a ‘how to’ guide and many compliance professionals struggle with how to perform these post-acquisition compliance integrations. The 2020 Update to the Evaluation of Corporate Compliance Programs asked the following questions, What has been the company’s process for tracking and remediating misconduct or misconduct risks identified during the due diligence process? What has been the company’s process for implementing compliance policies and procedures, and conducting post- acquisition audits, at newly acquired entities?

Whatever compendium of steps you utilize for post-acquisition integration, they should be taken as soon as practicable.

Three key takeaways: 

  1. Planning is critical in the post-acquisition phase.
  2. Build upon what you learned in pre-acquisition due diligence.
  3. You need to be ready to hit the ground running when a transaction closes.
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31 Days to More Effective Compliance Programs

Day 29 – Post-acquisition Integration Plan

Your company has just made its largest acquisition, and your CEO says they want you to have a compliance post-acquisition integration plan on their desk in one week. Where do you begin? An excellent place to start would be the 2020 FCPA Resource Guide, 2nd edition language:
Pre-acquisition due diligence is usually only a portion of the compliance process for mergers and acquisitions. DOJ and SEC evaluate whether the acquiring company promptly incorporated the acquired company into its internal controls, including its compliance program. Companies should consider training new employees, reevaluating third parties under company standards, and, where appropriate, conducting audits on new business units.

The bottom line is that you must train the newly acquired employees, reevaluate third parties under your company standards, and conduct compliance audits on new business units. This process should be based on your pre-acquisition due diligence and risk assessment. Moreover, the DOJ and SEC view both the pre-and post-acquisition phases of M&A as tied together in a unidimensional continuum. If pre-acquisition due diligence is impossible, you should review the requirements and time frames laid out in Opinion Release 08-02 or the 2020 FCPA Resource Guide, which noted, “pursuant to which companies can nevertheless be rewarded if they choose to conduct thorough post-acquisition FCPA due diligence.” Whatever compendium of steps you utilize for post-acquisition integration, they should be taken as soon as is practicable.

The earlier you can deploy these steps, the better off your company will be at the end of the day. An acquisition that fails for compliance reasons is a preventable disaster of the first order. One need only consider the Latin Node Inc. FCPA enforcement actions where the acquiring company had to write off its entire investment because it had failed to engage in appropriate pre-acquisition due diligence.

Three key takeaways:

  1. Planning is critical in the post-acquisition phase.
  2. Build upon what you learned in pre-acquisition due diligence.
  3. You literally need to be ready to hit the ground running when a transaction closes.
Categories
31 Days to More Effective Compliance Programs

Day 29 | Post-acquisition integration plan


Your company has just made its largest acquisition ever and your CEO says they want you to have a compliance post-acquisition integration plan on their desk in one week. Where do you begin? A good place to start would be the 2020 FCPA Resource Guide language:
Pre-acquisition due diligence, however, is normally only a portion of the compliance process for mergers and acquisitions. DOJ and SEC evaluate whether the acquiring company promptly incorporated the acquired company into all of its internal controls, including its compliance program. Companies should consider training new employees, reevaluating third parties under company standards, and, where appropriate, conducting audits on new business units.
The bottom line is that you must train the newly acquired employees, reevaluate third parties under your company standards, and conduct compliance audits on new business units. This process should be based your pre-acquisition due diligence and risk assessment. Moreover, the DOJ and SEC clearly view both the pre- and post-acquisition phases of M&A as tied together in a unidimensional continuum. If pre-acquisition due diligence is not possible, you should review the requirements and time frames laid out in Opinion Release 08-02 or the 2020 FCPA Resource Guide, which noted, “pursuant to which companies can nevertheless be rewarded if they choose to conduct thorough post-acquisition FCPA due diligence.” Whatever compendium of steps you utilize for post-acquisition integration, they should be taken as soon as is practicable.
The earlier you can deploy these steps the better off your company will be at the end of the day. An acquisition that fails for compliance reasons is a preventable disaster of the first order. One need only consider the Latin Node Inc. FCPA enforcement actions where the acquiring company had to write off its entire investment because it had wholly failed to engage in appropriate pre-acquisition due diligence.
 Three key takeaways:

  1. Planning is critical in the post-acquisition phase.
  2. Build upon what you learned in pre-acquisition due diligence.
  3. You literally need to be ready to hit the ground running when a transaction closes.
Categories
31 Days to More Effective Compliance Programs

One Month to More Effective Compliance for Business Ventures – Post Acquisition Integration

Your company has just made its largest acquisition ever and your CEO says that he wants you to have a compliance post-acquisition integration plan on his desk in one week. Where do you begin? Of course, you think about the 2020 FCPA Resource Guide, 2nd edition but you also remember that the established time frames in the enforcement actions involving Johnson & Johnson (J&J), Pfizer Inc. and DS&S and the Halliburton Opinion Release.

While there are time frames listed in these DPAs, they are a guide of timeframes, not a ‘how to’ guide and many compliance professionals struggle with how to perform these post-acquisition compliance integrations. The 2020 Update to the Evaluation of Corporate Compliance Programs asked the following questions, What has been the company’s process for tracking and remediating misconduct or misconduct risks identified during the due diligence process? What has been the company’s process for implementing compliance policies and procedures, and conducting post- acquisition audits, at newly acquired entities?
Whatever compendium of steps you utilize for post-acquisition integration, they should be taken as soon as practicable.
Three key takeaways: 

  1. Planning is critical in the post-acquisition phase.
  2. Build upon what you learned in pre-acquisition due diligence.
  3. You need to be ready to hit the ground running when a transaction closes.