These are some of the compliance-related stories that recently caught my attention.
The Curious Incident of the ‘Life Coach’ and the Press Release by Bruce Carton in Compliance Week
As I’ve observed before, the SEC loves to craft press release headlines that feature defendants’ interesting or high-profile jobs. For example, past SEC headline highlights include:
- “Commission Settles with Motivational Speaker“
- “SEC Charges Nationally Known Psychic in Multi-Million Dollar Securities Fraud“
- “SEC Charges Former Professional Baseball Player Doug DeCinces and Three Others with Insider Trading“
- “SEC Charges College Football Hall of Fame Coach in $80 Million Ponzi Scheme“
All of this makes it quite mystifying to me how the SEC’s case filed last week…[More]
Where I Think the Yates DOJ Memo Will Take Us by Roy Snell in SCCE’s Compliance & Ethics Blog
On one side of the room will be top leadership; on the other, the lead investigators. The DOJ may ask that the Board Chair be involved. At some point during the meeting, the DOJ will share their recent memo/policy that, paraphrased, states, “If you turn over internal investigations of individuals involved in the alleged wrongdoing, you will get more credit.” (“More credit” is a euphemism for, in some cases, millions of dollars in reduced penalties.) But beyond the discussion of credit, leadership will need to be prepared for a discussion of discipline.[More…]
Reflections on the Hitachi FCPA Enforcement Action by Thomas R. Fox in FCPA Compliance & Ethics
Perhaps the most interesting aspect of the Hitachi matter is that it involved bribery of a political party, the African National Congress (ANC). The SEC Press Release stated, “Hitachi sold a 25-percent stake in a South African subsidiary to a company serving as a front for the ANC. This arrangement gave the front company and the ANC the ability to share in the profits from any power station contracts that Hitachi secured. Hitachi was ultimately awarded two contracts to build power stations in South Africa and paid the ANC’s front company approximately $5 million in “dividends” based on profits derived from the contracts. Through a separate, undisclosed arrangement, Hitachi paid the front company an additional $1 million in “success fee”.”[More…]
The Volcker Rule as Structural Law by John C. Coates in the Harvard Law School Forum on Corporate Governance and Financial Regulation
Alongside these banking laws, another set of structural laws grew in importance in the 20th century: administrative law—the body of statutes and court doctrines channeling and controlling the use of delegated law-making power by government officials and agencies. To control and improve the functioning of agencies, Congress adopted a number of legal constraints, including the Administrative Procedures Act, which together with an assertive judiciary gives private actors the ability to challenge regulation in court. To this list, cost-benefit analysis (CBA) has been increasingly advanced—in advocacy, in Congress, and in court—as an additional tool for improving financial regulations, and holding financial regulatory agencies accountable to the public. [More…]
The Compliance Dangers of Cheerleaders and Nay-Sayers by Michael Volkov in Corruption, Crime & Compliance
Many senior executives are smart people –we all understand that. But too often senor executives embrace an interpersonal style of cheerleading. It allows them to appear to be on the “team” and prevent them from “rocking the boat.” Unfortunately, such an attitude prevents them from being a value add and problem solver for real management issues. [More…]