Category: Publish to KM Space

Snow and Compliance

Dilbert.com

I’m staring out my front door at a half foot of snow, swaying branches heavily laden with wet snow, and an un-plowed street.

The latest weather report for Boston:

A Blizzard Warning remains in effect until 8 PM EST this evening.

* Locations… the East Coast of Massachusetts from Scituate northward.

* Hazard types… snow and blowing snow.

* Accumulations… 12 to 16 inches of snow.

* Timing… the heaviest snow will fall through noon time. Snowfall rates of 2 to 3 inches per hour are possible at times.

* Impacts… hazardous travel conditions expected. Heavy snow will significantly impact the morning commute. Strong northeast winds will combine with heavy snow to create blizzard conditions at times.

* Winds… north 20 to 30 with gusts up to 45 mph.

* Visibilities… one quarter mile or less at times.

Precautionary/preparedness actions…

A Blizzard Warning is issued when sustained winds or frequent gusts over 35 mph are expected with considerable falling and/or blowing and drifting snow. Visibilities will become poor with whiteout conditions at times. Those venturing outdoors may become lost or disoriented…
so persons in the warning area are advised to stay indoors.

I will take that advice and stay indoors.

Sometimes compliance means a day working at home with the kids.

Happy New Year

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.

“Free” and the Black Swan

I’ve talked in the past about the Black Swan by Taleb and at other times about Free by Chris Anderson. I think I missed a connection between the two.

Taleb points out that the Black Swan event is only a surprise to one side. The turkey thinks life is great living on the farm. Until Thanksgiving comes around. Thanksgiving may be a surprise to the turkey, but it’s not a surprise to the farmer.

In looking at the Free model, is there a Black Swan connection? I think this cartoon puts it nicely.

The “Free” Model from Geek and Poke

Email, Warrants and Corporate Email

Inside the company, you can take away your employees expectations of privacy when it comes to email. It has been unclear whether the same is true when it comes to the government inspecting your email. Surprisingly, there has been little law on whether your email would be subject to same protections as your phone calls from government snooping. Does the government need a warrant to obtain the contents of your email from your internet service provider?

The latest case to address the issue is U.S. v. Warshak out of the Sixth Circuit Court of Appeals which held:

If we accept that an email is analogous to a letter or a phone call, it is manifest that agents of the government cannot compel a commercial ISP to turn over the contents of an email without triggering the Fourth Amendment. An ISP is the intermediary that makes email communication possible. Emails must pass through an ISP’s servers to reach their intended recipient. Thus, the ISP is the functional equivalent of a post office or a telephone company. As we have discussed above, the police may not storm the post office and intercept a letter, and they are likewise forbidden from using the phone system to make a clandestine recording of a telephone call—unless they get a warrant, that is.


The case is based on charges against the manufacturer of Enzyte with its Smilin’ Bob commercials. The company got into mess of mail and wire fraud because of their sales practices and banks closing down their accounts.

The government seized 27,000 emails from the company’s internet service provider under the the Stored Communication Act (18 U.S.C. §§ 2701 et seq.), a statute that allows the government to obtain certain electronic communications without procuring a warrant. As you might expect, the company objected to this government action.

Once you become a registered investment advisers, you are going to be subject to inspection by the Securities and Exchange Commission. The SEC will likely not need a warrant for any records or communication required to be kept under the Investment Advisers Act. You can’t have an expectation of privacy for stuff you are required to submit to SEC examination.

As an employer, you own the hardware and the network and you can decide how your employees use them. If you clearly state that your employees have no expectation of privacy for email on the company’s network then you are free to dig into their email traffic as part of an internal investigation.

The Warshak case is important for criminal law, but has no effect on corporate email policies.

Sources:

The Fabulous Fab Rule

Don’t write emails so provocative that they wind up reproduced on the front page of the Wall Street Journal.

With many fund managers having to register under the Investment Advisers Act, they will now be subject to more extensive record-keeping requirements. That means more emails will be saved for a longer period of time.

Those questionable emails will preserved for litigants and federal regulators to see, long after you hit the delete button in Outlook.

E-mails from Goldman Sachs Group Inc. director Fabrice Tourre are the center of the case saying Goldman misled investors. In one he wrote, “The whole building is about to collapse anytime now,” according to the complaint. “Only potential survivor, the fabulous Fab.”

(I need to give credit to Kevin LaCroix of The D&O Diary for the new name for this rule: The Essential Lessons of the “Faithless Servant”.)

Here is another great email quote from the Fabulous Fab:

“When I think that I had some input into the creation of this product (which by the way is a product ofpure intellectual masturbation, the type of thing which you invent telling yourself: “Well, what if we created a “thing”, which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price ?”) it sickens the heart to see it shot down in mid-flight. .. It’s a little like Frankenstein turning against his own inventor;)”

The other detrius that ended up in front of the Senate Subcommittee on Investigations were the email love letters from Fab to his girlfriend. Another reminder to keep personal email off the company’s network and company time.

Sources:

Who Can Define Values?

A cynical look from Dilbert at corporate culture creation:

Dilbert.com

Some of the comments to the comic reinforce this cynical view of corporate values (and ethics):

kmulchandani:

Just Brilliant! i had a boss who always preached in a code of ethics and values, but when it came to him he was always excused. Quoting him it was – “for the greater good” or “my experience tells me that in this case it can be ignored”. “Values” are a subjective term, flowing down a corporate hierarchy, with the ones on top enforcing them onto their “minions”.

It’s not about stating what values and ethics should be. It’s what values and ethics are evidenced by the actions of your company’s employees at all levels in the organization.

Holiday Compliance – Don’t Impale Rudolph

It’s the holiday season. Like the Macy’s Thanksgiving Day parade, your community may run a similar parade.

They need to pay attention to compliance issues.

Particularly, they need to compare the height of the parade’s balloons to overhead power lines and traffic signals. For your entertainment, a parade that failed.

Nominations Open for the 2010 Clawbies

Nominations are open for the 2010 Clawbies, , honoring the best in Canadian legal blogs.

My old blog, KM Space, was a past two-time winner of a Clawbie: Friend of the North 2007 and Friend of the North 2008. Compliance Building stayed on the Clawbie list for 2009.

It looks like I didn’t pay much attention to Canada during 2010, since I only published two Canada posts:

With the flurry of regulatory changes happening south of the 49th Parallel, I have not paid much attention to the Canadian law blogs dealing with compliance, privacy, ethics and other topics that interest me here at Compliance Building.

I will throw two blogs in for nominations:

  1. Brian Bowman – On the Cutting Edge. This was the only Canadian blog that made it into one of my blog posts for 2010. It’s only fair that I nominate it.
  2. The Business Ethics Blog by Chris MacDonald. He has a Ph.D. instead of a JD and business ethics is not a pure legal topic. However, if business lawyers are not thinking about business ethics, then they are not doing their jobs very well. Just because something is legal, does not mean it is ethical or a questionable move by the company.

I would also throw Stem Legal’s Law Firm Web Strategy blog and Jordan Furlong’s Law 21 into pool, but since they are sponsors, I assume they are not eligible. (Oddly, Law 21 garnered a nomination from the American Bar Association for their Blawg 100. I guess the ABA is looking to annex Canada.)

Happy Thanksgiving

That means an extra long weekend for me.

Down the road at Plimouth Plantation they hold onto the belief that the first Thanksgiving in the United States happened in 1621 at their location:

The history of Thanksgiving goes much further back than Plymouth and 1621. In fact, people across the world from every culture have been celebrating and giving thanks for thousands of years. In this country, long before English colonists arrived, Native People celebrated many different days of thanksgiving. “Strawberry Thanksgiving” and “Green Corn Thanksgiving” are just two of kinds of celebrations for the Wampanoag and other Native People.

In 1621, the English colonists at Plymouth (some people call them “Pilgrims” today) had a three-day feast to celebrate their first harvest. More than 90 native Wampanoag People joined the 50 English colonists in the festivities. Historians don­t know for sure why the Wampanoag joined the gathering or what activities went on for those three days. Form the one short paragraph that was written about the celebration at the time, we know that they ate, drank, and played games. Back in England, English people celebrated the harvest by feasting and playing games in much the same way.

The English did not call the 1621 event a “thanksgiving.” A day of “thanksgiving” was very different for the colonists. It was a day of prayer to thank God when something really good happened. The English actually had their first thanksgiving in the summer of 1623. On this day they gave thanks for the rain that ended a long drought.

Enjoy the long weekend, if you can.

The First Thanksgiving by Jean Leon Gerome Ferris