These are some of the compliance-related stories that recently caught my attention.
Death Knell for Regulatory Guidance Hits Most Federal Agencies…
Broc Romanek
TheCorporateCounsel.net
We’ve been covering the Administration’s gradual squeeze on regulatory guidance for some time (here’s our latest from April). As noted in this DLA Piper memo, President Trump signed two ‘Executive Orders’ recently that limit the practice of “regulation by guidance.” Here’s the “improved agency guidance” order that requires each agency to post its guidance documents on an indexed, searchable website after the OMB has issued implementing guidance about how to accomplish that (here’s a comprehensive Davis Polk memo on this order).
https://www.thecorporatecounsel.net/blog/2019/11/death-knell-for-regulatory-guidance-hits-most-federal-agencies.html
How co-working magnifies compliance perils
Richard L. Cassin
The FCPA Blog
Here’s the problem. Some people here lack, um, situational awareness. They forget (or don’t care?) that when they talk to colleagues in the common areas — at the big open work tables, in the community lunchroom, around the water cooler — other people might be listening in. When they yell into their phones while walking the halls, or put their calls on speaker, it all reaches the ears of outsiders. When they hold meetings in the conference rooms scattered throughout the workspace, the walls aren’t nearly thick enough to keep all the sound inside.
https://fcpablog.com/2019/11/14/how-co-working-magnifies-compliance-perils/
Sexual Harassment Prevention Lessons from the Television’s “Survivor”
by Daniel Schwartz
Connecticut Employment Law Blog
Why? Here are a few things that stood out to me from an employment perspective:
https://www.ctemploymentlawblog.com/2019/11/articles/sexual-harassment-prevention-lessons-from-the-televisions-survivor/
First, a female player (Kellee) complained to a producer that another male player (Dan) was a little too “touchy” and made her feel uncomfortable. To be sure, there was plenty of video evidence to back her up. The male player was given a “warning” and play continued. But here’s the thing: The female player never knew that a warning was issued and Dan worked with others to get Kellee voted out of the game immediately thereafter. Not telling the complainant what was going on with her complaint is just one of the ways the producers seem to have mishandled things.
2019 Was Big for the SEC. 2020 Will Be Huge.
By John Manganaro
PlanAdviser.com
Given its broad authority, the SEC is normally engaged in a wide range of rulemaking and regulatory activities in any given year—and that has certainly been the case in 2019. For plan advisers, three or four of the SEC’s ongoing regulatory activities should take precedence while planning for compliance in 2020. These are the Regulation Best Interest (Reg BI) package, the new advertising rules for advisers and brokers, and the revised approach to rules and requirements related to proxy voting and the use of proxy advisers.
https://www.planadviser.com/2019-big-sec-2020-will-huge/
SEC Enforcers Continue to Focus on Undisclosed Fees
by Joshua M. Newville & Brian Hooven
In a series of enforcement cases over the past few months, the SEC has continued to bring actions focused on undisclosed fees charged to clients. Many of these cases have charged firms with fraud and other violations based on fees that were not adequately disclosed. While some attention has focused on retail wealth managers, institutional advisers to private funds have attracted scrutiny for undisclosed fees, leading to the following enforcement actions:
https://www.lexblog.com/2019/11/12/sec-enforcers-continue-to-focus-on-undisclosed-fees/
Paul Weiss Discusses Delaware Decisions Showing Renewed Focus on Board Oversight
Breach of the duty of oversight claims against Delaware directors are known as “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment.”[1] The plaintiff must successfully argue that the directors either “utterly failed to implement any reporting or information system or controls” or “having implemented such a system or controls, consciously failed to monitor or oversee its operations thus disabling themselves from being informed of risks or problems requiring their attention.”[2] These “Caremark claims”—named after the Court of Chancery’s seminal decision in this area, In re Caremark International Inc. Derivative Litigation—require well-pled allegations of bad faith (i.e., that “the directors knew that they were not discharging their fiduciary obligations,” a standard of wrongdoing “qualitatively different from, and more culpable than . . . gross negligence”) to survive dismissal.[3] As a result of these high pleading standards, Caremark claims have historically had limited success.
http://clsbluesky.law.columbia.edu/2019/11/20/paul-weiss-discusses-delaware-decisions-showing-renewed-focus-on-board-oversight/
Thoughts on Compliance Career Risk
by Matt Kelly
Radical Compliance
Career success is always about demonstrating how you add value to an organization larger than yourself. In our case, it’s about refashioning what you do away from executing a task (testing controls, bargaining with regulators, training employees, writing policies) toward providing a resource executive management needs: a greater awareness of the company’s overall risk posture, so that managers can make better decisions.
http://www.radicalcompliance.com/2019/11/21/thoughts-on-compliance-career-risk/