These are some of the compliance-related stories that recently caught my attention,
The Fall of the Alamo: Analogy for Compliance Officers by Tom Fox in FCPA Compliance & Ethics
[March 6] is the anniversary of the most historic day of many in the history of the great state of Texas, the date of the fall of the Alamo. While March 2, Texas Independence Day, when Texas declared its independence from Mexico and April 21, San Jacinto Day, when Texas won its independence from Mexico, probably both have more long-lasting significance, if it is one word that Texas is known for around the world, it is the Alamo. The Alamo was a crumbling Catholic mission in San Antonio where 189 men, held out for 13 days from the Mexican Army of General Santa Anna, which numbered approximately 1,800. But on this date in 1836, Santa Anna unleashed his forces, which over-ran the mission and killed all the fighting men. Those who did not die in the attack were executed and all the deceased bodies were unceremoniously burned. Proving he was not without chivalry, Santa Anna spared the lives of the Alamo’s women, children and their slaves. But for Texans across the globe, this is our day.
http://fcpacompliancereport.com/2019/03/19018/
SEC Investigations 101: The Wells Notice (Part 1) by Dan Portnov
in Grand Jury Target
The process by which the Enforcement staff notifies you of impending proceedings against you – either in federal court or its in-house administrative process – begins with the Wells Notice.
https://grandjurytarget.com/2019/03/01/sec-investigations-101-the-wells-notice-part-1/
The Wells Notice is named after the chair of 1972 SEC special committee that gave the following recommendation to the Commission:
Except where the nature of the case precludes, a prospective defendant or respondent should be notified of the substance of the staff’s charges and probable recommendations in advance of the submission of the staff memorandum to the Commission recommending the commencement of an enforcement action and be accorded an opportunity to submit a written statement to the staff to be forwarded to the Commission together with the staff memorandum.
$2 Mill Fine for Weak Compliance by Matt Kelly in Radical Compliance
FINRA today hit broker-dealer firm Cantor Fitzgerald with a $2 million fine for sloppy compliance practices that lasted at least five years, in an enforcement action sure to warm a compliance officer’s heart.
http://www.radicalcompliance.com/2019/03/05/2-mill-fine-weak-compliance/
The offenses related to naked short selling, where an investor first borrows stock to sell at a high price, then buys it back at a lower price to return to the original owner — except the investor doesn’t first obtain the borrowed stock before selling it. (That’s the “naked” part.)
McKenna On Buffett, Berkshire Hathaway, and Kraft Heinz in re: The Auditors
Has Warren Buffett run out of long-run?
http://retheauditors.com/2019/03/03/mckenna-on-buffett-berkshire-hathaway-and-kraft-heinz/
The stars aligned and Warren Buffett issued an annual shareholder letter that was forced to include an embarrassing charge for significant losses on Berkshire Hathaway’s investment in Kraft Heinz.
Buffett’s letter was a rant against GAAP, and a 180 degree turn from his typical long-term focus.
Is willful blindness an affliction that can be cured? by Martin Kenney in The FCPA Blog
SNC-Lavalin senior managers were allegedly aware of the shenanigans afoot in their company, with some individuals operating offshore companies as a means to “facilitate” certain payments and launder funds. Indeed, if some of the allegations are true, including an historical plot to smuggle Colonel Gadhafi’s son to a safe place in order to avoid capture, then we have the makings of a Hollywood blockbuster here.
http://www.fcpablog.com/blog/2019/3/1/is-willful-blindness-an-affliction-that-can-be-cured.html