These are some of the compliance-related stories that recently caught my attention. Little bits to grow your building knowledge base.
Steve Cohen Will Pay Extra for Compliance Tips by Matt Levine
How did this happen, you might well ask. There are some obvious answers. For one thing, a culture of compliance at Point72 really might be a delicate bud that needs to be carefully nurtured with constant cheerleading and incentive programs. 1 For another, I mean, it’s not impossible that Steve Cohen spends an hour a day thinking up ways to annoy everyone, is it? [More…]
A Tribute to the Fantastic Four: Part I- Four Questions for Goldman Sachs by Tom Fox
The Fantastic Four introduce four questions that Goldman Sachs will have to answer around its role in the 1MDB scandal. While the company has tried to separate itself from its former partner Tim Leissner and former Managing Directors Roger Ng and Andrea Vella; given Leissner’s remarks about company culture and the company’s expectations at his guilty plea hearing this past summer. [More…]
New Company Policy: Don’t pay bribes by Richard L. Cassin
Could a company ever replace a 50-page anti-corruption policy with three words: Don’t pay bribes?
Would supervisors, managers, and executives take ownership of a three-word policy? [More…]
NAVEX Global Research Demonstrates Correlation Between Business Performance and Hotline System by Michael Volkov
In an interesting new report (here), NAVEX Global enlisted Professor Kyle Welch from George Washington University’s Business School to analyze years of NAVEX Global’s hotline data. Professor Welch was given access to over ten years (2004 to 2017) of NAVEX Global’s hotline data …. The study shows a correlation between increased use of internal hotline reporting systems and improved business performance. The benefits to a company increase with use of the hotline reporting system. [More…]
Time Limits and SEC Enforcement Actions by Thomas O. Gordon in SEC Actions
In Kokesh the Supreme Court held that the statute of limitations applies to disgorgement in SEC enforcement actions. Accordingly, if the agency fails to initiate its action in a timely fashion requests for disgorgement may be time barred. No such time limit applies, however, once the case is brought. To the contrary, the action may continue for years. The point is well illustrated by a case the Commission recently partially settled which traces to 2009. [More…]
How Co-investments continue to evolve by Lisa Fu in PERE
Meanwhile, managers are also reevaluating how some investors take part in co-investments. A manager may agree to let investors commit to a co-investment opportunity without taking part in the main fund, according to a fourth panelist. His own firm brought on third-party investors for co-investments based on their unique capabilities to help grow a particular platform, he said. However, because of the increasing demand for co-investments and the fact that such opportunities are “too valuable” to offer to investors without receiving a fund commitment in exchange, he believes there will be a trend toward limiting co-investment opportunities to investors in the primary vehicle. The one exception would be an investor that possesses a unique attribute that can help execute on an investment plan, he said. [More…]
Highlighting the “SEC” in cybersecurity: Continued regulatory focus on preparedness and response by Jennifer Achilles and Jim Barbuto
The SEC appears to be focused on the importance of well-designed policies and procedures and training. Two elements of compliance that the Report emphasizes are the importance of procedures to authorize wire transfers (including the requirement for multiple levels of approval and verifying changes in counterparties) and the need for continued training of employees to familiarize them with common cyberattack strategies. These focal points serve as useful action items for companies to evaluate their own risk profiles. Although the SEC refrained from suing the companies mentioned in the Report, the attention paid to internal controls and cybersecurity in particular is a shot across the bow that the SEC will not be as generous in the future. [More…]
Sentences upheld in double jeopardy dispute by R. Jason Howard, J.D.
On the heels of the Supreme Court holding in Kokesh v. SEC that disgorgement, “as it applied in SEC enforcement proceedings, operates as a penalty,” the Sixth Circuit, in a criminal sentencing appeal, held that SEC civil disgorgement is not a criminal punishment (U.S. v. Dyer, November 13, 2018, Suhrheinrich, R.). [More…]
