These are some of the compliance-related stories that I read recently while getting ready for Halloween.
It’s the Great Pumpkin: Lessons in Process Validation Through Monitoring
by Tom Fox
FCPA Compliance & Ethics
The compliance lesson from Linus’ adventure; it is process validation. Unlike Santa Claus, who we have been repeatedly told “Yes, Virginia there is a Santa Claus”; there has been no process validation for the Great Pumpkin. Linus faints when he thinks he sees the Great Pumpkin rising from his pumpkin patch; unfortunately it is only Snoopy. In the compliance world, process validation comes through oversight. Two of the seven compliance elements in the 1992 US Sentencing Guidelines call for companies to monitor, audit and respond quickly to allegations of misconduct.
http://fcpacompliancereport.com/2019/10/its-the-great-pumpkin-lessons-in-process-validation-through-monitoring/
Enforcement Co-Director Peikin touts self-reporting, creative remedies at Securities Docket conference
by Amanda Maine, J.D.
Jim Hamilton’s World of Securities Regulation
Regarding self-reporting in general, former SEC Enforcement Director William McLucas, now at Wilmer Hale, said that the lack of guidance about self-reporting from the SEC can result in tough discussions with clients because there are no guarantees for self-reporting in contrast to the detailed guidelines from the Department of Justice. George S. Canellos, formerly of the SEC’s Enforcement Division and currently at Milbank, agreed, stating that without formal guidelines for cooperation credit, the SEC is “all over the map.”
https://jimhamiltonblog.blogspot.com/2019/10/enforcement-co-director-peikin-touts.html
Compliance Job Interview Questions and Answers
by Corporate Compliance Insights
At CCI, we know what questions reveal a candidate’s qualifications, and we know what answers a hiring authority is looking for. If you’re hiring a compliance officer, you need to ask these questions. If you’re interviewing for a compliance position, you need to be prepared to answer them.
https://www.corporatecomplianceinsights.com/compliance-job-interview-questions-and-answers/
Corporate Oversight and Disobedience
by Elizabeth Pollman
Over a decade has passed since landmark Delaware corporate law decisions on oversight responsibility, and only a small handful of cases have survived a motion to dismiss. Scholars have puzzled over what it means to have the potential for corporate accountability lodged within the duty of good faith, but almost never brought to fruition in terms of trial liability. …
Under current Delaware case law, courts have allowed Caremark claims to proceed where evidence exists to infer that the board utterly failed to implement a compliance monitoring system or that the directors engaged in disobedience by knowingly managing legal risk or flouting, violating, or ignoring the law.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3474337
Is the SEC up to its $84-trillion RIA challenge?
by Tobias Salinger
Financial Planning
Agency officials have said as much: The SEC’s latest annual performance review cites the notable rise in the share of RIAs receiving exams but also two missed goals around enforcement. This month, the agency’s inspector general took it to task over those findings.
https://www.financial-planning.com/news/sec-enforcement-cases-of-rias-take-two-years-ig-says
The average time it takes the SEC to start an enforcement action after opening an investigation is two years and one month. Only 49% of the time was the agency able to file cases within two years of starting its investigation. The figures came nowhere near the SEC’s own targets.
