These are some of the compliance-related stories that recently caught my attention.
Fixing a Company’s Ethics and Compliance Culture by Michael Volkov in Corruption, Crime & Compliance
A company’s ability to enact meaningful change depends on the innate desire of its leadership to execute real change. It is too easy to say that such change depends on the CEO. Instead, a change in culture requires the dedication of two important players – the CEO and the board of directors.
SEC Finds Deficiencies at Hedge Funds by Andrew Ackerman and Rob Copeland in the Wall Street Journal
Mr. Bowden, who spoke at an investment advisory conference sponsored by industry newsletter IA Watch, said regulators have discovered some funds engaging in what he called “flip-flopping,” boosting valuations by changing the way they measure holdings several times a year. In some instances, the funds chose the measurement with the highest value or intentionally classified certain assets in a way that gave the fund manager more flexibility to inflate the price of the fund’s holdings.
SEC Awards Largest Ever Whistleblower Bounty, $30 Million by Joe Mont in Compliance Week
“Our client exposed extraordinarily deceitful and opportunistic practices that were deeply entrenched and well hidden,” Erika Kelton, an attorney with the law firm Phillips & Cohen and legal counsel to the whistleblower says. “Federal regulators never would have known about this fraud otherwise, and the scheme to cheat investors likely would have continued indefinitely.”