Corruption Crime & Compliance

In July 2019, the Justice Department's Antitrust Division issued its Guidance for Evaluation of Compliance Programs.  Based on this comprehensive document, companies need to review and enhance their antitrust compliance programs to address risks of anti-competitive cartel activity, including price-fixing, bid-rigging, territorial and customer allocations. In this Episode, Mike Volkov reviews the elements of an antitrust compliance programs and provides practical advice for implementing an effective antitrust compliance program.

In a record setting FCPA enforcement day, the SEC settled three separate FCPA enforcement actions on Friday, September 27, 2019.  The three cases involved: Quad/Graphics, a Wisconsin company; Barclays Bank, a global bank, and Westport Energy, a clean energy company, and its former CEO, Nancy Gougarty.  Each of the cases involved interesting enforcement facts and situations. in this Episode, Michael Volkov reviews each case and analyzes the facts surrounding the violations and the respective settlements.  

In a significant development, the Business Roundtable issued a restatement of general corporate purpose.  The restatement embraces a number of important social trends and awareness of ethical culture and broader principles.  While the statement is laudatory, the proof will be in tangible actions taken to implement the broad and important purposes. In this Episode, Michael Volkov examines the Business Roundtable Restatement and reflects on the important role that corporate boards should play in the oversight of a company's ethical culture.

Capital One suffered a serious data breach as a result of the actions of one individual who downloaded nearly 30 GB of 100 million Capital One Financial Corporation credit applications from an Amazon cloud data server. The Capital One data breach underscores the risk of cyber breaches caused by a single bad actor who gained unauthorized access through Amazon's could data server. This unfortunate data breach demonstrates the importance of managing data security risks through third parties (in this case a cloud vendor). In this episode, Michael Volkov reviews the Capital One data breach and outlines third-party cybersecurity risks and strategies for mitigating these risks.

In this episode, Michael Volkov provides an update on FCPA issues, including: (1) Juniper Networks' FCPA settlement with the SEC for $11.7 million for conduct in Russia and China: (2) Deutsche Bank's FCPA settlement with the SEC for $16 million for hiring of relatives of foreign officials in China and Russia; and (3) the Second Circuit Court of Appeals decision affirming the conviction and sentence of Ng Lap Seng for bribery of United Nations officials and rejecting application of the Supreme Court's decision in McConnell to FCPA cases.      

On January 1, 2020, companies will be facing a compliance requirement established by the California Consumer Privacy Act. In practice, California’s CCPA will create a new “national” standard.   The CCPA is designed to give consumers more information and control over their personal information. Specifically, businesses will be required to be more transparent in their handling of personal information and to provide robust disclosures to consumers about how their information is being used.   Many businesses raced to the finish line to meet GDPR requirements. Certain requirements imposed by GDPR will have applicability in the CCPA context; however, there are significant differences in scope and intent that require careful attention. Companies that conduct business in California, collect personal information from California residents, process (or have third party process) such personal information, and meets certain revenue thresholds are subject to the CCPA.   In this Episode, Michael Volkov discusses the CCPA, outlines its requirements and describes necessary steps for compliance.

Bill Hauserman and Ted Datta from Bureau van Dijk, a Moody's Analytics Company, join us for an interesting discussion on third-party risk management, issues surrounding beneficial ownership, trends in the industry and the importance of validating ownership and data quality.  Bill and Ted explain their interesting perspective on third-party risk challenges, regulator expectations and a fascinating view from the global perspective. New anti-corruption regulations and advancements in technology have put significant pressure on banks and corporations to get their compliance right. The issues we address include: The complexity of ownership structures and understanding who the ultimate owner is Why is it interesting to look where the power and control is and how can it be done? Third-party due diligence programs and their evolution in the new regulatory environment The wide array of available RegTech solutions and how to make the right choice for your organization.

On July 22, 2019, Microsoft finally resolved its FCPA enforcement action with a whimper. Notwithstanding prior suggestions that Microsoft’s investigation uncovered global conduct, Microsoft’s liability focused primarily on Microsoft’s conduct in Hungary. Even with the tailored settlement agreement, DOJ and the SEC reiterated robust expectations surrounding third-party distributor networks, particularly in the software industry. To resolve a lengthy six and one-half year investigation, Microsoft entered into a non-prosecution agreement with the Justice Department and an administrative settlement with the SEC. Under the three-year NPA, a Microsoft subsidiary in Hungary, Microsoft Magyarorszag Kft paid $8.75 million criminal penalty. Microsoft agreed to disgorge $13.78 million to the SEC, plus prejudgment interest of $2.78 million.   In this Episode, Michael Volkov reviews the Microsoft FCPA settlement and outlines the lessons learned.  

Global companies face significant challenges in managing their supply chain risks. Most companies incorporate a holistic supply chain risk process as part of their enterprise risk management systems.  Legal risks, while not the most significant risk, is one aspect of these risks, especially in the aggressive enforcement of anti-bribery, sanctions, anti-money laundering and speciality laws surrounding conflict minerals, human trafficking and slavery. In this episode, Michael Volkov examines supply chain risks and discusses effective strategies for increasing legal and compliance participation in supply chain risk management.

Compliance has come a long way over the last 10 years. But it still has a ways to go until it is firmly embedded into the corporate governance landscape. In this episode, Michael Volkov examines current issues surrounding compliance programs, including the state of the compliance profession, technology and new frameworks; government enforcement trends and predictions; and congressional mandates for compliance.