These are some of the compliance-related stories that recently caught my attention.
Woodstock 50th and Succession Planning in Compliance
by Tom Fox
FCPA Compliance & Ethics
The Woodstock music festival informs today’s topic of succession planning from the compliance perspective and is another area where compliance can play a key role. A.G. Lafley and Noel M. Tichy, in a 2011 Harvard Business Review (HBR)article,“The Art and Science of Finding the Right CEO”, discussed the issue of succession planning at Procter & Gamble (P&G). Many of the concepts and issues that Lafley discusses within the context of succession planning in general are applicable to the concern of compliance within this area.
http://fcpacompliancereport.com/2019/08/woodstock-50th-succession-planning-compliance/
Do Fiduciary Duties Matter?
By A. Joseph Warburton
The CLS Blue Sky Blog
I analyze fiduciary duties in a unique setting – the British mutual fund industry – where trusts and corporations exist within the same industry. Prior to 1997, all British mutual funds had to be organized legally as trusts, and fund managers were subjected to a strict (trust) fiduciary standard. In 1997, this regulatory restriction was changed. Funds were permitted to organize as either trusts or corporations, and fund managers were subjected to the applicable fiduciary standard. (In contrast, the U.S. applies a uniform fiduciary standard under the Investment Company Act of 1940 regardless of the fund’s organizational form). Hence, the British fund industry offers a unique laboratory for empirical study of fiduciary standards.
http://clsbluesky.law.columbia.edu/2019/08/13/do-fiduciary-duties-matter/
Other Lessons in Verwaltung Case
By Matt Kelly
Radical Compliance
Don’t get me wrong; I’m all for any enforcement action that underlines the importance of heeding a compliance officer’s advice. But the misconduct in question happened 10 years ago, in a foreign country with a deep culture of bank secrecy. One can’t be too surprised that Verwaltung executives behaved the way they did at that time.
http://www.radicalcompliance.com/2019/08/12/other-lessons-verwaltung-case/
That, to my thinking, is the better point to ponder here. Verwaltung is about the maturity of a corporate compliance function. Compliance officers can use the facts here to diagram an immature compliance function, and gain a better understanding of how mature your own organization’s approach to compliance truly is.
SEC Stops Recidivist’s Fraud Before Investors Are Harmed
On August 13, 2019, the Securities and Exchange Commission (“SEC”) charged Antonio M. Bravata, of Ferndale, Michigan, a recidivist securities law violator and convicted felon, with securities fraud conducted while serving a sentence for an earlier investment fraud. Bravata was previously charged by the SEC, and later by criminal authorities, for his participation in a $50 million securities fraud conducted through BBC Equities, LLC. In 2013, Bravata was found guilty in a jury trial, sentenced to 5 years of incarceration, and ordered to pay restitution. In the SEC case, Bravata was found liable for securities fraud, enjoined from future violations, and ordered to pay disgorgement and penalties. [my emphasis]
https://www.sec.gov/litigation/litreleases/2019/lr24559.htm