These are some of the compliance-related stories that recently caught my attention.
Attributes of a Great Ethics and Compliance Leader by Jean-Marc Levy in Corporate Compliance Insights
The three most important qualities of a CECO are courage, a deep understanding of his/her business and emotional intelligence. These qualities go beyond the traditional role of an in-house lawyer at most organizations. As a CECO, spending time with as many leaders of other functions as possible can help hone these skills and support their usage.[More…]
Want to Avoid “General Solicitation?” Focus on Relationships! by William Carleton in Counselor @ Law
The theme of the new SEC guidance is this: a “pre-existing, substantive relationship” can be a terrific antidote to the virus4 of “general solicitation.”
Now, the concept of the pre-existing, substantive business relationship has been around for a long time. It’s been a way of demonstrating that a given deal is indeed private, and prior guidance from the SEC has long held that an issuer can extend the utility of the concept by including, not only persons the issuer knows, but also the relationships of a broker dealer participating in a given offering. [More…]
SEC’s Piwowar Takes Another Shot at ‘Flawed’ Enforcement Statistics by Bruce Carton in Compliance Week
In his remarks this week at the 34th Annual Current Financial Reporting Issues Conference, SEC Commissioner Michael S. Piwowar took another wisecrack at the way the SEC measures the effectiveness of its enforcement efforts. Speaking to an audience of primarily non-lawyers who prepare financial statements, Piwowar asked them to
imagine a world where GAAP or other reporting standards did not exist – where management could develop its own numbers based on its own poorly-defined criteria. Management might be tempted to create numbers that provide the illusion of performance but in reality are largely irrelevant to measuring the actual performance of that organization. Reported numbers might be distributed for public consumption without clear disclosure as to how they were derived.
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Whistleblower Tips Rise Again in 2015 by Christopher M. Varano in Securities Compliance Sentinel
The Securities and Exchange Commission released its 2015 Annual Report on its Whistleblower Program this week and announced another rise in the number of whistleblower tips that it received. The SEC reported receiving 3,923 tips during its 2015 Fiscal Year, which is up from 3,620 in 2014 (as we previously reported), and up over 30% from 2012, which was the first full year that these numbers were reported. Additionally, in its FY 2015, the SEC paid out $37 million to whistleblowers, which included a whopping reward of over $30 million to just one whistleblower. The SEC’s Office of the Whistleblower (OWB) rewards whistleblowers for “their provision of original information that led to a successful Commission enforcement action with monetary sanctions totaling over $1 million” and can net tipsters between 10% and 30%, which is the statutory maximum allowed under the Dodd-Frank Act.[More…]