Category: Compliance Bricks and Mortar

Tuesday Morning Quarterback and Compliance

tuesday-morning-quarterback

What do these have in common? Gregg Easterbrook includes Tim Geithner, Charles Ponzi, Allen Stanford and Ron Blagojevich in his annual mock of mock football drafts.

For those of you have who have not read Gregg Easterbrook’s Tuesday Morning Quarterback, he is not your normal football scribe. Gregg Easterbrook is a contributing editor for The New Republic, The Atlantic Monthly and The Washington Monthly. He is also the author of The Progress Paradox: How Life Gets Better While People Feel Worse, and other books. If the name sounds familiar in legal circles, that’s because his brother is Frank Easterbrook, Chief Judge of the United States Court of Appeals for the Seventh Circuit.

Besides the content on the mock of the mock drafts and his annual prediction for the seventh round of the draft (as likely to be right as any of the mock drafts for the first round), Gregg offers his opinions on the AIG bonus scandal, linking Easter and Passover, and the series finale of “Battlestar Galactica” complaints.

Happy Patriots’ Day!

redcoats

The Redcoats are coming! The Redcoats are coming!

Patriots’ Day is a Massachusetts state holiday commemorating the opening battles of the American Revolutionary War in Lexington and Concord in April, 1775. In the morning there is a battle reenactment on the Lexington Green of the early-morning engagement between the town’s militia and the British regulars. If you remember back to U.S. history class, that battle was the shot heard round the world.

There is also a re-enactment of the rides of Paul Revere and William Dawes from Boston out to Lexington. (You don’t know about Hawes because Longfellow didn’t write a poem about him.) That ride started out with the “one if by land, two if by sea” signal to Charlestown in case Revere and Dawes were captured.

The more modern day event is the running of the Boston Marathon, starting in Hopkinton and ending 26.2 miles later in Copley Square. This year is the 113th running of the race.

What does this have to do with compliance or business ethics? Nothing. It’s a holiday here in Massachusetts so I am out of the office.

See also:

Quick Hits

Some quick hits on stories that interest me, but did not make it to a full post:

SEC Posts XBRL Compliance Guide from The Filing Cabinet by Melissa Klein Aguilar

The staff of the Securities and Exchange Commission has posted a “small entity compliance guide” on its rules that require companies to submit financial statements tagged using eXtensible Business Reporting Language to the Commission and to post them on their corporate Websites.

Data Breach: Identity Theft Risk Insufficient to Support Claims by Hunton & Williams LLP’s Global Privacy and Information Security Law and Analysis

The mere increased risk of identity theft following a data breach is sufficient to give the data subjects standing to bring a lawsuit in federal court but, absent actual identity theft or other actual harm, claims against the data owner and its service provider for negligence and breach of contract cannot survive, a federal judge ruled this month.  Ruiz v. Gap, Inc., et al., No. 07-5739 SC (N.D. Cal. April 6, 2009).

Updating Your Gift & Entertainment Policy by Melissa Klein Aguilar for Compliance Week

In a recent survey of more than 500 compliance and ethics professionals, 46 percent said their organization hasn’t significantly updated its gift and entertainment policy in the last year. Of that group, 20 percent admitted it’s been at least three years since their policies were significantly updated. Observers say compliance executives have plenty of reasons to give those policies a fresh look, not the least being the continued enforcement crackdown on bribery.

Corresponding with Cornelius

one_financial_center_boston

Here are some of my recent comments on some other blogs or other websites that allow comments.

I am happy to have you leave comments at Compliance Building. But if not here, take a look at what other people are saying. Join me in the conversation over there.

What Would You Do?? by Heather Milligan of The Legal Watercooler

Heather comments on the $80,000 paid vacation offered by Skadden posting, if I were a Skadden associate, I would take this opportunity to explore my passions. Perhaps law is it … but maybe not. Why not take this time to figure it out while you are young and relatively unencumbered? I commented that law schools should seize the opportunity and offer some specialty programs to provide some additional specialized education to these lawyers with time on their hands.

Obama Knows Where the Wild Things Are

Over on  my personal website, I found a video of President Obama reading Where the Wild Things Are.

Personal, Private, Professional, Public by Mike McBride of The Many Faces of Mike

Chatting about my 4Ps of publishing to the internet

What I’d Do: Part 2 – First We Focus On The Client by Francine McKenna of re: The Auditors

Francine has a great discussion about the divided loyalties of auditors and the effects of the recent reductions in their workforce.

Catch the Wave: Client Data is Becoming Cloud-Bound by Gary Levine on Capitalization Matters

Gary looks at some of the ways law firm client information is moving into the cloud, including my post on extranets.

Image is by Solarapex published on Wikimedia Commons and made available through a Creative Commons license: One Financial Center (Boston)

What Can We Learn About Compliance Programs From a Robot

tweenbot

We all need some help if we want to get to our destination. I was struck by Kacie Kinzer’s experiment using this “tweenbot” in New York City. “Tweenbots are human-dependent robots that navigate the city with the help of pedestrians they encounter. Rolling at a constant speed, in a straight line, Tweenbots have a destination displayed on a flag, and rely on people they meet to read this flag and to aim them in the right direction to reach their goal.”

This simple little robot, that can only roll in a straight direction at a constant speed, made it from Northeast Corner of Washington Park in NYC to the Southwest Corner of the park. It took 29 people to intervene: pushing the little robot in the right direction, pulling it out form under park benches, and redirecting it away from the curb.

I think there are some lessons that a compliance professional can learn from this experiment:

  • Simplicity works
  • Put on a human face
  • Have a clear goal
  • Allow others to help you

Are there any other lessons that you saw?

Here is a video showing parts of the Tweenbot’s journey through Washington Park:

Thanks to Jenny Williams from GeekDad for this story: Tweenbots: Help a Lost Robot Find Its Way.

Corresponding with Cornelius – a new series of blog posts

200-state-street

Not all of my online conversations take place here at Compliance Building. I try to make as many comments in other places as I do here. Twitter is a sporadic stream of thoughts, comments, and replies. I also try to leave as many comments on other blogs as I do posts here. I think you should join some of those other conversations. Here are some other blog posts that caught my eye and made me leave some commentary.

Corresponding with Cornelius on Collaboration with Clients by David Hobbie at Caselines

A follow up to my earlier post on Extranets for law Firm and Client Collaboration

Why Corporate Ethics is Usually an Oxymoron by Charles Green of Trust Matters

Charlie does not like the idea of ethics being treated as separate process and an individual course. I agreed.

Live Events in the Age of Social Media by Bill Pollak of Incisive Media

Bill points out the ways Twitter and the social internet are changing the ways conferences are run and what happens after. I point out that they are also changing what happens before the conference.

How Are Lawyers using Twitter by Simon Chester on Slaw.ca

I share the ways I use Twitter.

Training: What Works? By Alexandra Wrage on the wrageblog

A great grouping of four types of workers in anti-bribery training. I note that the same paradigm can be applied to most compliance and ethics training.

Social Networks and Employer Branding by Brand for Talent

Mark and I are writing some guidelines on the use of social media for our readers. We invite you to join the conversation.Let us know how you think we can embrace these tools versus police them. I offered up my draft blogging / social internet policy.

The Three Types of Collaboration by Jordan Furlong of Law 21

Jordan sets out a paradigm of three types of collaboration: Lawyer-to-lawyer, lawyer-to-client, and client-to-client. It is one of the few times I have disagreed with Jordan.

I have to credit David Hobbie with coming up with the phrase “Corresponding with Cornelius” which led to this blog post title and this new series of blog posts. (At least new for me.)

Martindale-Hubbell’s Counsel to Counsel Forum

lexisnexis

The folks over at Martindale-Hubbell were nice enough to invite me to their latest Counsel to Counsel Forum in Washington D.C. The forum operates under the rule that “what is said in the room stays in the room” so I will not share any details, but there were a few themes that I think I can share.

The intent of Martindale-Hubbell Counsel to Counsel Forums is to bring together senior corporate counsel and a few law firm partners to share best practices in the management of corporate legal departments, provide an opportunity to engage in meaningful dialogue about key issues, and to network in a relaxed atmosphere. I think it accomplished those goals.

The two day forum kicked off with panel discussing challenges to building legal teams and ways to better manage in-house/law firm teams. That lead to a break out session that continued some of the discussions. It became clear that big law firms may not understand the pressures that many in-house legal departments are experiencing. Several attendees noted that their budgets had been dramatically slashed. Any law firm sending out a rate increase notice is going to risk getting fired on the spot.

The second day kicked off on a (high?) note with my panel on Technology, Tools & Knowledge Management for High-Performance Legal Teams 2.0. I was joined by Jeff Brandt and Eugene Weitz. I implored the audience to think beyond email. I think one of the ways to build a better legal team is to build better ways to communicate. My earlier post on Extranets for Law Firm and Client Collaboration – Moving Beyond Email embodied most of my points. As Jessica Lipnack taught me, I tried to get around the room and have everyone introduce themselves and bring up an example. We didn’t get very far in the introductions because the discussion really kicked off. One attendee shared a success story with SharePoint. I shared my love/hate relationship with SharePoint.

We moved on to another session about teams, the characteristics of good teams, the characteristics of bad teams, and some ways to covert your team from bad to good.

Of course there were many interjections about Martindale-Hubbell Connected. Thankfully, they were more like product placements than sales pitches. Of course the Forum was on their dime so Martindale had every right to pitch their product. I skipped one session to speak with some of the folks behind Connected. They seem committed to developing the community and continuing to improve it. My take is that they are struggling with how to deal with Web 2.0 and online communities, just like most companies are struggling with it. But they do see the challenges and the opportunities. They are listening to the criticism, learning, and incorporating suggestions into the development of the platform.

I ended the day by chairing the breakout session on compliance, risk, and governance. The attendees in the session were very diverse with very different needs and different concerns. There were several common themes and concerns. Susan Slisz of LexisNexis did a great job helping the organize the discussion. I think everyone in the session had something they could bring back to their company.

If you have the opportunity to attend a Martindale-Hubbell Counsel to Counsel Forum you should go. It will be well worth your time.

Bits and Pieces on Compliance

Here are a few stories and items that caught my eye this week, but I have not had time to build-out to a full post: The FCPA Enforcement Report of the First Quarter of 2009 from The FCPA Blog

We count seven Foreign Corrupt Practices Act enforcement actions since the start of the year, including indictments, pleas and settlements, along with one newly disclosed investigation. Four of the enforcement actions involve individuals, and four relate to KBR. By this time last year, there had been just a couple of new enforcement actions (2008 finished with eleven organizations and twenty-six individuals being either charged with new FCPA offenses, settling enforcement actions, or having charges amended, reinstated or affirmed). Here’s this year’s rundown so far: . . .

Profiles in Power: The 20 most influential general counsel in America from the National Law Journal

In this inaugural publication of The National Law Journal’s Most Influential General Counsel, we have highlighted 20 attorneys whose leadership has proven strong — and even creative — during the turmoil in the legal industry.

OIG Recommends Action on Reg D Issues, Form D Changes from Melissa Klein Aguilar of The Filing Cabinet

The Securities and Exchange Commission should take steps to better ensure compliance with Regulation D, to act when it finds non-compliance, and should make better use of Form D information. That’s according to a March 31 report by the SEC’s Office of Inspector General, which reviewed Corporation Finance’s process for assessing whether companies appropriately use Reg D, the rule that allows exemptions from federal registration under the Securities Act of 1933 for limited offerings of securities.

Mass. Regulator Accuses Madoff Feeder Fund of “Fraud” by Kevin LaCroix of The D&O Diary

In an April 1, 2009 administrative complaint (here), Massachusetts Secretary of the Commonwealth William Francis Galvin accused Madoff feeder fund Fairfield Greenwich Advisors and its Bermuda affiliate of “complete disregard of its fiduciary duties to its investors” and of “flagrant recurring misrepresentations” that “rise to the level of fraud.”

Landmark Agreements Clear Path for Government New Media

Answering President Obama’s call to increase citizen participation in government, the U.S. General Services Administration is making it easier for federal agencies to use new media while meeting their legal requirements. For the past six months, a coalition of agencies led by GSA has been working with new media providers to develop terms of service that can be agreed to by federal agencies. The new agreements resolve any legal concerns found in many standard terms and conditions that pose problems for federal agencies, such as liability limits, endorsements, freedom of information, and governing law.

YouTube Edu – Law Law School Lectures on YouTube

Bits and Pieces on Compliance

Here are a few stories and items that caught my eye this week, but I have not had time to build-out to a full post:

SEC Speaks on Compliance Issues to Investment Advisers by Joel Beck of BD Law Blog

Lori Richards, the Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE) spoke on issues that the examiner staff will be reviewing. Here is a summary of Ms. Richards’ four key areas, but compliance officers for RIAs ought to take 4 minutes and read her speech:

1. Disclosure. The SEC is reverting to the main focus of securities regulation: disclosure. Here, RIAs should be careful that all disclosures are made to their clients, including any conflicts of interests.
2. Custody. Are your advisory clients’ assets safe? How do you know? With recent headline-grabbing articles on ponzi schemes and other fraudulent conduct, Ms. Richards indicated that SEC examiners will be focusing on controls over custody of assets.
3. Performance claims. Are yours accurate? They better be.
4. Resources. Does your compliance program have adequate resources devoted to it to ensure that the RIA carries out an effective compliance program?

Spotting a Ponzi scheme or investment scam by Tracy Coenen of The Fraud Files Blog

Have you invested with a potential Ponzi?.. . How would you spot a Ponzi scheme?

  • Does the business of the company make sense in light of market conditions and your general business knowledge?
  • Does the company exist because of some secret, revolutionary new process or product? If so, what proof is there that the technology or process is legitimate?
  • Does the company rely on some rare gem, piece of real estate, antique, or other hard-to-find item? If so, is the investment scheme really scalable to the extent that the promoters suggest?
  • Is the company guaranteeing rates of return on investments with them?
  • Can their promises be verified in any way?Does the company have a board of directors, auditors, lawyers, and other advisors typical of a company of its size?

SEC’s OCIE Unit Ramps Up Training on Detecting Ponzi Schemes by Bruce Carton of Securities Docket

Burned by its high-profile failure in the Madoff case, the SEC is ramping up its training of staff on how to detect certain types of securities fraud. Reuters reports that the SEC’s inspection unit (the Office of Compliance Inspections and Examinations) is now offering 90-minute classes for employees on topics such as “Basics of Ponzi schemes, affinity fraud and related schemes” and “Exam issues and techniques for detecting Ponzi schemes, affinity fraud and related schemes.” “We’re doing it because of Bernie Madoff,” one SEC official told Reuters.

The New York Times Blogophobia by Felix Salmon for Portfolio.com

What’s with the sudden blogophobia at the NYT? Between Craig Whitney’s astonishingly tone-deaf memo on how to write a blog, and the legal department’s heavy-handed nastygram trying to shut down Apartment Therapy, it seems that one of the most web-savvy media companies in the world has finally reached the point at which it reckons that the web-savvy types can’t be entrusted with the website any more, and the grownups need to step in and screw everything up.

What Do Bernie Madoff, the Loch Ness Monster, and Alex Rodriguez Have In Common?

They are in the 2009 edition of Topps’ Allen & Ginter series of Trading Cards.

topps

The set will consist of 350 cards: 230 baseball players, 30 rookies, 25 historic figures and 15 world champions. It also will include 50 short-printed cards. Among the unusual inclusions to the basic set are Old Faithful (the Yellowstone geyser), Brigham Young, Loch Ness Monster, Vincent Van Gogh, General George Custer, Olympic swimmer Michael Phelps.

Also, there will be a “world’s biggest hoaxes, hoodwinks and bamboozles” set that will include Charles Ponzi, The Runaway Bride, Enron, Cold Fusion, Bernie Madoff and The War of the Worlds.

(I believe A-Rod is part of the baseball players collection.)

topps_2

Thanks to Bruce Carton of Securities Docket for pointing out The Bernard Madoff Trading Card.

See: