Category: Compliance Bricks and Mortar

These are some of the compliance-related stories that recently caught my attention. You need to build a wall, brick by brick.

Cyberattacks Represent Top Risk, SEC Chief Says by Andrew Ackerman in the Wall Street Journal

“One of my major concerns about this area is nearly everybody gets how high-level the risk and priority of this is,” she said at a conference sponsored by a mutual-fund group. “But who’s really got the ticket overall to make sure that it’s all sort of coming together in an optimal way? That’s something we’re still working on I think in the government.”

Compliance alert: OFAC issues report on blocked terrorist assets by Richard L. Cassin in the FCPA Blog

Last week OFAC — the Office of Foreign Assets Control — issued its 23rd report to congress detailing blocked assets in the U.S. belonging to terrorist organizations and state sponsors of terrorism. The blocked assets in total are worth about $2.3 billion. Most belong to Iran.

SEC’s Daniel Gallagher resigning as commissioner in Investment News

The White House will now need to replace him as well as Luis Aguilar, the Democratic commissioner whose term expires next month. The departures herald a transformation at the agency, which has struggled to write dozens of new regulations arising from the 2010 Dodd-Frank Act.

These are some of the compliance-related stories that recently caught my attention:

Cyber Insurance: A Pragmatic Approach to a Growing Necessity by John Reed Stark and David R. Fontaine in Cybersecurity Docket

To manage this burgeoning yet still nascent threat, just like other routine day-to-day risk and hazards, companies have started to include cybersecurity concerns when considering enterprise risk management and insurance risk transfer mechanisms – such as cyber insurance. There is little doubt that cyber insurance will soon become yet another basic element of a company’s overall insurance coverage program, just like general comprehensive liability, professional liability and officers and directors coverage.

39 Reasons Why Your Employee Handbook May Violate the Law by Eric B. Meyer in the Business of HR

The National Labor Relations Board issued a report this week from General Counsel Richard Griffin, Jr. replete with examples of how your employee handbook is overly broad and violates the National Labor Relations Act.

The purpose of the report is to educate employers, with recent case developments, on what can and cannot be included in an employee handbook.

What can’t be included is anything that could chill your employees from discussing the terms and conditions of employment with one another. That’s because the Act give employees, union or not, the right to do that.

The Consequences of Baltimore and Body Cameras by Matt Kelly in Compliance Week

Some day in the future—hopefully after I am long dead—everyone will have body cameras implanted directly into their persons. Everyone will have an indisputable record of everything they do, all the time.

To Fire or Not to Fire for Employee’s Social Media Posts by Travis Crabtree in eMedia Law Insider

I guess we should advise anyone that wants to talk trash about their employer to follow whatever crazy thing they want to say with “Vote YES for the UNION!!!!!!” It may prevent you from getting fired — unless you are the official voice of the organization and you use a gun emoji.

Reps and Warranties Insurance: Why it is Increasingly Common by Kevin LaCroix in The D&O Diary

 Reps and Warranties insurance has been available for several years now, but there is no doubt that more recently there has been an increase in the product uptake. Indeed, according to an April 29, 2015 article from George Wang of the Haynes and Boone law firm (here), reps and warranties insurance “has gained popularity as a tool to decrease transaction liability exposure in M&A transactions” and more recently there has been a “dramatic increase” in the use of reps and warranties insurance products.

These are some of the compliance-related stories that recently caught my attention.

Investors Turn to Big Real-Estate Funds by Peter Grant in the Wall Street Journal

Investors are pouring more money into real-estate funds than they have since the property bust, but a few giant fund firms are collecting the lion’s share of the spoils. Pension funds, endowments and other big institutional investors are putting more cash into private-equity firms with large real-estate funds and strong track records, leaving smaller firms to fight over the scraps.

TriBeCa Developer Settles with AG’s Office over Unregistered Real Estate Securities by Rodney F. Tonkovic, J.D. in Jim Hamilton’s World of Securities Regulation

According to the complaint, 39 Lispenard acted as an unregistered syndicator of securities with regard to two buildings in TriBeCa, New York, NY. 39 Lispenard acted as an unregistered sponsor of realty in the offering and sale of condominium units in those buildings without filing an offering plan as required under New York law. According to the office’s press release, Moore blatantly procured investors in an unregistered syndication, hiring a prominent real estate firm in order to reach a wide audience.

Advocacy Groups Looking for an SEC Superhero by Bruce Carton in Compliance Week

Today, it appears, the SEC chair must be prepared for far more creative scrutiny, and in very different venues. On his blog today, Broc Romanek included a photo of a poster ad in the Union Station Metro station near the SEC’s headquarters.  To make a long story short, the ad below is an appeal to SEC Chair Mary Jo White from an advocacy group for her to help stomp out the menace of “dark money.”

Two Regulatory Crises by David Smyth in Cady Bar the Door

It strikes me that two civil regulators are facing dire attacks on aspects of their enforcement programs – both in different U.S. Courts of Appeals – at the same time. Both of these attacks arise out of generalized statutes that only sort of address the problems the regulators seek to remedy. To some degree, how these matters are resolved will determine whether these enforcement portfolios are reinvigorated or whither on the vine. In both cases a Congressional fix could be in order.

These are some of the compliance-related stories that recently caught my attention

Lions and Tigers and Bears – Certifications, Checklists and Standards by Michael Volkov in Corruption, Crime & Compliance

People always look for shortcuts as a weak replacement for efficiency. My concern is that compliance practitioners, vendors, standard setting organizations, and non-profit organizations are offering a range of tools that divert important attention and resources from more important compliance priorities. Here is my quick review of the dangers of each: …

Sen. Warren Criticizes Financial Regulators for Weak Penalties by Victoria McGrane in the Wall Street Journal

In a Wednesday speech assessing the state of financial oversight, the Massachusetts Democrat dished out harsh criticism for the Justice Department, the Securities and Exchange Commission, and the Federal Reserve for not being tougher on big financial institutions in the years since the 2008 crisis.

Crisis Chronicles: The Panic of 1825 and the Most Fantastic Financial Swindle of All Time by Don Morgan and James Narron in Liberty Street Economics

Centered in London, the banking panic of 1825 has been called the first modern financial crisis, the first Latin American crisis, and the first emerging market crisis. And while the panic displayed many of the key elements of past crises we have covered—fluctuations in money growth, an investment bubble, a stock market crash, and bank runs—this crisis had its own twists, including a Bank of England that hesitated before stepping in as lender of last resort. But it is perhaps best known for an infamous bond market swindle surrounding an entirely made-up Central American principality. In this edition of Crisis Chronicles, we explore the Panic of 1825 and visit the mythical nation of Poyais.

The Mansions Owned by White-Collar Criminals By Katy McLaughlin in the Wall Street Journal

Enron, Tyco, WorldCom, Bernard L. Madoff Investment Securities—in these cases, executives bilked investors of billions through accounting fraud, conspiracy and insider trading. And part of the proceeds went into real estate.

What became of their mansions? We reached out to case lawyers, county tax offices, real-estate agents, new owners and the fallen executives themselves to ask what became of the properties caught up in the scandals.

These are some of the compliance-related stories that recently caught my attention.

An Eerie Silence by David Kirk in McGuireWood’s The Fraud Board

There’s an eerie silence in the world of fraud prosecutions in the UK. A Libor trial is about to start, a FCA land banking prosecution is on trial at Southwark, but with reporting restrictions, and a couple of weeks ago David Dixon, author of a Ponzi Scheme, pleaded guilty; and Julian Rifat, having entered a guilty plea in the long-running Operation Tabernula case, was sentenced to 19 months in prison for insider dealing. But the City Slicker pages of Private Eye have not been full of critical comment about the ‘Serious Farce Office’ for some weeks – no doubt to the hearty relief of SFO Director, David Green QC – and apart from the odd reference to continuing enquiries, and the recent embarrassing fine by the Information Commissioner, there is indeed little to report in the Spring of 2015.

What to do When the CEO Vanishes? by Michael Volkov in Corruption, Crime & Compliance

CCOs face real challenges when the CCO does not have his or her star actor or actress to promote the company’s ethical culture. If you can imagine filming The Godfather without Marlon Brando, then you can imagine what a CCO must experience without the help or attention of the CEO.

Assuring Regulatory Compliance Doesn’t Get Lost in Translation by Christine Yi

It’s easy to get foreign language review wrong, and success depends on the right strategy, the right technology and the right aptitudes by those carrying it out.

SEC Brings First Action on Whistleblower ‘Pre-taliation’ by Bruce Carton in Compliance Week

The SEC has warned for some time now that it views companies’ attempts to potentially intimidate employees from coming forward as whistleblowers through confidentiality agreements as a form of retaliation — or “pre-taliation,” as the SEC’s Sean McKessy has dubbed it. McKessy, Chief of the SEC’s Office of the Whistleblower, stated last year that the SEC viewed such conduct as unlawful under the Dodd-Frank’s whistleblower rules, and that his office was “actively looking for examples of confidentiality agreements, separation agreements, [and] employee agreements” that condition benefits on not reporting activities to regulators such as the SEC.

March Madness! SEC Loses an AP for First Time Since FY 2013 by Bruce Carton in Compliance Week

In FY 2014, however, the SEC maintained 100% perfection in its administrative proceedings. The agency reportedly prevailed in every single one of its more than 200 APs in FY 2014, including 14 consecutive victories in cases that went to a litigated hearing before an SEC Administrative Law Judge. That will not be the case in FY 2015, however, as the SEC actually lost a case this week that had made it all the way to a litigated hearing before Administrative Law Judge Jason S. Patil.

Regulating Lawyer Blogging by Cathy Gellis in Digital Age Defense

A few months ago an advisory committee for the California State Bar promulgated an interim ethics opinion addressing when lawyers’ blogs should be subject to applicable bar rules governing lawyer advertising.

The impetus behind having bar rules addressing lawyer advertising is generally a reasonable one. The nature of the lawyer-client relationship, the relative imbalance in their respective expertise, and the stress inherent with the sort of situation that would require a lawyer’s assistance makes it important to ensure that lawyers are not misleading or overly aggressive in their solicitation of business. The applicable bar rule regarding lawyer advertising in California is also not especially onerous (although the same may not necessarily be said about similar rules in other jurisdictions).

Why is the SEC still so low-tech? by Hudson Hollister in CNBC

Like many U.S. regulators, the SEC hasn’t kept pace with technological evolution. As a result, the firms it’s charged with overseeing are getting away with shady practices, investors are being denied easy access to key information, and, our economy is being put at risk.

SCCE/HCCA Reaches 15,000 members by Roy Snell

This milestone and growth of membership has a big impact on our effort to help the profession speak for itself. We have a lot of people trying to speak for compliance professionals, define the role and define the function of a compliance program. It’s not always helpful. Every year it gets easier and hitting 15,000 members helps.

Tulip Brick is by Tjololo Photo

It’s finally Spring. Someday, all of this snow in Boston will melt. Someday.

These are some of the compliance-related stories that recently caught my attention.

The Fraudster Next Door by Scott Greenfield in Simple Justice

Whether an epidemic of white collar crime exists in Utah isn’t clear.  There isn’t much of an epidemic of any type of crime these days, but that only serves to lower the bar on what’s needed for hyperbole. Regardless, it has nothing whatsoever to do with the need for a registry.  Are white collar criminals (which covers a vague but broad panoply of offenses) so prone to recidivism that we must watch them, know where they are every minute of the day, keep them away from our children portfolio?

Doctor “No” Versus Doctor Practical by Michael Volkov in Corruption, Crime & Compliance

The attitude of “No” can have disastrous consequences on a compliance program. If company executives and managers view the compliance function as an obstacle to promoting business opportunities, executives and managers will not call or visit the compliance staff.

Court Strikes on Insider Trading, and Congress Lobs Back by Peter Henning in NYTimes.com’s DealBook

The legislative proposals go much further than just overturning the approach to tipping liability adopted by the appeals court in the Newman case. They jettison much of the law of insider trading that has developed over the last 35 years, since the Supreme Court first dealt with the issue in Chiarella v. United States. That approach focuses on breaching a duty of trust and confidence to the source of the information.

But the legislation would create confusion about how much trading would potentially violate the law. The Senate bill creates a gray area about what types of information would be subject to the prohibition. It allows trading on information derived from “publicly available sources” but does not define them.

Ethics Resource Center and Ethics & Compliance Officer Association Join Forces

The  ERC  is  America’s  oldest  nonprofit  advancing  high  ethical  standards  and  practices  in  public  and  private institutions,  and  the  ECOA  is  a member‐driven  association  for practitioners responsible  for  their  organization’s ethics and  compliance  and  programs. The  combination  of ERC  research  and benchmarking  and  ECOA’s  professional membership  organization  is  unique  in the  industry.

We’re asking the wrong question about police shootings by Radley Balko in the Washington Post

We shouldn’t be asking if the police actions were legal or within department policy; we should be asking if they were necessary. Or if you’d like to use a word with a bit more urgency behind it, we should ask if they’re acceptable.

Bells and Wall is by Lucyna Andrzejewska