“While having any sibling or family member serve as a CCO should not be an immediate cause for concern, the results of the Madoff scheme indicate that the only CCO who could have enabled the Madoff scam to persist was someone who was either:
A) Related to Bernard Madoff
B) Complicit in the fraud
C) Did not adequately fulfill their responsibilities as a CCO or
D) All of the Above.”
She cites two reasons for compliance regimes. One is the diffusion of compliance throughout the organization. The goal is to centralize the management of those functions. The second is the multi-disciplinary approach to compliance. You need different types of knowledge and expertise. In-house counsel needs to relinquish some of the control to group managers.
Are in-house counsel managers first? or are they lawyers first? Which is the better model? Do they exert more influence when they take the role of manager or the role of lawyer? Professor Rostain cited some previous studies on these topics. If they focused on legal risk, they had less influence over corporate decision making. Lawyers limited to explaining the risk and deferring the risk decision to the managers had less influence in the the corporation. One survey responder equated managers as playing offense and counsel playing defense.
Professor Rostain stated an example of counsel making clear what her personal opinion was and what her professional opinion is.
Killingsworth pointed out the dark side of the new powers of general counsel. After SOX, new reporting obligations were forced on general counsel. One problem is that the general counsel may be investigating a potential violation and have a duty to report it at the same time, making it difficult to do both well. Counsel are also worried about the increased risk of criminal action against in-house counsel. You only talk to regulatory people about your compliance program when it has failed. You need to penetrate down to everyone that can get you in trouble and everyone that can keep you out of trouble. Is important to mpve from abstract compliance terms into the mechanics of the business processes.
Straw states that “knowledge of the business” is the most important part of creating an effective compliance program. The face of compliance needs to be visible and accessible. A code of conduct sitting on the bookshelf is not effective.
Barlow focused on risk. She talked about ERM, the process and how it fits into compliance.
In this class action case, the plaintiff claimed that Party City’s request for a zip code in connection with a credit card purchase violated the Act. The trial court agreed, granting the plaintiff summary judgment. The Court of Appeal overturned the trial court concluding that summary judgment should be entered for Party City.
The Court of Appeal found that zip codes are not personal identification information based on the plain language of the Act. The Court of Appeal also examined postal regulations to understand what zip codes encompass. The Court of Appeal determined that zip codes are not “personal” identification information about a particular cardholder.
“A zip code is not an address, but only a portion of it, and knowing a stand-alone zip code has not been shown to be potentially more helpful in locating a specific person than knowing his or her state or county of residence. A zip code is not an individualized set of identification criteria, such as telephone numbers would be, but rather zip codes provide identification of a relatively large group, on the present record.”
Timothy P. Tobin (UPDATE: Apparently he is no longer an attorney at Proskauer) of the Privacy Law Blog of Proskauer Rose LLP pointed out this case.
Ausaf Umar Siddiqui was arrested on federal charges of money laundering and wire fraud. He allegedly charged vendors commissions in exchange for agreeing to buy merchandise at inflated prices.
According to the news stories, he siphoned off as much as $65 million and used the money for Las Vegas gambling.
The revised Code builds on existing Fannie Mae and Freddie Mac seller-servicer guidelines to increase the reliability of appraisals for loans sold to the Enterprises for their portfolios or for securitization. The Code applies to lenders that sell single-family mortgage loans to the Enterprises beginning May 1, 2009 and will help assure that borrowers, homebuyers and secondary mortgage market investors receive fair and independent property valuations.
Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics, asked at a recent meeting of the Business and Organizational Ethics Partnership: “What are the signs that a company is getting it right and addressing the most important dimensions of managing ethics in an organization?”
I am not writing about the financial bail-out. I am focusing on a real estate construction story that happened back in 1978 when Citicorp Center was built On Lexington Avenue in New York City.
Image by Trxr4kds
A portion of the building was constructed on air rights to accommodate a building on one corner of the property. The design put the load-bearing columns in the center of each side instead of the corners. The structural engineer, William J. LeMessurier, designed a wind brace system arranged is a tiered V pattern on each side of the building to enhance the lateral stability.
The building code of New York City required testing of building’s resistance to perpendicular winds. But since the the support columns were at the mid-point of each facade, the building stability was at greater risk from diagonal winds. This problem was discovered after construction of the building.
This put more stress on the building than LeMessurier had anticipated. The problem became critical when the braces had been changed from the more-expensive welded joint to a bolted joint.
LeMessurier calculated that the building would only be able to handle a 16 year storm. Basically, the Citicorp Center building could collapse in a moderate hurricane. It was July and hurrican season was approaching.
LeMessurier deatiled the mistakes in a document called “Project SERENE.” The acronym stood for “Special Engineering Review of Events Nobody Envisioned.” LeMessurier convinced the building owner to weld on reinforcing braces. The repair was conducted under a cover story to prevent panic. panic that would surely come from the thought of a 59 story building collapsing in a heavy wind.
Among the courses of action he briefly considered was driving along the Maine Turnpike at a hundred miles an hour and steering into a bridge abutment without telling anyone else about the problem he had discovered. Another was silence. Few people knew about the problem.
By blowing the whistle on himself, he risked professional disgrace, litigation, and bankruptcy.
“It wasn’t a case of ‘We caught you, you skunk. It started with a guy who stood up and said, ‘I got a problem, I made the problem, let’s fix the problem.’ If you’re gonna kill a guy like LeMessurier, why should anybody ever talk?”
Wicked Local Newton is reporting that the Maynard, Massachusetts superintendent of public works was arrested for soliciting cash payments from a private developer in exchange for relaxing permitting and inspection requirements: Maynard public works chief, a Newton resident, charged with accepting bribes.
Paul Camilli, 38, of Newton, let an unnamed developer know that he would let the project move easier through the deadlines and technical demands in exchange for cash payments.
