These are some of the compliance-related stories that recently caught my attention.
Who to Sue When a Robot Loses Your Fortune
By Thomas Beardsworth and Nishant Kumar
Bloomberg Business
The timeline leading up to the legal battle was drawn from filings to the commercial court in London where the trial is scheduled to begin next April. It all started over lunch at a Dubai restaurant on March 19, 2017. It was the first time 45-year-old Li, met Costa, the 49-year-old Italian who’s often known by peers in the industry as “Captain Magic.” During their meal, Costa described a robot hedge fund his company London-based Tyndaris Investments would soon offer to manage money entirely using AI, or artificial intelligence.
https://www.bloomberg.com/news/articles/2019-05-06/who-to-sue-when-a-robot-loses-your-fortune
U.S. v. Connolly: “Outsourcing” a Government Investigation — And How to Avoid It
by David B. Massey, James Q. Walker, Lee S. Richards III, Shari A. Brandt, Audrey L. Ingram, Daniel C. Zinman, Arthur Greenspan, and Rachel S. Mechanic
NYU Law’s Compliance & Enforcement
On May 2, in a widely-watched case, the U.S. District Court for the Southern District of New York found that the government “outsourced” a criminal LIBOR investigation to Deutsche Bank and its outside counsel, and thereby violated defendant Gavin Black’s Fifth Amendment rights when outside counsel interviewed the defendant under threat of termination from his employment. United States v. Connolly, 16 Cr. 370 (CM), Memorandum Decision and Order Denying Defendant Gavin Black’s Motion for Kastigar Relief, ECF Document 432, slip op. at 19, 29 (May 2, 2019). But because the DOJ did not use the defendant’s compelled statements at trial and the investigation was not otherwise tainted, the Court found no Kastigar violation and held that, even if there was, any error was harmless. Connolly, slip op. at 40-41, 43-44.
https://wp.nyu.edu/compliance_enforcement/2019/05/07/u-s-v-connolly-outsourcing-a-government-investigation-and-how-to-avoid-it/
CBS Beefs Up Ethics & Compliance
By Matt Kelly
Radical Compliance
Most notably, CBS will place “human resources production partners” on set at all of its programs, so actors and other staff will have someone they can approach with any complaints. That seems directly related to Michael Weatherly, star of CBS’ hit show Bull. He was accused in December of harassing co-star Eliza Dushku, and then squeezing her off the show in 2016 when Dushku complained about his behavior to CBS executives.
http://www.radicalcompliance.com/2019/05/07/cbs-beefs-ethics-compliance/
CBS also said it has hired a new chief ethics and compliance officer, Hazel Mayers. Mayers started the job in March, after working since 2015 as general counsel at Simon & Schuster — but Mayers also previously worked at CBS for 12 years before that, as assistant general counsel and chief compliance officer.
The Ruthless, Secretive, and Sometimes Seedy World of Hedge Fund Private Investigators
by Michelle Celarier
Institutional Investor
Work for activist hedge funds is a particularly revealing task, according to Barakett. “I’m never surprised by what we find,” he says, mentioning a public company executive who had a “wife and kids in one city, and another wife and kids in another city in another — nonadjacent — state.” Another married CEO of a public company “had his gay lover on the payroll and was also living in a condo owned by the company,” Barakett says.
https://www.institutionalinvestor.com/article/b1f6yg8n93jyfh/The-Ruthless-Secretive-and-Sometimes-Seedy-World-of-Hedge-Fund-Private-Investigators
What characteristics do the World’s Most Ethical Companies have in common?
By Aarti Maharaj
The FCPA Blog
Some of the findings include:
http://www.fcpablog.com/blog/2019/4/24/what-characteristics-do-the-worlds-most-ethical-companies-ha.html
Diversity at the highest levels: Among the 128 companies from Ethisphere’s 2019 awards list, women hold 28.1 percent of the director positions (a four percent increase over last year). That compares with 21.1 percent overall on the large cap index.
Disseminating information about disciplinary actions: Amazingly, one out of every ten employees surveyed by Ethisphere indicated that they either disagree or strongly disagree that the rules and associated disciplinary actions for unethical behavior or misconduct are the same for every employee. That said, nearly one-third (32 percent) of honorees do communicate publicly about how such concerns were reported, the types of concerns reported, and the substantiation rates of corresponding investigations. This figure represents a noticeable increase over 2018, when less than a quarter of 2018 honorees communicated such information publicly.
Supporting middle management: An employee’s immediate manager is the most commonly used resource for not only asking questions but also reporting observed instances of misconduct, so supporting middle management with tools to ease the intake and tracking process is important to the World’s Most Ethical Companies. The majority (84 percent) of 2019 honorees use a tracking tool or case management system that tracks all reports and related investigations, regardless of how the report was originally made.
