These are some of the compliance-related stories that recently caught my attention.
The Houston Texans and (How Not To Do) Long Term Compliance Strategy
Tom Fox
FCPA Compliance & Ethics
Yet as idiotic as the giveaway of Clowney was, it was only the opening move. Later that day, the Texas traded not one No. 1 pick, not two No. 1 picks but two No. 1s and one No. 2 for two players from Miami. The first was Laremy Tunsil, a starting left tackle (i.e. the blind side), a backup receiver, and a fourth and sixth round pick. According to Albert Breer, writing in Sports Illustrated’s MMQB, “barring more big trades, Houston will go through three draft cycles in four years (2018, ’20, ’21) without picks in the first two rounds.”
http://fcpacompliancereport.com/2019/09/houston-texans-not-long-term-compliance-strategy/
Compliance is a Team Sport
by Mike Fabrizius
SCCE’s The Compliance & Ethics Blog
Team sports provide us with many organizational analogies, and none better than football. The successful elements of the defensive dimension of football provide some strong parallels to healthcare compliance. In both cases the goal is to improve the chances of success by preventing costly mistakes that can damage the team’s record and standing.
http://complianceandethics.org/compliance-is-a-team-sport-2/
Killing LIBOR: A Victory for Irrational Rectitude
by Rick Jones
Crunched Credit
The US economy is about to pay the butcher’s bill for a massive disruption of worldwide financial markets resulting from the elimination of the London Interbank Offered Rate, or LIBOR. And, we are doing this on purpose. It seems the denizens of the heights of our international financial fabric felt they had to do this in light of the discovery that a handful of bankers had unlawfully colluded to cause LIBOR to be mispriced for their personal advantage. As Captain Renault said, “I’m shocked, shocked!” This was so bad that we had to blow up the LIBOR index upon which trillions of dollars of financial assets are based? While bankers behaving badly is a problem, why are we punishing markets because our banking regulatory cadres failed to prevent bad behavior? At best, this is a monument to irrational rectitude.
https://www.crunchedcredit.com/2019/08/articles/libor/killing-libor-a-victory-for-irrational-rectitude/
Verifying Accredited Investors in a Rule 506(c) Offering
by Taylor Wilkins
Strictly Business
Generally, Rule 506(c) provides an exemption from registering an offering of securities when the company issuing securities (usually called an “issuer”) only sells securities to accredited investors (previously defined here) and the issuer takes reasonable steps to ensure that each purchaser is an accredited investor. The benefit of Rule 506(c) compared to Rule 506(b), is that, under Rule 506(c), an issuer may generally solicit potential investors, which allows issuers to engage in a variety of public solicitations, such as internet postings, presentations at conferences, or other forms of advertisement. Under a Rule 506(b) offering, engaging in any such activity could result in a loss in the ability of the issuer to rely on the exemption.
https://www.strictlybusinesslawblog.com/2019/08/27/verifying-accredited-investors-in-a-rule-506c-offering/
20% of Big 4-audited IPOs report weaknesses in financial-reporting controls
by Francine McKenna
Marketwatch
A MarketWatch analysis of SEC filing data provided by research firm Audit Analytics shows 100 IPO filings in 2019 year-to-date by companies that use a Big 4 audit firm — Deloitte, Ernst & Young, PricewaterhouseCoopers or KPMG. MarketWatch’s analysis of S-1 disclosures for those companies found 20 that have voluntarily disclosed serious issues with internal controls over accounting, financial reporting and the systems.
https://www.marketwatch.com/story/20-of-big-4-audited-ipos-report-weaknesses-in-financial-reporting-controls-2019-09-04