Compliance Bricks and Mortar – Page 41

Compliance Bits and Pieces for January 22

Some interesting stories from the past week:

Investor Relations Website Best Practices from the Q4 Blog

On January 14, Catherine Crofton, Q4’s VP Sales & Marketing hosted an IR Website Best Practices webinar. Her presentation focused on how to build investor confidence through effective online communications. The presentation includes a lot of great examples of companies using best practices and how they can be applied to your own IR website.

Lawyers, Anthropologists, and Revolutionaries by Paul Lippe

But now as the changes wrought by technology become ever more pervasive, and as they coincide with the most significant challenge to US global leadership in a Century – the rise of China – we need to think about the anthropology of technology at a societal level, and look at how well core institutions are adapting.

‘Perp Walks’ Undermine Presumption of Innocence by Howard W. Goldstein of Fried, Frank, Harris, Shriver & Jacobson LLP in the New York Law Journal

But the Puritan practice of shaming and today’s perp walks are different in one critical respect. The shamed Puritans had already been convicted; today’s perp walkers have only been arrested and are theoretically cloaked with the presumption of innocence.

Lessons From FCPAscam by Richard Cassin in The FCPA Blog

That’s a Smith and Wesson and you’ve had your six.

~ James Bond to an out-of-ammo assailant in “Dr. No”

Our six shots. Here’s an early look at what the case means: …

Insider Trading … in Mutual Fund Shares? by Bruce Carton for Compliance Week’s Enforcement Action

Today, though, the SEC filed a settled enforcement action charging Charles J. Marquardt with insider trading in the shares of the Evergreen Ultra Short Opportunities Fund (the “Ultra Fund”), a mutual fund that invested primarily in mortgage-backed securities.

A Rare Moment Of Reflection: I Am Privileged To Be A Lawyer by Brian Tannebaum in My Law License

I’m in my 15th year of practice. I’ve walked into courtrooms hundreds of times. I remember thinking after I was admitted to the Bar how great it was that I could “talk in court.” I remember telling people how cool it was that the Florida Supreme Court gave me a license to go into court and represent people. I still think that, but I say it much less.

Obama Wants More Restrictions on Banks

President Barack Obama proposed new rules designed to restrict the size and activities of the U.S.’s biggest banks. The text of his proposal has not been released yet. All we have is the video, embedded below.

The White House wants commercial banks that take deposits from customers to be barred from proprietary trading, owning hedge funds or owning private equity firms. It sounds like Goldman Sachs and Morgan Lewis would give back their back charters. (Of course, they only grabbed those charters in order to get the liquidity from the TARP.)

The White House also wants new limits on the size and concentration of financial institutions. He mentioned the existing cap on customer deposits and seems to want to reduce that cap. I think Bank of America is the only bank that is currently close to that cap.

In the end this is just proposed legislation from the White House. They would still need to convince Senator Dodd to revise his proposed legislation and get the votes to pass it in the Senate, reconcile it with the House bill and get it passed by the full Congress.

Compliance Bits and Pieces for January 15

Here are some interesting compliance, risk and ethics stories from the past week:

Robert Kennedy, the Travel Act and the FCPA by Thomas Fox in Tfoxlaw’s Blog

Robert Kennedy’s contribution is that while Attorney General, he urged Congress to enact the Travel Act in 1961 which was passed as part of the same series of bills as the Wire Act and was a part of his program to combat organized crime and racketeering. The Travel Act is aimed at prohibiting interstate travel or use of an interstate facility in aid of a racketeering or an unlawful business enterprise.

New Cooperation Tools, Units An Enforcement Game Changer by Melissa Klein Aguilar for Compliance Week

Forging ahead with the revamp of its Enforcement Division, the Securities and Exchange Commission unveiled new tools to incentivize individuals and companies to cooperate with the enforcement staff during investigations, including deferred- and non-prosecution agreements and a so-called Seaboard Memo for individuals. For the first time, the SEC set out in a new policy statement how it will evaluate whether, how much, and in what manner to credit cooperation by individuals, to serve as an incentive for people to report violations and cooperate fully and promptly in enforcement cases.

Employee Wrongdoing: Drawing the Line by Chris MacDonald on The Business Ethics Blog

Should companies ever tolerate unethical behaviour in the workplace? Never? What about really small stuff? What about really important employees? How strictly should they monitor employees? Won’t intense scrutiny hurt morale?

Earning Cooperation Credit in an FCPA Case by Thomas Gorman for SEC Actions

For corporations, the SEC, like the Department of Justice and other federal law enforcement agencies, has long held out the prospect of credit in the charging process in exchange for cooperation. While there is no talismanic test which will guarantee a company that it can secure enough credit to avoid being charged, the SEC’s Seaboard Release, discussed here, contains an example of a company that did in fact earn sufficient credits and discusses general principles regarding cooperation.

Nevada and New Hampshire Data Security and Privacy Laws Take Effect from the Privacy & Information Security Law Blog by Hunton & Williams LLP

On January 1, 2010, two important state data security and privacy laws took effect in Nevada and New Hampshire. The laws create new obligations for most companies that do business in Nevada and for health care providers and business associates in New Hampshire.

Compliance Bits and Pieces for January 8

Here are some interesting stories from the past week:

BAE Bribe Suit Tossed On Appeal from The FCPA Blog

The decision is a big win for BAE (and all U.K. companies threatened with shareholder litigation in the U.S.). But it’s another setback for plaintiffs who bring claims based on allegations that, if true, would violate the Foreign Corrupt Practices Act.

Top Risks of 2010

If the 2009 top risks were first and foremost about developed states having their wits sufficiently about them to get through the financial crisis (with the US Congress leading the pack), as the world now emerges from recession the risks begin to shift to the challenges created by the emergence of a new global order–developed vs. developing states, the old unipolar system vs. the emerging non-polar one, and the old dominant globalized system of regulated free market capitalism vs. the growing strength of state capitalism.

Study debunks analyst recommendations myth

The study, conducted by Dr. Oya Altınkılıç of the University of Pittsburgh and Dr. Robert Hansen and Vadim Balashov of Tulane University, builds on a previous study by Altınkılıç and Hansen that had found analyst recommendations “tend to piggyback on the news” and are relatively “uninformative.”

Deducting Disgorgements from The FCPA Blog

The lesson is that FCPA-related disgorgements — which have reached hundreds of millions of dollars — may be deductible. It depends chiefly on what the SEC intends and how the agreement describing the disgorgement is written to reflect that intent.

Darth Vader and the New York Stock Exchange

Is this going to improve the image of the stock market? Darth Vader ringing the opening bell at the NYSE?!

Lucasfilm Ltd. Brings the Force to the New York Stock Exchange This Holiday Season – press release

After more than 30 years, Star Wars maintains its position as the #1 selling licensed toy property in the US, with sales over 60% ahead of any other toy license, and 25% ahead of the nearest boys toy property. To mark the occasion, Lucas Licensing’s Howard Roffman rang The Opening Bell.

Out With the Old, In With the New

New Year’s Eve is generally a time to reflect on the past and look forward to the future. For many it also involves an excessive amount of alcohol, an expensive dinner in a crowded restaurant, or a long wait for Chinese food delivery.

I’m sure there is a compliance story in there somewhere. But I’m just going to enjoy taking some time off. Enjoy the end of your year and the start of the next.

Merry Christmas

Christmas tree in Faneuil hall in boston

I’m taking a few days off for the holiday weekend.

Image by Das Nili in Wikimedia: Christmas tree near the Quincy Market.jpg

The Twelve Days of Compliance

Sing it with me:

On the first day of compliance, my audit gave to me: Madoff in a prison jumpsuit.
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On the second day of compliance, my audit gave to me: Two legal frauds, and Madoff in a prison jumpsuit.
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On the third day of compliance, my audit gave to me: Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the fourth day of compliance, my audit gave to me: Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the fifth day of compliance, my audit gave to me: Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the sixth day of compliance, my audit gave to me: Six governance lapses, Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the seventh day of compliance, my audit gave to me: Seven black swans a swimming Six governance lapses, Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the eighth day of compliance, my audit gave to me: Eight bribes in billing Seven black swans a swimming Six governance lapses, Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the ninth day of compliance, my audit gave to me: Nine trades a-troubling Eight bribes in billing Seven black swans a swimming Six governance lapses, Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the tenth day of compliance, my audit gave to me: Ten laws a-changing, Nine trades a-troubling, Eight bribes in billing, Seven black swans a swimming, Six governance lapses, Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the eleventh day of compliance, my audit gave to me: Eleven accounting errors, Ten laws a-changing, Nine trades a-troubling, Eight bribes in billing, Seven black swans a swimming, Six governance lapses, Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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On the twelfth day of compliance, my audit gave to me: Twelve data breaches, Eleven accounting errors, Ten laws a-changing, Nine trades a-troubling, Eight bribes in billing, Seven black swans a swimming, Six governance lapses, Five Ponzi schemes. Four enforcement letters, Three background checks, Two legal frauds, and Madoff in a prison jumpsuit.
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Compliance Bits and Pieces for December 18

Here are some interesting stories from the past week:

“Mr. Ruehle, You Are a Free Man”: Judge Carney’s Dramatic Dismissal of the Broadcom Backdating Criminal Case by Kevin M. LaCroix in The D&O Diary

There has been widespread news coverage of the dramatic December 15, 2009 decision of Central District of California Judge Cormac Carney to throw out the options backdating related criminal charges against Broadcom co-founder Henry T. Nicholas III and CFO William Ruehle, based on prosecutorial misconduct.

It’s NOT Just a Fantasy: Company Fires Employees for Running Fantasy Football League, For Real by Daniel Schwartz on the Connecticut Employment Law Blog.

This week, it was reported that Fidelity Investments fired four employees (including relationship managers to various clients) who were running various fantasy football leagues. What was curious about the company’s statement for the rationale for the firing was not so much using company time and resources for the league but rather it’s designation of fantasy football as a form of “gambling”.

SEC Charges FCPA Compliance Officer with Violations by Thomas O. Gorman in SEC Actions

The SEC brought an FCPA action against Bobby Benton, the Vice President of Western Hemisphere Operations of Pride International, Inc. Mr. Benton was responsible for FCPA compliance in his region. Pride is one of the world’s largest offshore drilling companies. SEC v. Benton, Civil Action No. 4:09-cv-03953 (S.D. Tex. Filed Dec. 11, 2009).

Chief Compliance Officer Now a Full-Time Job By Melissa Klein Aguilar for Compliance Week

Two new studies confirm what those tasked with oversight of corporate compliance probably already know: More and more often these days, the chief compliance officer’s job is a full-time, stand-alone gig, rather than a secondary duty one handles while wearing some other title.
A poll from the Open Compliance and Ethics Group found that of 365 respondents, nearly 75 percent said their company has a chief ethics and compliance officer or someone in a similar role with top-level oversight of compliance. That’s up from only 10 percent in a similar poll from 2005.

Recent Opinion Sheds Light on the Relevance Of Due Diligence to the FCPA’s ‘‘Knowledge’’ Requirement(.pdf) by Kenneth Winer and Gregory Husisian of Foley & Lardner LLP

I admit that I included this article because they refer to me as a “prominent commentator.” See Footnote 3. (Referenced source:
Sounding Off About Third Party Compliance even though I did not make the quoted statement.

The U.S. District Court for the Southern District of New York recently issued an opinion that sheds important light on one of those elements – the ‘‘knowledge’’ requirement. The case underscores that while a failure to perform due diligence when entering into an arrangement with an intermediary (such as a consultant, joint venture partner, or distributor) may expose a company or individual to substantial reputational and legal risks, the FCPA does not require such due diligence.

Herrmann’s Farewell Post Mark Hermann is leaving the Drug and Device Law blog (and private practice)

Compliance Bits and Pieces for December 11

Here are some interesting stories from the past week.

Tis the Season! Where are the gifts from vendors?? from Kathleen Edmond, Best Buy’s Chief Ethics Officer

This time every year we send out reminders to our employees that we do not accept gifts from vendors. At the same time we send letters to our vendors asking that they don’t send our employees any gifts. I usually get questions from employees, and even some vendors, about why we we have this policy.

Second Circuit Defines Employers’ Obligations in Sexual Harassment Claim by Daniel Schwartz on the Connecticut Employment Law Blog

The Second Circuit’s decision in Duch v. Jakubek (decided on Friday, December 4th)… discusses what to do with a supervisor who purposely ignores evidence of sexual harassment. And the court concludes that the supervisor should have known that a female subordinate was being sexually harassed and should’ve done something about it.

Magyar’s Magnum Opus from the FCPA Blog

Magyar Telekom’s SEC disclosure last week about its internal investigation into fraudulent contracting practices could have been short and bland and very ordinary. A typical corporate blank wall. Instead it was abundant in length and detail — one of the most rewarding public disclosures about an internal investigation we’ve ever read. It appeared in the company’s SEC Form 6-K, Report of Foreign Private Issuer, filed December 3, 2009 here.

Did An FCPA Enforcement Action Contribute to a Foreign Coup? by Mike Koehler in the FCPA Professor

In April 2009, DOJ announced (see here) that Latin Node, Inc. (a privately-held telecommunication services company headquartered in Miami) pled guilty to violating the FCPA’s anti-bribery provisions in connection with improper payments made to officials in Honduras and Yemen in order to obtain and retain business. The criminal information (see here) details Latin Node’s efforts to obtain and retain business with Hondutel (the Honduran government-owned telecommunications company) and charges that despite recognized “financial weaknesses” in Latin Node’s proposal, Hondutel ultimately selected Latin Node for the agreement because of various improper payments Latin Node made or authorized to various Honduran “foreign officials.”

FCPA Ending its ‘Most Dynamic Single Year’ With a Bang By Dionne Searcey for The Wall Street Journal Law Blog

Two Florida executives of a Miami-Dade County-based telecommunications company, the president of Florida-based Telecom Consulting Services Corp., and two former Haitian government officials were charged in an indictment unsealed yesterday for their alleged roles in a foreign bribery, wire fraud and money laundering scheme, DOJ has announced.

Why You Shouldn’t Take it Hard If a Judge Rejects Your Friend Request by Ashby Jones on the Wall Street Journal Law Blog

Late last month, the Florida Judicial Ethics Advisory Committee issued an advisory opinion on the use of social networking sites by Florida judges. (Hat tip: Legal Profession Blog.) This little rhetorical appears early in the opinion:

Whether a judge may add lawyers who may appear before the judge as “friends” on a social networking site, and permit such lawyers to add the judge as their “friend.”

ANSWER: No.