Podcasts Archives - Corruption, Crime & Compliance: Recent Episodes
Podcasts Archives - Corruption, Crime & Compliance
Nicolas Garcia is the VP Legal and Regional & Compliance Manager LATAM at Orica, one of the world’s leading mining and infrastructure solutions providers. From the production and supply of explosives, blasting systems, specialty mining chemicals and geotechnical monitoring to our cutting-edge digital solutions and comprehensive range of services. With more than 10,000 employees, Orica has operations in more than 30 countries with offices in the U.S., Europe, Asia-Pacific and Australia.
Nicolas is a Chilean attorney who graduated from the Pontificia Universidad Católica de Chile with a Master of Laws (LLM) degree from Cornell University (US). He has previously served as General Counsel for ENAP a Chilean public company that operates in the acquisition and refining of crude oil for the production of fuels and other petroleum derivatives.
In this Episode Nicolas discusses the challenges facing legal and compliance professionals in Latin America. As party of the discussion, Nicolas identifies significant trends in risks, mitigation strategies and current trends in Latin America.
The post Episode 335 — Nicolas Garcia, GC at Orica, on Compliance Trends and Challenges in Latin America appeared first on Corruption, Crime & Compliance.
The Justice Department is encouraging companies to voluntarily disclose criminal violations — “Come in and confess” and DOJ offers promises of a declination. But even a declination comes with a requirement: the company has to pay disgorgement
In the latest declination case, Boston Consulting Group (“BCG”) earned a declination for FCPA violations stemming from conduct in Angola. BCG, a management consulting firm, earned the declination after self-disclosing the conduct, cooperating with the investigation and remediation of its compliance program.
In an earlier case in April 2024, Proterial Cable America, formerly Hitachi Cable America Inc. (“Hitachi Cable”), was criminally liable for wire fraud and conspiracy, and Hitachi Cable earned a declination and agreed to pay $15.1 Million in disgorgement.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/4f8f027d-e8c6-460b-9724-139a6999a867/episode.mp3The post Episode 336 — Review of Recent DOJ Declinations appeared first on Corruption, Crime & Compliance.
On August 1, 2024, DOJ issued its Whistleblower Policy Pilot Program (“WRPP”). The new program amends its Corporate Enforcement Policy. DOJ also issued a Program Guidance document, a Fact Sheet, Frequently Asked Questions and a dedicated website.
The WRPP will run for three years. The Money Laundering and Asset Recovery Section (“MLARS”) is administering the WRPP. The WRPP will reward individuals who provide “original information” in writing that results in criminal or civil forfeiture exceeding $1 million in net proceeds from a successful prosecution, corporate criminal resolution or civil forfeiture action involving foreign corruption, domestic bribery, crimes involving financial institutions and healthcare fraud related to private insurance.
The post Episode 335 — Review of the DOJ Whistleblower Program appeared first on Corruption, Crime & Compliance.
A New York federal district judge handed down a significant decision dismissing much of the SEC’s securities fraud enforcement action against SolarWinds arising from its claims relating to SolarWinds’ cybersecurity policies, and disclosure of a significant cyberattack against the SolarWinds’ network.
In an unprecedented case, the SEC alleged that SolarWinds, which went public in 2018, mislead the public as to the effectiveness of its cybersecurity practices and products, including its flagship “Orion” software platform. In a “Security Statement” on its website, and in a variety of other public statements, including securities filings, the SEC argued that SolarWinds filings were misleading because SolarWinds failed to disclose that its products and practices were defective in protecting against cyberattacks. The SEC contended that the company’s hype misled the investing public to believe that SolarWinds’ central software product had minimal vulnerability to cyberattacks.
Also, the SEC alleged that SolarWinds misled the investing public about a series of cyberattacks, which culminated in the revelation, in December 2020, that the company and its customers had been victims of a large-scale cyberattack, known as Sunburst, conducted by Russian hackers. The SEC claimed that, in the aftermath of the Sunburst’s immediate aftermath, SolarWinds minimized the scope and severity of the attack, including by omitting that customers had previously reported similarly malicious activity involving the Orion product.
The post Episode 334 — SEC Suffers Dismissal of Claims in Fraud Case Against Solarwinds appeared first on Corruption, Crime & Compliance.
The Boeing 737 MAX case took another dramatic turn. On July 24, 2024, the Department of Justice filed with the United States District Court for the Northern District of Texas a proposed plea agreement with Boeing. The plea agreement, which has been filed under Federal Rule Criminal Procedure 11(c)(1)(C), requires the Court to approve and accept the deal. The Court can reject the plea deal and require the parties to renegotiate the terms.
Under the Plea Agreement, Boeing will plead guilty to the original Information filed in 2021 with the Deferred Prosecution Agreement (“DPA”).
The proposed resolution has been controversial because of the opposition of the families of the victims who have opposed the plea agreement and general disposition of DOJ’s investigation and prior resolutions as insufficient to vindicate the public interest and their rights as victims of Boeing’s malfeasance.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/3c7ee99f-cfb7-46d2-8515-3ad84d6bb5a3/episode.mp3The post Episode 333 — Boeing Plea Agreement in 737 MAX Safety Case appeared first on Corruption, Crime & Compliance.
In a significant expansion of internal controls enforcement, the SEC announced a $2.1 million settlement with R.R. Donnelley & Sons Co. (“RRD”) for its handling of a 2021 ransomware attack and resulting disclosure failures. The settlement represents the SEC’s first application of its internal controls enforcement authority to include cybersecurity policies and procedures. The SEC’s interpretation represents a significant expansion of its enforcement authority.
In 2021, RRD suffered a cyber attack in which a threat actor used deceptive hacking techniques to install encryption software on certain computers and exfiltrated 70 Gigabytes of data, including data tied to 29 client, some of which contained personal and financial information.
In this Episode, Michael Volkov discuses the implications of the SEC’s expansion of internal controls authority to include cybersecurity controls and disclosure procedures.
The post Episode 332 — Deep Dive into SEC’s Internal Controls and Cybersecurity Settlement with R&R Donnelly appeared first on Corruption, Crime & Compliance.
NAVEX delivers quality studies and important insights on ethics and compliance topics. In its 2024 State of Risk & Compliance, NAVEX provides a comprehensive report on current trends and practices involving risk and compliance management.
The Report reflects the survey results from over 1,000 respondents global who influence or manage their organization’s risk and compliance programs. Over half of the respondents came from the United States (56%), while others came from the United Kingdom (12%), France (11%), and Germany (11%). The respondents also were from a broad cross-section of companies in size and industry.
In this Episode, Michael Volkov reviews the results of the latest NAVEX survey.
The post Episode 331 — NAVEX State of Risk and Compliance appeared first on Corruption, Crime & Compliance.
Halyna Senyk, a Senior Program advisor from the CEELI Institute, joins us to discuss anti-corruption progress and challenges in the Ukraine. Halyna is responsible for managing the CEELI Institute’s anti-corruption portfolio.
Based in Prague, the CEELI Institute focuses on promoting the rule of law through professional training programs for judges, law enforcement, lawyers, prosecutors, civil society representatives and investigative journalists. While its main activities are focused in Central and Eastern Europe, the Institute also develops rule-of-law and anti-corruption projects in Africa and South Asia.
Halyna Senyk holds a Bachelor’s and first Master’s degree in international relations and international public law from Ukraine, followed by a Master’s degree in Comparative Law (LL.M) from the London School of Economics. She further pursued Ph.D. studies at the University of Essex. With a background in international public law, comparative law, and international relations, Halyna has developed a career as an international lawyer and analyst.
Her professional experience includes roles with Human Rights Watch, Amnesty International, various UN agencies, and non-profit organizations, including the European Shoah Legacy Institute in the Czech Republic, which she led from 2014 to 2017.
The post Episode 330 – Halyna Senyk on Anti-Corruption Progress in Ukraine appeared first on Corruption, Crime & Compliance.
Bryn Sedlacek, Vice President, Product Management at Aravo, joins us on the podcast to discuss third-party risk management with a focus on holistic risks and unitary visibility. In a wide-ranging discussion, Mike Volkov and Bryn Sedlacek discuss the challenges in implementing a third-party risk management program that captures holistic risks and maintains a consistent, unified line of sight across the organization’s risk profile. As part of our discussion, we focused on:
- Sanctions, capturing source and ultimate destination of products/services and including those in screening, leveraging how we handled conflict minerals as a model and how data intelligence providers can help
- Unified visibility: providing comprehensive visibility to executives and decision makers across risk domains and performance
- InfoSec risk with third parties, where to start
- The future of risk – technology and alternative risk strategies
The post Episode 329 — Bryn Sedlacek from Aravo on TPRM Holistic Risks and Unitary Visibility appeared first on Corruption, Crime & Compliance.
In this new era of aggressive sanctions enforcement, companies have to understand the red lines that define where criminal and civil enforcement risk increase. In contrast to the history of FCPA enforcement, DOJ and OFAC have provided helpful guidance to alert companies where risks are likely to increase.
Sanctions enforcement involves an off mix of civil and criminal line drawing. On the civil side, OFAC has explained that sanctions violations can be found based on strict liability with aggravating factors that turn the actor’s state of mind.
In addition, third party liability for distributors extends to situations where a principal company knew or reasonably should have known that products sold to a third party were intended for shipment to a prohibited entity or individual or to a prohibited country.
Third party liability for violations occurring in a company’s supply chain requires companies to break down its supply chain and learn the sourcing for all companies in its supply chain. It is clear that a failure to examine and assess your supply chain can lead to civil liability.
In defining where criminal enforcement picks up on the culpability spectrum, DOJ and OFAC have defined potential criminal conduct based on the term “willful,” meaning when an actor knew that its conduct was wrong but did not necessarily know the specific law that her/she was violating. Applying the “you know it when you see it” standard, companies have to weigh the evidence of surrounding circumstances to determine if an individual actor or actors possessed the requisite intent.
The determination will turn on the attribution of individual conduct to a company based on respondeat superior principles — that is, whether the conduct was committed in the course of an individual’s duties and in furtherance of a legitimate business purpose.
We do not have enough enforcement examples to track where the precise line falls between criminal and civil. That is still to be defined by reviewing a meaningful record of DOJ enforcement actions against sanctions violations. The situation is akin to the early days of aggressive FCPA enforcement where enforcement and settlement cases were reviewed for important precedent and explanations.
DOJ’s record here is about to be defined and companies, commentators and trade compliance professionals will be reading tea leaves and looking for patterns.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/ca597bae-f0e9-4e82-a258-3c76e37b03f2/episode.mp3The post Episode 328 — Sanctions Enforcement and Red Lines appeared first on Corruption, Crime & Compliance.
LRN has issued another important report — in its latest report, The 2024 Benchmark of Ethical Culture Report, LRN has focused on the critical issue of corporate culture. LRN is a pacesetter and the leader in reliable studies on complex ethics and compliance issues. If not properly promoted or maintained, a defective culture can lead to serious misconduct, government investigation, reputational damage and collateral harm. on the other hand, a positive and effective culture is a company’s most valuable intangible asset — it is tied directly to increased financial performance and sustainable growth.
Over the past few years, business leaders have embraced what compliance and governance professionals already knew– companies with strong ethical cultures outperform other companies with weaker cultures. Employees at ethical companies are more productive, more satisfied, less likely to seek a new job and committed to the company’s mission.
The post Episode 327 — Another Look at Corporate Culture appeared first on Corruption, Crime & Compliance.
Diligent recently released an important report — Cybersecurity, audit, and the board: How does board oversight impact cybersecurity performance? Diligent’s Report includes several key findings on the importance of Board oversight and its importance to cybersecurity performance.
Dottie Schindlinger, Executive Director of Diligent Institute, the global corporate governance research arm of Diligent – joins us to discuss the report and its key findings.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/0848361f-ac8a-4bae-94c9-ce35daa4e211/episode.mp3The post Episode 326 — Dottie Schindlinger on Diligent’s Report on Board Oversight of Cybersecurity appeared first on Corruption, Crime & Compliance.
The new compliance cottage industry surrounds artificial intelligence. We are at such an early stage of AI development — companies are still figuring out how they can employ the technology. Some industries, such as financial institutions, however, have been using AI for fraud detection and other issues. I expect financial institutions will set the tone for much of compliance practices around AI.
There is no question that AI holds terrific promise. The hype surrounding AI is just that — hype. Until there is more certainty surrounding AI technology, I expect we will witness a lot of bloviating. But this aside, corporate boards, senior executives and business developers need to pay attention until the dust settles. The AI industry is moving so fast that the sooner we start to focus the nimbler our response will be.
A few issues we know for certain — AI can be a very productive tool. It can easily end up reducing costs and increasing efficiency. I do not share the doomsayers perspective that AI will result in job losses — I look at from a positive standpoint. By making companies more efficient, the economy will expand and new opportunities will develop and growth will occur. In my view, we are on the cusp of a huge economic jolt — positive, just like pre- to post-Internet days. As I always say — change can be good.
Like every aspect of a business, there are risks with any new technology and AI certainly presents risks that need to be mitigated. This in turn leads to the necessary questions —
How should a company structure its AI risk and compliance program?
in this Episode, Michael Volkov reviews specific issues and questions surrounding AI risks and compliance issues.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/3aab867a-ee86-4225-baa5-b3384a23e9ae/episode.mp3The post Episode 325 — AI Risk and Compliance Frameworks appeared first on Corruption, Crime & Compliance.
With the beginning of the era of the “New FCPA,” as coined by DOJ’s Deputy Attorney General Lisa Monaco, we now need to focus on third-party risk and sanctions enforcement. The law, the practice and the risks are important and not just the same as FCPA legal requirements. As we embark on a new criminal enforcement era surrounding sanctions violations, companies have to address this issue and do it correctly.
In this Episode, Michael Volkov takes a comprehensive look at third-party risks from the distribution and supply sides and outlines appropriate strategies to manage these risks.
The post Episode 324 — Third-Party Risks and Sanctions Compliance appeared first on Corruption, Crime & Compliance.
Carlos Villagrán is the Director of Compliance at CMPC, a 100 years’ old Chilean-based holding company, one of the worldwide leading manufacturers of pulp, paper, packaging, personal care and other forest products.
Carlos discusses the challenges he faced in joining CMPC after a significant crisis — CMPC’s prosecution for antitrust cartel violations in Chile and Peru.
With more than 20,000 employees, CMPC has industrial operations in 9 countries (LatAm and the US) as well as commercial offices in the US, Europe, and China, selling and distributing its products to more than 45 countries around the world.
Carlos is a Chilean attorney who graduated from the Pontificia Universidad Católica de Chile with a Master of Laws (LLM) degree from Georgetown University (US). He has previously served as Compliance Officer for the Chilean operations of Liberty Mutual Insurance and Mitsubishi UFJ Financial Group, as well as Legal Extern at the World Bank’s Integrity Compliance Office.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/d1e6735d-5cf4-4b6c-b9cb-3906eb565ff6/episode.mp3The post Episode 323 — Carlos Villagran Discusses Rebuilding a Corporate Culture After a Crisis appeared first on Corruption, Crime & Compliance.
Over the last ten years, we have seen a marked shift from the Delaware Chancery Court chipping away at corporate board member liability claims. In a number of seminal cases involving Boeing airplane crashes (In re the Boeing Co. Derivative Litig., No. 2019-0907 (Del. Ch. Sept 7, 2021)), and deadly listeria outbreaks from tainted ice cream (Marchand v. Barnhill, 212 A.3d 805 (Del. 2019)), Delaware Courts have upheld plaintiffs’ cases against claims of failing to adequately plead violations of the standards set forth in Caremark, 698 A.2d 959 (Del. Ch. 1996), (establishing basic pleading requirements to withstand motions to dismiss).
In this episode, Mike Volkov provides a comprehensive update on the recent Caremark decisions issued by the Delaware Chancery Court, underscoring their importance for accountability and governance in the corporate world.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/82639668-8e49-4d15-8fb0-678593b058d9/episode.mp3The post Episode 322 — Checking in on the Caremark Cases appeared first on Corruption, Crime & Compliance.
Directive 2019/1937 of the European Parliament and Council dated 23 October 2019 on the “protection of persons who report breaches of Union law” (the “Directive”) is currently being implemented by EU Member States. The directive has broad applicability to organizations operating in the EU internal market and applies to both public and private sector organizations alike. Whistleblowers are guaranteed legal protection to the extent: (1) they have reasonable grounds to believe that the information reported was true at the time of the report; and (2) the whistleblower reported either internally to the organization, externally to a competent authority, or publicly. Private sector organizations with 50 or more workers are legally required to establish channels and procedures for internal reporting of EU law breaches and conduct appropriate follow-up.
In this episode, Mike Volkov is joined by Daniela Melendez and Alex Cotoia from the Volkov Law Group, who bring their expertise to the table as they delve into the EU Directive and its implementation by several member states. Listen to this discussion to understand and navigate the complexities of the EU Whistleblowing Directive.
The post Episode 321 — Review of the EU Whistleblowing Directive wih Alex Cotoia and Daniela Melendez appeared first on Corruption, Crime & Compliance.
NAVEX continues to produce high-quality compliance reports, many of which are a must-read in the compliance industry. Its annual Whistleblower Report is of particular note — NAVEX is the leading provider of hotline services in the world and its data is invaluable as a source of trends in this industry.
This year –2024 — is no exception. NAVEX combed through the data from 3784 organizations for 2023. Its headline conclusion — 2023 was a busy year, a record level of use and the substantiation rate reached an eleven-year high. More reports came in and more were found true. Such an increase is a good sign, not a bad sign. It means that employees trusted their respective hotline reporting system to produce results.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/109e1505-64b9-4516-94ea-c39515284d86/episode.mp3The post Episode 320 — NAVEX 2024 Whistleblower Report appeared first on Corruption, Crime & Compliance.
OFAC is capable of extending a long-arm of enforcement, reaching sometimes non-U.S. companies that may “cause” another company to violate U.S. Sanctions laws. If you need to find an example of this long reach, look no further than OFAC’s recent settlement with SCG Plastics (“SCG”), in which SCG, a Thailand company, which sells plastic resins, agreed to pay $20 million for violations of the Iran Sanctions Program.
From 2017 to 2018, SCG “caused” U.S. financial institutions to process $291 million in wire transfer sales of Iranian-origin high-density polyethylene resin (“HDPE”) manufactured by a joint venture in Iran owned by, SCG’s parent company and the National Petrochemical Company of Iran (“NPC”), a part of the Iran government. HDPE is used to create a wide-variety of injection-molded plastics, including food and beverage containers, shampoo and cleaning product bottles, and other industrial items.
During this time when SCG received wire payments for Iranian-origin HDPE, it initiated U.S. dollar transactions on behalf of the Iran-based joint venture to pay the joint venture’s outstanding debts to third-party vendors. To attempt to disguise the transactions, SCG used shipping and documentation practices that obfuscated the product’s Iran origin and the parties involved, which caused U.S. financial institutions to process these wire transfers in violation of the Iran Sanctions Program.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/2eb27eb4-b07c-4a24-8208-aeb88634501c/episode.mp3The post Episode 319 — Deep Dive into SCG Plastics $20 Million Settlement with OFAC to Resolve Violations of Iran Sanctions Program appeared first on Corruption, Crime & Compliance.
LRN continues to set the standard for ethics and compliance program research. Volkov Law is a supporter of, and advocate for, LRN’s research because it has consistently confirmed what we all know and believe — ethical companies perform better in the marketplace over the long run. It is an intuitive fact that employees respond better to values-based leadership than a rules-based environment and culture. Volkov Law is committed to that mission with our clients, colleagues, partners, and thought leadership.
In this Episode, Michael Volkov reviews the latest LRN Report.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/7c57d96b-8abb-4858-907c-a513301e28e4/episode.mp3The post Episode 318 — LRN’s Recent Study Underscores Importance of Ethical Culture and Values-Based Leadership appeared first on Corruption, Crime & Compliance.
On the heels of the Gunvor FCPA settlement for $661 million, DOJ announced its settlement with Trafigura, the latest commodities trading company to fall under DOJ’s FCPA Sweep against the industry. Trafigura joined the list of international commodity trading companies to suffer FCPA enforcement actions — Vitol, Sargeant Marine, Glencore, Freepoint, and Gunvor.
DOJ’s corporate resolutions are connected to individual prosecutions and guilty pleas of 19 individuals, including six government officials, eight corrupt intermediaries and five trading companies.
Trafigura Beheer B.V. (“Trafigura”), based in Switzerland, plead guilty and agreed to pay $126 million as part of a plea agreement to resolve FCPA violations in Brazil. Trafigura pleaded guilty to conspiracy to violate the anti-bribery provisions of the FCPA and agreed to pay fine of over $80 million and forfeiture of $46 million. DOJ agreed to credit up to $26 million of the fine against amounts Trafigura pays to resolve an ongoing Brazil investigation.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/6b2b2fe1-f482-47cf-814f-889b11fac357/episode.mp3The post Episode 317 — Deep Dive into Trafigura’s FCPA Settlement appeared first on Corruption, Crime & Compliance.
In a recent speech, on March 7, 2024, Deputy Attorney General Monaco announced that DOJ would be implementing in the next 90 days a new whistleblower program to reward reporting of criminal misconduct at both public and private companies. In particular DOJ will encourage reporting of potential violations of the Foreign Corrupt Practices Act (“FCPA”) and the recently-enacted Foreign Extortion Prevention Act (“FEPA”). AAG Monaco noted that DOJ will be particularly interested in “foreign corruption cases” involving “non-issuers and violations of the recently enacted FEPA,” along with criminal abuses of the United States financial system and domestic corruption cases.
DAG Monaco also reiterated the importance of voluntary self-disclosures. DOJ employs a “mix of carrots and sticks” to incentivize companies to build stronger compliance programs that proactively mitigate risks and disclose misconduct to DOJ when appropriate. DAG Monaco underscored the fact that a corporate resolution “will always be more favorable with voluntary self-disclosure.”
In this Episode, Michael Volkov discusses DOJ new initiatives on whistleblowing and encouraging voluntary self-disclosures.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/18443f3d-820c-4250-8758-a483a85ff3ce/episode.mp3The post Episode 316 — DOJ Announces New Whistleblower Program and Encourages Self-Disclosures appeared first on Corruption, Crime & Compliance.
Boeing continues to struggle with its core business activities. As troubles mount for Boeing, it is clear that it continues to suffer from real and pervasive culture issues that have been reflected in serious safety failures, financial difficulties, regulatory violations and serious reputational damage. Boeing’s troubles permeate every part of its organization — from the board to senior executives, to its operations and its overall ethics and compliance commitment. As a result Boeing stands at an important crossroad — will it make a real commitment to change, reform and ethics and compliance, or will it continue to limp along suffering repeated incidents of harm?
In its latest (mis)adventure, Boeing fell victim to a State Department fine for $51 million for violations of a number of export controls, including basic licensing requirements for exports to China and Russia. Boeing voluntarily disclosed the violations to the Directorate of Defense Trade Controls (“DDTC”) in the State Department.
The violations of the International Traffic in Arms Regulations (“ITAR”) included illegal exports to foreign employees and contractors who work in more than 15 countries; a trade compliance specialist fabricating an export license to illegally ship defense items abroad; and violations of the terms and conditions of other export licenses, among other things.
The DDTC’s $51 million penalty is the largest administrative penalty impose for ITAR violations since it imposed a $79 million penalty against BAE Systems in 2011. Under the terms of the settlement, Boeing must pay $27 million to the DDTC within two years and use the remaining $24 million to improve its compliance program and procedures. In addition, Boeing is required to hire a DDTC-approved special compliance officer to oversee its compliance with ITAR for the next three years, and that officer will regularly report to the DDTC on Boeing’s progress.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/b2acfe98-aa71-45bc-b54e-41683d55075d/episode.mp3The post Episode 315 — Boeing Pays $51 Million for ITAR Violations appeared first on Corruption, Crime & Compliance.
In a recent blockbuster FCPA settlement, DOJ announced a $661 million resolution with Gunvor, one of the world’s largest commodities trading companies. DOJ’s settlement represents a “return” to its long-standing aggressive approach to FCPA enforcement. DOJ did not permit Gunvor to enter into a deferred or non-prosecution agreement. Instead, DOJ required Gunvor to plead guilty to one count of FCPA conspiracy.
Gunvor entered into a plea agreement and pleaded guilty to an information charging the company with conspiracy to violate the anti-bribery provisions of the FCPA. Following the plea, the court sentenced Gunvor to pay a criminal monetary penalty of $374,560,071 and to forfeit $287,138,444 in ill-gotten gains. The sentence includes credits of up to one-quarter of the criminal fine each for amounts Gunvor pays to resolve investigations by Swiss and Ecuadorean authorities into the same misconduct so long as the payments are made within one year.
In this Episode, Michael Volkov reviews the Gunvor FCPA settlement.
https://audio-delivery.cohostpodcasting.com/audio/433377ff-16d7-421e-867c-0a97a76cc861/episodes/157bc21d-70fc-4939-984e-c6c0b810968c/episode.mp3The post Episode 314 — A Deep Dive into DOJ’s Gunvor FCPA Enforcement Action appeared first on Corruption, Crime & Compliance.
There are some things you learn best in calm, and some in storm. Will Cather
DOJ has promised an aggressive criminal corporate enforcement program against sanctions violators. The storm is coming and will arrive soon with a bang. There is no question that DOJ’s enforcement initiative is coming — it is just a question as to when.
In this Episode, Michael Volkov reviews the elements of the enforcement program and the likely trends and targets for enforcement.
The post Episode 313 — The Coming Sanctions Criminal Corporate Enforcement Storm appeared first on Corruption, Crime & Compliance.
Companies have a vested interest in preserving internal communications for a variety of reasons — to hold actors accountable and to protect the organization from potential private and government claims or investigations that may have serious direct or collateral consequences. Companies that want to use ephemeral messaging systems can do so, but they have to understand the risks involved and tailor appropriate controls and procedures to avoid potential damage.
DOJ’s Evaluation of Corporate Compliance Programs (“ECCP”) released in March 2023 authorized companies to use ephemeral messaging but emphasized several important risk considerations and controls needed to preserve robust record-keeping requirements. DOJ’s ECCP identifies three significant areas for consideration: employee use of personal devices, availability of communications platforms (e.g., Jabber, Slack, Teams, Google, Zoom), and messaging applications, including ephemeral messaging. DOJ’s ECCP noted that a company’s policies governing messaging applications “should be tailored to the corporation’s risk profile and specific business needs and ensure that, as appropriate and to the greatest extent possible, business-related electronic data and communications are accessible and amenable to preservation by the company.”)
In this podcast, Michael Volkov and Eddie Green, CEO of SnippetSentry, discuss current communications preservation requirements and technical solutions to meet them.
The post Episode 312 — Eddie Green, CEO of SnippetSentry, on Communications Preservation Risks appeared first on Corruption, Crime & Compliance.
In this special episode of Corruption, Crime, and Compliance, Michael Volkov joins colleague and long-time friend Tom Fox as they delve into the intricacies of recent FCPA enforcement actions, shedding light on the evolving landscape of corporate compliance. From the ABB case to the SAP settlement, Michael and Tom dissect the nuances of voluntary disclosure, extensive remediation, and the shifting priorities of the Department of Justice. Join them as they navigate the complexities of recidivism, cooperation, and the pivotal role of self-disclosure in today’s compliance environment.
The post Episode 311: Tom Fox on FCPA Enforcement — DOJ’s Approach to Recidivism and Self-Disclosure appeared first on Corruption, Crime & Compliance.
Christian Focacci is a leader in the artificial intelligence world and harnesses the capabilities for risk management. He is the founder and CEO of Threat.Digital, which has launched a new product DiligenAI. Threat.Digital is leveraging large language models and real-time data feeds to empower organizations to identify risk information confidently and efficiently, setting a new standard in risk intelligence. Mike and Christian discuss AI and its use in compliance third-party risk management.
The post Episode 310 — Christian Focacci, CEO and Founder, Threat.Digital, on AI and Compliance appeared first on Corruption, Crime & Compliance.
On December 31, 2021, President Joseph R. Biden, Jr. signed the the Uyghur Forced Labor Prevention Act (“UFLPA”) into law to address the ongoing exploitation of the ethnic minority Uyghur population by the government of the People’s Republic of China (“PRC”). Among other things, the UFLPA creates a rebuttable presumption that all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in Xinjiang, or by entities designated for inclusion on the UFLPA Entity List, are prohibited from entry into the United States. To overcome the presumption, entities are required to demonstrate, by “clear and convincing evidence,” that such imports were not mined, produced, or manufactured in whole or in part by forced labor.
A growing number of entities whose manufacturing and production processes rely on the timely importation of certain commodities carrying a high risk of forced labor have found themselves subject to the UFLPA’s proscriptions. Indeed, since enforcement of the law commenced in June 2022, more than 6,300 shipments valued at approximately $2 billion have been reviewed by CBP for UFLPA applicability, with approximately 30% of such shipments ultimately excluded for entry altogether.
In this Episode, Alex Cotoia and Michael Volkov discuss practical approaches to compliance with the Uyghur Forced Labor Prevention Act.
The post Episode 309 — Alex Cotoia on Compliance with Uyghur Forced Labor Prevention Act appeared first on Corruption, Crime & Compliance.
Gabrielle Griffith, Director BPE Global, is an expert in trade compliance issues. Gabrielle assists clients in implementing effective trade compliance programs by addressing improvements within organizations’ people, processes, and systems. In the area of U.S. export controls, she advises clients on compliance with the International Traffic in Arms Regulations, the U.S. Export Administration Regulations, and the various embargo and sanctions programs administered by the Office of Foreign Asset Controls. On import compliance matters, she advises on classification, country of origin, special duty programs such as USMCA, focused assessments, C-TPAT, antidumping/countervailing duty as well as Section 232 and 301 matters.
Gabrielle joins Michael to discuss current trade compliance trends and expectations for 2024.
The post Episode 308 — Gabrielle Griffith, Director BPE Global, on Trade Compliance Trends and Expectations appeared first on Corruption, Crime & Compliance.
In another significant step notifying global businesses of the new realities – companies are about to face aggressive coordinated prosecutions for sanctions and export control violations. The last piece in launching this new effort was the announcement of a joint voluntary disclosure program to ensure alignment among the agencies for civil and criminal enforcement of such violations. The Joint Compliance Note (“JCN”) urges companies to...
The post Episode 289: Justice, Commerce and Treasury Issue Joint Notice on Voluntary Disclosure appeared first on Corruption, Crime & Compliance.
In late July 2023, the Securities and Exchange Commission (“SEC”) adopted new rules requiring public companies to disclose cybersecurity incidents and cybersecurity governance policies and practice. The SEC largely adopted its original proposal issued in March 2022, with some modifications applicable to cybersecurity disclosure requirements. The SEC voted to adopt the new rules in a 3-2 vote. The new disclosure requirements however are effective no...
The post Episode 288 — SEC Adopts Robust New Cybersecurity Disclosure Rules appeared first on Corruption, Crime & Compliance.
Corporate boards face a panoply of risks – and the nature of these risks are quickly evolving. Cybersecurity has quickly risen to the top of the list of corporate risks. Add to that the new SEC regulations on cybersecurity disclosures, and board members face serious and escalating risks surrounding ransomware attacks, data breaches and other technical issues.
The challenge – board members are not cyber experts, nor do they really like to focus on technical issues. Not to be too simplistic or harsh but board members usually ask CISOs – “Are we okay?” and then want to move on.
Just to make everything even more complicated, now let’s ladle on a new, and quickly growing risk for board – artificial intelligence. By this time at the board meeting, eyes will be glazed over.
Directors have significant oversight obligations to cover artificial intelligence.
The post Episode 287 — Board Oversight and Monitoring of AI Risks appeared first on Corruption, Crime & Compliance.
Matt Stankiewicz, Partner at The Volkov Law Group, rejoins the podcast to review the recent Ripple decision by District Judge Torres at the Southern District of New York and the recent indictment of Celsius Networks’ CEO. On July 13, 2022, Judge Analisa Torres issued her long awaited ruling on the summary judgment motions in the SEC’s case against Ripple Labs, Inc. (“Ripple”). The 34-page order provided a...
The post Episode 286 — Matt Stankiewicz on Ripple Decision and Indictment of Celsius Network CEO appeared first on Corruption, Crime & Compliance.
The Department of Justice has laid down a marker – companies would be smart to understand the significant change in ethics and compliance program expectation. Companies that ignore this new landscape are gambling with their financial security and their reputational value. Every company that has suffered through a DOJ investigation knows how damaging and draining such an experience can be. The purpose of an ethics...
The post Episode 285 — The Importance of a Consequence Management System appeared first on Corruption, Crime & Compliance.
The Justice Department’s recent revisions to its Corporate Enforcement Program and its Evaluation of Corporate Compliance Programs stressed the importance of compensations systems and consequence management. The theoretical underpinning of DOJ’s expanded focus is to increase the consequences to individuals who engage in misconduct or supervisors who turn a blind eye to misconduct. Individuals already face potential criminal prosecution for engaging in misconduct but the...
The post Episode 284 — How to Implement a Compliance Compensation System appeared first on Corruption, Crime & Compliance.
Bank of America joined the club of consumer abusers – Wells Fargo had been the well-established leader of this club and the poster-child for abusive consumer practices. For years, Bank of America avoided federal enforcement for abuses and could distinguish itself from the poster-child, Wells Fargo. Bank of America’s conduct is inexplicable. In response to the Wells Fargo scandal, you would have expected that Bank...
The post Episode 283 — Bank of America Hit with $250 Million Penalty for Consumer Account Abuse appeared first on Corruption, Crime & Compliance.
If you ask corporate board members and senior executives to list their number one risk (other than financial operations), the answer in today’s risk environment is clear – cybersecurity and data privacy. The rapid elevation of this risk is reflected in weekly headlines announcing ransomware, cyber-attacks and data breaches. Companies that have experienced a cyber-attack are forever changed. The board and senior executive team quickly...
The post Episode 282 — The Evolving Partnership: Compliance and Cybersecurity appeared first on Corruption, Crime & Compliance.
NAVEX’s annual report on the state of risk and compliance is a must read. Each year NAVEX supplies helpful insights that compliance professionals, corporate managers and board members can use to benchmark their respective risk management and compliance strategies. This year’s survey reflects submissions from over 1300 respondents around the globe. In this Episode, Michael Volkov reviews NAVEX’s 2023 State of Risk and Compliance Report.
The post Episode 281 — NAVEX’s 2023 State of Risk and Compliance Report appeared first on Corruption, Crime & Compliance.
Looking back in time, the compliance field owes a lot to the healthcare industry. In the 1990s, there was a dramatic explosion in the industry in response to aggressive federal enforcement programs and increasing regulation. All of a sudden, compliance officers who sat in the backrooms of legal departments were “volunteered” to address proactive compliance. Federal regulators pushed the compliance function to assume a much...
The post Episode 280 — Healthcare Compliance and Fraud appeared first on Corruption, Crime & Compliance.
The Securities and Exchange Commission filed two separate enforcement actions targeting the cryptocurrency industry — the first against Binance and its CEO, and the second against Coinbase. The SEC’s actions underscored its aggressive strategy to reign in cryptocurrency companies. In this Episode, Matt Stankiewicz and Mike Volkov discuss these two important enforcement actions.
The post Episode 279 — Matt Stankiewicz and Mike Volkov Review SEC Enforcement Actions Against Binance and Coinbase appeared first on Corruption, Crime & Compliance.
Last year, the Department of Justice warned global companies of a new, aggressive strategy for enforcement of trade sanctions and export controls. Deputy Attorney General Lisa Monaco stated that sanctions and export enforcement constituted “The New FCPA.” DOJ, the Treasury Department’s Office of Foreign Asset Control (“OFAC”) and the Department of Commerce’s Bureau of Industry and Security (“BIS”) have joined forces to aggressively enforce sanctions...
The post Episode 278 — “The New FCPA”: Sanctions and Export Control Enforcement and Compliance appeared first on Corruption, Crime & Compliance.
Over an eight-year period ending in 2018, Murad, a U.S. cosmetics company, illegally exported goods and services to Iran in 62 separate transactions worth approximately $11 million. Murad was acquired by Unilever United States (“Unilever”) in 2015. Once discovered, Unilever voluntarily disclosed the conduct to OFAC. The fallout from Murad’s long-running conspiracy: Unilever paid $3.3 million to OFAC for its Iran Sanctions violations. Interestingly, OFAC...
The post Episode 277 — The Murad OFAC Settlement and Sanctions Compliance Lessons appeared first on Corruption, Crime & Compliance.
The SEC recently announced two separate FCPA SEC enforcement actions — the first against Franks International for $8 million for FCPA violations in Angola; and the second against Philips, a Dutch medical device company, for $62 million for FCPA violations in China.
The SEC settlement actions underscored important bribery risks in Angola and China.
Philips’ recent settlement is its second in the last ten years. In 2013, Philips resolved FCPA charges with the SEC arising from bribery violations in Poland. In that case, Philips paid more than $4.5 million to settle charges that Philips bribed Polish health care officials.
Philips’ subsidiaries in China (collectively referred to as “Philips China”) engaged in several distinct bribery schemes to advance Philips business. Philips was committed to increasing its diagnostic imaging business and aggressively competed in public tenders against rival suppliers of the same equipment. In some cases, at the request of distributors, Philips China gave distributors pricing discounts on the health technology equipment that it sold to distributors. However, Philips failed to maintain and adhere to its internal approval processes and recording of pricing discounts to ensure that management properly authorized the discounts. These pricing discounts created a significant risk that “excessive distributor margins could be used to fund improper payments to employees” of state-owned hospitals.
In the Frank’s case, from January 2008 through October 2014, Frank’s paid commissions to a sales agent in Angola when Frank’s employees in the Angola area knew that there was a high probability that the agent would use the commissions to bribe Angolan government officials on behalf of Frank’s. A substantial portion of the funds were diverted to an Angolan government official to influence the award of oil and natural gas services contracts. The SEC further noted that, during this time period, Frank’s lacked adequate internal accounting controls related to retention and payment of agents that interacted with Angolan foreign government officials on behalf of Frank’s.
The post Episode 276 — Review of Philips and Franks Int’l SEC FCPA Enforcement Actions appeared first on Corruption, Crime & Compliance.
Even with the current focus on sanctions compliance, many companies have done little to assess and enhance their existing sanctions compliance program. Instead, companies have stitched together a basic sanctions compliance program that centers on a screening tool and little beyond that. Such a limited program provides just a false comfort of compliance. Many companies are not even conducting the mandated basic requirement of annual training of relevant employees.
If companies do not re-examine this issue and craft an enhanced strategy, they may face significant risk of government enforcement. OFAC and the Bureau of Industry and Security (“BIS”) have been increasing attempts to gather information, follow up on leads, and conduct informal inquiries in an attempt to verify compliance with sanctions requirements.
OFAC and BIS work closely with the Justice Department’s National Security Division, which is responsible for criminal sanctions and export controls enforcement. In light of this relationship, it does not – and will not – take much for OFAC or BIS to provide DOJ with sufficient information to launch a criminal probe and issue grand jury subpoenas (or even execute a search warrant if appropriate). From our perspective, there are five practical areas that should be addressed in the near future to build out a sanctions compliance program. After these near term items are accomplished, further refinements can be addressed.
In this Episode, Mike Volkov reviews 5 steps to enhance a Sanctions Compliance Program.
The post Episode 275 — Five Steps to Enhance Your Sanctions Compliance Program appeared first on Corruption, Crime & Compliance.
The cryptocurrency industry has a target on its back – and perhaps justifiably so. The SEC, CFTC and OFAC have been bringing a number of regulatory enforcement actions, including against Bittrex, Inc. ($24,280,829.20 in settlements with OFAC and FinCEN) and Payward, Inc. d/b/a Kraken ($362,158 settlement with OFAC). Yet, the cryptocurrency has lots to worry about when it comes to compliance – fraud, cybersecurity, and a strong line up of regulators looking to exert increased control over the industry. Crypto exchange companies better take heed or they could find themselves in the enforcement cross-hairs.
The latest to fall – Poloniex LLC, a Delaware company that operated an online trading and settlement platform, i.e. a crypto exchange, agreed to pay OFAC $7.591 million for 65,942 violations of multiple sanctions programs. Between January 2014 and November 2019, Poloniex’s trading platform permitted customers from sanctioned jurisdictions to conduct crypto transactions (i.e. trades, deposits, withdrawals) worth a combined total of $15.335 million. Poloniex had KYC information and internet protocol address data indicating that customers were located in prohibited jurisdictions for conducting business. Poloniex did not voluntarily disclose the conduct. OFAC determined that the violations were non-egregious.
In this Episode, Mike and Matt review the crypto OFAC cases and point out important trends and compliance steps.
The post Episode 274 — Cryptocurrency and Sanctions Risks Featuring Matt Stankiewicz appeared first on Corruption, Crime & Compliance.
The Justice Department warned companies that sanctions enforcement is the “new FCPA.” Recently, DOJ delivered its first salvo to back up its message.
As part of a broad effort to prosecute funding of North Korea’s nuclear program, DOJ and the Office of Foreign Assets Control (“OFAC”) announced a joint settlement with British American Tobacco and its Asian marketing subsidiary (“BAT”), under which BAT agreed to pay combined penalties of $629 million, stemming from its scheme to conduct business in North Korea through a third-party in Singapore.
In another action, DOJ unsealed criminal charges against a North Korean banker and Chinese facilitators, both from the Liaoning Province, for their roles in the illicit sale of tobacco products in North Korea.
BAT’s Singapore subsidiary plead guilty to a one-count Information charging BAT and its subsidiary with conspiracy to commit bank fraud and to violate sanctions. BAT entered into a deferred prosecution agreement (“DPA”).
OFAC announced a separate civil settlement with BAT under which BAT will pay a civil penalty of $508 million, the largest fine against a non-financial institution in OFAC’s history. OFAC cited the fact that BAT and its subsidiary “willfully conspired” to transfer hundreds of millions of dollars through U.S. banks and were “aware” that the transfers were blocked by U.S. sanctions. BAT did not voluntarily disclose the conduct and OFAC characterized BAT’s violations as “egregious.”
The post Episode 273 — British American Tobacco’s $629 Settlement for Evasion of North Korean Sanctions appeared first on Corruption, Crime & Compliance.
Everyone has jumped on the corporate culture bandwagon. For some new converts, they like to espouse corporate culture as a recent discovery, or a new-fangled approach for compliance programs.
The story of corporate culture as a talismanic tool for ethics and compliance is really nothing new. Chief compliance officers knew the importance of corporate culture from the beginning. A number of companies separately called out ethics, either as a part of the chief compliance officers’ responsibilities or by creating a stand-alone chief ethics officer position.
The question is still unclear if business organizations are ready to make the commitment and invest in their culture. Most companies, however, lack true leadership and commitment to a corporate culture of compliance. In this regard, few companies (if any) have invested sufficiently to match the requirements, stakeholder demand, and tangible benefits from attending to corporate culture.
In this Episode, Michael Volkov reviews the practical steps needed to make a culture of ethics and compliance a reality. First, a company has to define its culture. Second, a company has to embed its culture through messaging, actions and accountability. And finally, a company has to monitor, intervene, remediate and maintain its culture.
The post Episode 272 — Making Corporate Culture a Reality appeared first on Corruption, Crime & Compliance.
Microsoft agreed to pay $2,980,265.86 for illegal exports of services and software to sanctioned jurisdictions and Specially Designated Nationals (“SDNs”) in violation of OFAC’s Cuba, Iran, Syria, and Ukraine-/Russia-Related sanctions programs.
Most of the violations involved prohibited Russian entities or persons located in the Crimea region of Ukraine. Microsoft failed to identify and prevent the use of its products by prohibited parties. Microsoft voluntarily disclosed the conduct. OFAC also cited Microsoft’s “significant remedial measures.”
In this Episode, Michael Volkov reviews the Microsoft OFAC settlement and highlights the important remedial steps taken by Microsoft to enhance its Sanctions Compliance Program.
The post Episode 271 — A Deep Dive into the Microsoft OFAC Settlement appeared first on Corruption, Crime & Compliance.
The Justice Department’s recent emphasis on ethics and compliance culture, along with greater specificity on “consequence management” is a welcome breath of fresh air. It is a policy coming for a long time and will bring about significant improvements. Do not get me wrong – there will be bumps and bruises along the way, hurt egos and turf battles, but in the end HR and compliance have to get along – if they do not, senior management will have to intervene.
In this Episode, Michael Volkov discusses DOJ’s new compliance requirements and the implications for HR and compliance cooperation.
The post Episode 270 — DOJ Mandates Greater Cooperation Between CCOs and HR appeared first on Corruption, Crime & Compliance.
Wells Fargo added to its Grand Slam of Enforcement with its recent settlement of OFAC violations and paid $30 million to settle the matter.
Wells Fargo’s violations occurred during a seven-year period, 2008 to 2015, and stemmed from its acquisition of Wachovia Bank. Wells Fargo provided a foreign bank (part of predecessor Wachovia) with trade-finance software that Wachovia used to process trade financing transactions with U.S.-sanctioned entities and individuals. Wachovia customized the software and then used it to conduct transactions that it knew or should have known would involve sanctioned entities and individuals.
In this Episode, Michael Volkov reviews the Wells Fargo OFAC settlement.
The post Episode 269 — Deep Dive into the Wells Fargo OFAC Sanctions Settlement appeared first on Corruption, Crime & Compliance.
The Justice Department is continuing its push to encourage to encourage companies to voluntarily disclose FCPA misconduct. In its latest declination, DOJ settled with Corsa Coal for its bribery scheme in Egypt. Under the declination, Corsa Coal paid $1.2 million in disgorgement and earned a significant reduction from DOJ because of its inability to pay.
The SEC recently settled two separate enforcement actions, one against Flutter Entertainment for its operation of PokerStars and another against Rio Tinto.
In this Episode, Michael Volkov reviews the latest FCPA news and provides analysis of the actions.
The post Episode 268: FCPA Catch Up: Corsa Coal Declination and Flutter and Rio Tinto SEC Settlements appeared first on Corruption, Crime & Compliance.
The Justice Department is rapidly pushing corporations to a new level of compliance. We are witnessing a watershed moment – DOJ is raising the bar on expectations surrounding corporate compliance programs. It would be a mistake, however, to interpret DOJ’s recent changes as limited to compliance compensation and preservation of internal communications data.
When considered together, the changes to the Corporate Enforcement Policy, the Evaluation of Corporate Compliance Programs, and the issuance of the Three-Year Pilot Program on Compensation Incentives and Clawbacks, reflect a broad set of expectations governing corporate compliance programs.
In this Episode, Michael Volkov reviews recent updates to DOJ’s compliance program requirements.
The post Episode 267 — DOJ Escalates Compliance Program Requirements appeared first on Corruption, Crime & Compliance.
As we have noted on numerous occasions, the U.S. Russia Sanctions and Export Control Program is unprecedented and a compliance challenge for all organizations. In another unprecedented action, the Justice Department and the Departments of Commerce and Treasury issued a Joint Compliance Note (“JCN”) on the importance of compliance with the Russia Sanctions and Export Control requirement, which provides important descriptions of red flags and tactics used by organizations and individuals to evade applicable sanctions and export controls. In doing, DOJ, the Office of Foreign Asset Control (“OFAC”) and the Bureau of Industry and Security (“BIS”) have provided important guidance on government expectations and alerts to common scenarios that pose high-risk activities.
All compliance and trade compliance professionals should review the JCN since it sets out important and instructive information needed to ensure compliance. The key focal point, according to the JCN, is the use of third-party intermediaries and transshipment points that can be used to evade Russian and Belarusian sanctions and export controls. This is the first collective compliance guidance issued by the Justice Department and the Departments of Treasury and Commerce.
In this Episode, Michael Volkov discusses the Joint Compliance Notice.
The post Episode 266 — Joint Compliance Notice Issued on Sanctions and Export Controls Evasion appeared first on Corruption, Crime & Compliance.
Ericsson, a multinational telecommunications company, based in Sweden, settled its breach of the 209 Deferred Prosecution Agreement, agreed to enter a guilty plea and pay a $206 million penalty. In 2019, Ericsson entered into a three-year DPA, paid a $1 billion penalty to DOJ and the SEC for FCPA violations.
DOJ notified Ericsson in 2021 that it had breached the DPA by violating the DPA’s cooperation and disclosure provisions, stemming primarily from allegations that Ericsson had failed to disclose its bribery payments to ISIS to facilitate transportation of telecommunications equipment in Iraq.
As a consequence, Ericsson will now enter a guilty plea to the two-count Information filed as part of the original DPA, which charges Ericsson with conspiracy to commit violate the anti-bribery provisions of the FCPA, and a separate conspiracy to violate the books and records and internal controls provisions of the FCPA.
In this Episode, Michael Volkov reviews the Ericsson FCPA DPA Breach Settlement.
The post Episode 265 — The Ericsson FCPA DPA Breach Settlement appeared first on Corruption, Crime & Compliance.
The SEC knows that it has powerful enforcement tools. The FCPA provides two important requirements on issuers – keep accurate books and records and maintain internal controls to ensure that management’s accounting controls operate effectively to ensure proper use of corporate assets. The SEC knows these are broad requirements and has defined practical requirements.
One critical area of focus has been the SEC’s focus on contract-invoice-payment process. For compliance professionals, this should be an area of high priority. Chief compliance officers have to work closely with procurement, payables, sales and other functions that touch these important procedures. CCOs have to work together to pull apart the process, understand the steps involved, and then build controls surrounding these activities.
In this Episode, Michael Volkov reviews the importance of contract/purchase order to invoice to payment procedures.
The post Episode 264 — Contract/Purchase Order to Invoice to Payment Controls appeared first on Corruption, Crime & Compliance.
LRN continues to provide important insights and trends on the importance of ethics and compliance programs. LRN’s annual report is an important resource and needs to be reviewed by the board, senior management and all compliance-related functions.
LRN’s 2023 report emphasizes the importance of commitment, investment and promotion of corporate ethics and compliance, particularly during these difficult economic and geopolitical disturbances.
LRN’s report is based on survey responses from more than 1,850 ethics and compliance professionals at companies from 10 different countries in 26 industries.
According to the report 85 percent of respondents reported that their ethical cultures were stronger s a result of facing and overcoming challenges during the last year. Interestingly, almost the same percentage reported that their respective companies operated based on values as opposed to a rules-based compliance program.
Notwithstanding the positive accomplishments, the LRN report highlighted the difficulties ethics and compliance program officers face as a result of: (1) inadequate internal systems (76 percent); (2) staff shortages (73 percent); (3) budget constraints (73 percent) and employee disengagement (68 percent).
The LRN reported highlighted deficiencies in responding to the Ukraine invasion and increased export and sanctions regulations – only 25 percent of respondents have enhanced their trade control compliance and training and just under 50 percent has enhanced their risk controls in this area.
In this Episode, Susan Divers, Head of Thought Leadership at LRN, and Michael Volkov discuss LRN’s Report and the implications for ethics and compliance programs.
LRN’s Report is available HERE.
The post Episode 263: LRN’s 2023 Ethics and Compliance Program Effectiveness Report Featuring Susan Divers appeared first on Corruption, Crime & Compliance.
The Justice Department did not just willy-nilly announce its embrace of clawbacks and deferred payment compensation punishment as a remediation tool for companies that suffer an enforcement action and settlement. To the contrary, DOJ has been examining this issue, even citing it in important policy spheres and enforcement actions, as an important tool in its arsenal.
Both the DOJ and the SEC have been weighing these issues under the rubric of remediation. In particular, DOJ and the SEC have evaluated disciplinary actions for those directly involved in misconduct and even those who may not have been directly involved but were indirectly responsible for oversight and monitoring of the various actors.
What is new – and exciting – is the extent to which DOJ is now open to examine the efficacy of these measures as an important alternative to massive criminal fines against companies that ultimately punish shareholders without holding accountable the bad actors beyond termination of employment.
In this Episode, Michael Volkov reviews recent expectations and tools designed to promote complaince incentives and disincentives.
The post Episode 262: DOJ’s Compliance Frontier:Incentives and Disincentives appeared first on Corruption, Crime & Compliance.
I always enjoy pulling out the crystal ball and looking forward with due consideration of last year’s trends. It is a perspective that gives us all the opportunity to identify important trends and to set an agenda for the next year – 2023.
The compliance profession continues to grow in overall importance in the corporate governance landscape. Corporate leaders that fail to appreciate this face do so at serious risk to their respective organizations and their own livelihood. Boards and CEOs that ignore the importance of ethics and compliance are doomed – maybe not today but certainly in the near term. No one is that lucky and compliance karma has a way of catching up with those organizations that believe they can dodge risks and reputational damage with little attention to ethics and compliance. I have seen too many organizations operating in a red flag landscape suffer real and significant harm.
In this Episode, Michael Volkov reviews ethics and compliance trends for 2023.
The post Episode 261 — 2023 Ethics Compliance Predictions and Trends appeared first on Corruption, Crime & Compliance.
As we start the New Year, every compliance professional (and senior executive) should take a moment to acknowledge the amazing efforts made in 2022 by trade compliance professionals to ensure overall compliance with a maze of complex economic sanctions and export controls implemented in response to Russia’s unprovoked invasion of Ukraine.
Starting in February 2022, and almost on a daily basis, the U.S. government, along with its allies and partners, issued new and complex economic sanctions and export controls. Depending on a company’s risk profile, trade compliance officers scrambled each day to maintain compliance, inform relevant business leaders and senior executives of changing risks and requirements for global export and important operations.
Alex Cotoia, Regulatory Manager at The Volkov Law Group, and Michael Volkov discuss the important role played by trade compliance professionals during the past year.
The post Episode 260 — The Person of the Year: The Trade Compliance Officer Featuring Alex Cotoia from The Volkov Law Group appeared first on Corruption, Crime & Compliance.
Honeywell UOP (“Honeywell”) is a U.S.-based subsidiary of Honeywell International, Inc. The settlement resolved bribery charges in the United States and Brazil stemming from bribes paid to high-ranking officials at Petrobras, Brazil’s state-owned oil company.
Honeywell agreed to a three-year deferred purchase agreement (“DPA”), which was filed in the Southern District of Texas (Houston). Honeywell agreed to pay approximately $79 million in exchange for the DPA. Concurrently, Honeywell settled with the SEC and agreed to pay $81 million in disgorgement and prejudgment interest. Also, Honeywell resolved charges with Brazilian authorities and agreed to pay approximately $39 million. This payment was credited against Honeywell’s obligation to pay $79 million to the DOJ.
The post Episode 259 — Deep Dive into the Honeywell FCPA Case appeared first on Corruption, Crime & Compliance.
The Justice Department’s new Corporate Enforcement Policy and the heightened enforcement and compliance expectations were put to the test in its announcement of a $315 million settlement of bribery charges with ABB, a three-time loser in foreign bribery enforcement. However you interpret this case, the ABB enforcement action demonstrates yet again the vitality of DOJ’s commitment to FCPA enforcement, and that the industry can expect additional enforcement actions, perhaps another before years end that may fall within the “blockbuster” category.
Two ABB subsidiaries, one in South Africa and the other in Switzerland, each separately agreed to enter a guilty plea to FCPA conspiracy for violation of the bribery provisions. ABB’s parent agreed to enter into a three-year deferred prosecution agreement (“DPA”) for the same conduct.
ABB’s settlement resolved SEC charges for $75 million (although the SEC had not yet released its settlement with ABB) and several foreign country prosecutions, including South Africa and Switzerland, and an expected resolution with German authorities. DOJ agreed to credit up to half of the $315 million for ABB’s payment of penalties to South African authorities. The South African authorities simultaneously announced a settlement with ABB under which ABB would pay $142 million to the South African government.
The post Episode 258 — Deep Dive in the ABB FCPA Case appeared first on Corruption, Crime & Compliance.
The Justice Department and the Securities and Exchange Commission bounced back in 2022 to restore their records for aggressive FCPA enforcement. At the same time, DOJ announced significant new compliance program expectations, and appeared ready to press forward with a number of FCPA resolutions.
Tom Fox, the Compliance Evangelist and Leader of the Compliance Podcast Network, joins Michael Volkov for a comprehensive review of 2022 FCPA Enforcement and Compliance Trends.
The post Episode 257: 2022 FCPA Year in Review Featuring Tom Fox appeared first on Corruption, Crime & Compliance.
The FTX scandal has sent (and is continuing to send) shockwaves through the cryptocurrency industry. FTX was one of the largest crypto exchanges in the world, and its CEO, Sam Bankman-Fried (SBF) was the darling of Silicon Valley and Wall Street.
SBF touted FTX for its rapid growth as a crypto exchange and its deep connections to politicians, athletes and movie stars. It turned out to all be a fraud. SBF is now regarded as the “Bernie Madoff” of the crypto industry as he and his cohorts pilfered FTX money for lavish and personal enjoyment.
Matt Stankiewicz, a Partner at The Volkov Law Group, joins Mike Volkov for a discussion on the scandal, its implications for the crypto industry and the utter compliance failure.
The post Episode 256 – The FTX Scandal and Cryptocurrency Risks: Featuring Matt Stankiewicz from The Volkov Law Group appeared first on Corruption, Crime & Compliance.
In 2020, Asante Berko settled his FCPA case with the SEC by agreeing to pay $329,000. In November of 2022, Berko arrived in London at Heathrow Airport and he was arrested. Berko had no idea that he had been indicted back in 2020 and the indictment remained under seal until he arrived, two years later, at Heathrow Airport.
Berko was charged with conspiring with two Ghanaian officials and four other individuals to pay bribes in violation of the FCPA to benefit Goldman Sachs, himself, and a Turkish energy company. The scheme began to unravel when Goldman Sachs discovered the illegal payments.
Join Michael Volkov as he examines the strange case of Asante Berko.
- Berko orchestrated the bribery scheme between 2014 and 2017 to secure an electrical power contract from the Ghanaian government for the Turkish energy company. They were attempting to secure a power purchase agreement (PPA) or an emergency power agreement (EPA) with Ghana, which required the approval of certain Ghanian officials and entities, including a senior Ghanaian official as well as the Executive Cabinet and Parliament.
- In seeking reimbursement for the bribes paid out by Berko and his conspirators, he falsified invoices for consulting services allegedly provided by a Ghanian consulting company, which were then paid by the Turkish energy company. The payments were routed through correspondent banks in the US.
- Goldman Sachs officials began questioning the Turkish energy company about the payments to the Ghana consulting Company that appeared in their financial analysis. Despite the reassurance of Co-conspirator Number 3, Goldman Sachs conducted a due diligence review of the transaction and various email accounts and communications, including personal accounts used by Berko and others for incriminating conversations.
Resources
Goldman Sachs Official Indicted Over Ghana Bribery Scheme
Email Michael: mvolkov@volkovlaw.com
The post Episode 255 — The Curious FCPA Case of Asante Berko appeared first on Corruption, Crime & Compliance.
This week’s show discusses recent developments in the sphere of export controls and sanctions. Alexander Cotoia, Regulatory Compliance Manager at the Volkov Law Group, joins Michael Volkov to explore the the Department of Commerce’s Bureau of Industry and Security (“BIS”) ramping up of export control enforcement, including the new restrictions on China and Russia.
In early October, the BIS announced two rules imposing significant export controls on semiconductor chips transactions for supercomputer end uses. Its aim is to obstruct China’s ability to use these supercomputers to upgrade their military capabilities and the propagation of WMDs. Within these new rules, controls on the export of semiconductor manufacturing technology in certain transactions for integrated circuitry were also imposed.
Many professionals have become accustomed to the free-trade arrangement with China to export sophisticated technologies for integration end uses, and fear that the more stringent controls will compromise that arrangement.
Relevant Links:
Bureau of Industry Security Ramping Up Export Control Enforcement
Alexander Cotoia on LinkedIn
Email Alex: acotoia@volkovlaw.com
Email Michael: mvolkov@volkovlaw.com
Volkov Law Group
The post Episode 254 — Update on Export Controls and Sanctions: Interview with Alex Cotoia appeared first on Corruption, Crime & Compliance.
Oracle Corporation settled its second FCPA case in ten years. It agreed to pay the SEC $23 million to resolve allegations that its subsidiaries in Turkey, India and the United Arab Emirates maintained slush funds to bribe foreign officials. Ten years ago in 2012, Oracle paid the SEC $2 million for creating millions of dollars in off-the-books accounts at its India subsidiary. Join Michael Volkov as he takes a deep dive in the Oracle case and provides valuable lessons for managing third-party corruption risks.
- In the SEC’s mind, Oracle is a recidivist, having its second enforcement action case in 10 years.
- The settlement for $23 million underscored the power of the FCPA provisions, which mandate effective internal controls and accurate books and records, and can be applied to a wide range of conduct beyond foreign bribery, Michael remarks.
- The controls that Oracle put in place to prevent improper use of discounts and marketing reimbursements were not effective because there was a lack of compliance culture within the business.
- The Oracle case is one that should be studied by compliance professionals, Michael believes. It reminds you to look at your own controls that surround discounting and ensure that the necessary documentation is carried out. “No matter what controls you have in place, they still have to be adhered to with a true culture of compliance underneath it as a foundation,” he adds.
The post Episode 253 — A Deep Dive into the Oracle SEC FCPA Settlement appeared first on Corruption, Crime & Compliance.
The Episode is available HERE. Matt Stankiewicz, a Partner at Volkov Law, is a leading industry expert on cryptocurrency. Bittrex, a leading cryptocurrency exchange, suffered twin enforcement actions for AML and Sanctions Compliance deficiencies. Matt takes a deep dive on the enforcement actions and outlines practical compliance steps that every cryptocurrency exchange should implement. The Episode is available HERE. Corruption Crime and Compliance is available...
The post Episode 252 — Matt Stankiewicz on the Bittrex OFAC and FinCEN Enforcement Action: Cryptocurrency and AML and Sanctions Compliance appeared first on Corruption, Crime & Compliance.
Episode 251 is available here. Maria D’Avanzo is the Chief Evangelist Officer at Traliant. Maria provides key insights on corporate ethics and compliance training programs. Maria describes how to take your training program to the next level and tailor the content to deliver training on important issues based on your company’s risk assessment. In this Episode, Mike and Maria discuss compliance training, culture and new...
The post Episode 251 — Training and Corporate Culture: Interview of Maria D’Avanzo, Chief Evangelist Officer, Traliant appeared first on Corruption, Crime & Compliance.
The newest episode of the re-branded Corruption Crime & Compliance has dropped!! The Episode can be accessed here. Financial institutions are rapidly moving their operations to the cloud. In response to this development, and the increasing risks of cyber breaches, legislators and regulators are gearing up to impose significant cybersecurity requirements. Carlo Massimo is a journalist who covers Cyber Security and International Tech Policy. Carlo...
The post New Podcast Episode 250 — Cybersecurity Risks for Financial Institutions Relying on the Cloud — An Interview of Carlo Massimo appeared first on Corruption, Crime & Compliance.
Change is the law of life, and those who look only to the past and present are certain to miss the future -John F. Kennedy The measure of intelligence is the ability to change -Albert Einstein We are pleased to announce the release of a new, rebranded and refreshed podcast — Corruption, Crime & Compliance. Under the old banner, we produced 249 episodes. Listen for...
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The Biden Administration promised a new, aggressive approach to corporate crime. Well, the Justice Department just delivered a new, comprehensive policy that raises a number of issues, some of which are likely to be controversial. The new policy incorporates reforms announced last October that largely centered on prior corporate criminal and civil records; appointment of independent compliance monitors and expanding review of responsible persons in an internal...
The post Episode 249 — DOJ Issues New Corporate Enforcement Policy appeared first on Corruption, Crime & Compliance.
The Department of Justice and the Securities and Exchange Commission reached a $41 million settlement with GOL Linhas Aéreas Inteligentes S.A. (“GOL”) to resolve criminal and civil foreign bribery charges. GOL entered into a three-year deferred prosecution agreement (“DPA”) with DOJ in exchange for payment of a $17 million criminal penalty. DOJ credited $1.7 million of that penalty against a $3.4 million fine that GOL agreed...
The post Episode 248 — Deep Dive into the GOL Brazil FCPA Enforcement Action appeared first on Corruption, Crime & Compliance.
Corporate culture is all the rage now, meaning it is an often used topic to signal commitment, sensitivity to issues of employee concern, and an awareness of governance trends. In practice, as we all know, culture is not just about words — it is about action. As the often repeated phrase goes — talk is cheap. In this Corporate Culture Roundup Episode, Michael Volkov examines some culture-related...
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As the leading hotline provider in the global market, NAVEX is in the unique position of collecting and analyzing employee reporting trends. Each year, NAVEX issues an important report on current trends in employee reporting, whistleblowers, internal investigations and potential retaliation. NAVEX’s most recent report is interesting. NAVEX’s database consists of 1.37 million reports made in 2021 at organizations around the world. In this Episode, Michael Volkov...
The post Episode 246 — NAVEX’s Annual Global Hotline Benchmarking Report appeared first on Corruption, Crime & Compliance.
The Second Circuit Court of Appeals affirmed the district judge’s post-conviction dismissal of FCPA counts against Lawrence Hoskins, a former Alston executive, for his involvement in bribery scheme to secure a $118 million energy contract in Indonesia. The Hoskins FCPA case has had a long and tortious path through the court system, and the Second Circuit’s decision, which was decided by a 2 to 1...
The post Episode 245 — Second Circuit Affirms Trial Judge Dismissal of FCPA Verdicts Against Alstom Executive appeared first on Corruption, Crime & Compliance.
Chief compliance officers have access to a vast amount of data generated by their compliance programs. CCOs have to establish effective monitoring processes. A critical part of this process is to build a compliance program dashboard. This is a practical issue of real importance. In this Episode, Michael Volkov reviews this important issue.
The post Episode 244 — Building a Compliance Program Dashboard appeared first on Corruption, Crime & Compliance.
In a bipartisan success story, the House recently passed The Enablers Act, which is a far-reaching reform bill aimed at reducing AML and corrupt financial activity in the United States. Scott Greytak, Advocacy Director at Transparency International USA, and Erica Hanichak, Director of Government Affairs at the FACT Coalition, join Michael Volkov for a discussion of this legislative accomplishment and the implications for the battle...
The post Episode 243 — Scott Greytak, Transparency USA, and Erica Hanichak, the FACT Coalition, on House Passage of The Enablers Act appeared first on Corruption, Crime & Compliance.
LRN has released a new and informative report on Assessing Corporate Culture. LRN’s report provides invaluable guidance and practical steps for corporate boards to lead in the management, oversight and monitoring of corporate culture. A link to the report is below, along with an earlier LRN report on Benchmarking Ethical Culture. In this Episode, Michael Volkov interviews Ty Francis, Chief Advisory Officer at LRN, concerning...
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The Justice Department and various regulatory agencies continue to emphasize the importance of continuous improvement, testing and review as part of robust assessment procedures in an effective compliance program. The Treasury Department’s Office of Foreign Asset Control has specifically stated that a sanctions compliance program should include “a comprehensive, independent, and objective testing or audit function” so that a company can determine “how their program[]...
The post Episode 241 — Continuous Improvement, Testing and Auditing of Your Ethics and Compliance Program appeared first on Corruption, Crime & Compliance.
I have been — and continue to be– hyper-focused on the proper role and responsibilities for Chief Compliance Officers. Not that I see any cause for alarm, but it is easy to lose focus in the sea of so-called hot issues — ESG, Diversity, Climate Change, Threats to Democracy, Cybersecurity and Data Privacy, each of which is an important component and focus for organizations. All of these...
The post Episode 240 — The CCO’s Role in an Effective Compliance Program appeared first on Corruption, Crime & Compliance.
The Department of Justice continues to respond to the compliance community’s concerns about the new certification requirement adopted as part of the Glencore FCPA enforcement action. DOJ has adopted this new requirement to “empower” CCOs and to ensure that CCOs have a “seat at the [senior management] table.” While these are all laudable goals, CCOs continue to question whether DOJ’s new certification requirement will undermine their authority...
The post Episode 239 — DOJ’s New CCO Certification Requirement appeared first on Corruption, Crime & Compliance.
In following the Justice Department and the Securities Exchange Commission FCPA enforcement actions, I am always reminded of the popular phrase — “reading the tea leaves.” (or “tasseography,” a fortune-telling method based on tea leave patterns in tea sediments). Despite a slow initial year in 2021, the Biden Administration’s stamp and push on FCPA enforcement is becoming clear. Keep in mind, DOJ and SEC officials have...
The post Episode 238: 2022 FCPA Enforcement Trends . . . So Far appeared first on Corruption, Crime & Compliance.
The SEC announced another FCPA settlement in 2022. FCPA enforcement, in general, is picking up. Tenaris, a global supplier of steel pipes and related services for the energy industry agreed to pay the SEC $78 million to resolve FCPA violations that occurred in Brazil. The US Department of Justice closed its investigation without bringing charges. In this Episode, Michael Volkov reviews the SEC settlement.
The post Episode 237 — The Tenaris SEC FCPA Settlement appeared first on Corruption, Crime & Compliance.
In a long-anticipated and major enforcement action, the Justice Department and the Commodities and Futures Trading Commission resolved a sprawling investigation with Glencore International A.G. and Glencore Ltd, a Swiss-based commodity trading and mining company. Glencore entered guilty pleas for FCPA violations and a commodity price manipulation scheme. Glencore paid over $1.1 billion to resolve these two major investigations. The resolution in the U.S. was part of...
The post Episode 236 — The Glencore FCPA and Fraud Settlement appeared first on Corruption, Crime & Compliance.
The global economy has suffered two significant shocks — first, the pandemic sent shockwaves through every organization, and second, the war in Ukraine. Both of these events exposed the importance of risk management, especially with regard to supply chain and distribution operations. Hence, the renewed focus on third-party risk management and the repetitive description of “holistic” third-party risk management. Reality has a way of forcing change and...
The post Episode 235 — Third-Party Risk Management appeared first on Corruption, Crime & Compliance.
The Justice Department ended its FCPA enforcement drought by announcing its first corporate settlement in 2022. In a parallel action, the SEC announced its settlement with Stericycle for $28 million for FCPA violations. The SEC’s settlement was its second with a company for 2022 (the first was KT Corp.). Under the settlement, Stericycle resolved investigations being conducted by the Department of Justice, the Securities and...
The post Episode 234 — A Deep Dive into the Stericycle FCPA Enforcement Action appeared first on Corruption, Crime & Compliance.
Federal prosecutors know that their job – to represent the United States – is the highlight of their legal career. Speaking from experience, federal prosecutors are a privileged lot – they can announce in court they represent the United States. It is a heady experience and an absolute privilege. It is hard not to repeat the Spiderman quote, “With great power comes great responsibility” – but...
The post Episode 233 — Tom Fox and Mike Volkov Discuss DOJ Criminal Trial Wins, Losses and Stumbles appeared first on Corruption, Crime & Compliance.
OFAC recently announced a settlement with S&P Global for $78,750 for violations of the Ukraine-Russia Sanctions Program. The enforcement action provides important reminders relating to compliance with various “debt” maturity restrictions and how OFAC construes this restriction. In this Episode, Michael Volkov reviews OFAC’s enforcement action against S&P Global.
The post Episode 232 — OFAC Settles with S&P Global for $78,750 for Violations of Ukraine-Russia Sanctions appeared first on Corruption, Crime & Compliance.
The SEC is a very busy enforcement agency. While promising more aggressive enforcement of securities rules, the SEC has issued two set of comprehensive rule amendments. The first proposes new rules governing cyber incident reporting, disclosures and governance. In the second major policy action, the SEC issued its long-awaited rules governing climate change and greenhouse gas emissions. in this Episode, Michael Volkov reviews the two...
The post Episode 231 — SEC Update: Climate Change and Cyber Incident Reporting Rules appeared first on Corruption, Crime & Compliance.
The Antitrust Division’s Assistant Attorney General Jonathan Kanter promised a new era in antitrust enforcement. He won bi-partisan support from both Republicans and Democrats. Across the antitrust field, he promised aggressive merger enforcement, civil enforcement against digital markets, and constraint of market power in numerous industries. AAG Kanter promised a new approach and he is delivering. In this Episode, Michael Volkov reviews the Antitrust Division’s...
The post Episode 230 — Catching Up with DOJ’s Antitrust Division Enforcement Efforts appeared first on Corruption, Crime & Compliance.
In another indication of DOJ’s aggressive approach to enforcement of sanctions against Russia, DOJ announced the indictment of a TV producer for violations of the Crimea-Related Russian sanctions program. As outlined in the indictment, Jack Hanick, a former Fox News executive, was indicted for a sanctions violations stemming from his long-time relationship with a prohibited Russian oligarch (Specially Designated National) relating to the creation and...
The post Episode 229 — DOJ Charges TV Producer with Violating Crimea-Related Sanctions appeared first on Corruption, Crime & Compliance.
The continuing crisis in Ukraine has resulted in additional sanctions and export controls. It is hard to keep up with new developments each day. In recent steps, the United States has adopted a comprehensive set of export controls and implemented a ban on import of Russian oil, gas and coal. In this Episode, Michael Volkov reviews the recent changes to the Russia sanctions and export...
The post Episode 228 — Update on Russia Sanctions and Export Controls appeared first on Corruption, Crime & Compliance.
In an unprecedented and sweeping set of actions, the United States in coordination with its Allies and partners has implemented a robust set of sanctions and export controls against Russia designed to cripple Russia’s economy. The unprecedented actions against Russia are intended to deter Russia from continuing its violent invasion of Ukraine and attacks against the Ukrainian people. The Department of Treasury Office of Foreign...
The post Episode 227 — A Review of the Russia Sanctions and Export Controls appeared first on Corruption, Crime & Compliance.
The SEC announced the first FCPA enforcement action in 2022. South Korean telecommunications company, KT Corporation, agreed to pay $6.3 million to settle FCPA violations. As part of the settlement, KT Corp. agreed to pay $3.5 million in civil penalties and $2.8 million in disgorgement. KT Corp. is South Korea’s largest telecommunications company. KT Corp. violated the FCPA’s books and records and internal accounting controls provisions...
The post Episode 226 — A Deep Dive into KT Corp’s SEC Settlement for FCPA Violations appeared first on Corruption, Crime & Compliance.
Susan Divers, LRN Senior Advisor, reviews LRN’s 2022 Ethics and Compliance Program Effectiveness Report. LRN conducts an annual Ethics and Compliance Program Effectiveness Report (“LRN Report”) that is a must-read for business leaders, managers, investors, compliance professionals and other stakeholders. LRN’s annual report has addressed key issues surrounding the impact of the COVID-19 pandemic on companies and ethics and compliance programs.
The post Episode 225 — Interview of Susan Divers, LRN Senior Advisor, on LRN’s 2022 Ethics and Compliance Program Effectiveness Report appeared first on Corruption, Crime & Compliance.
Ethics and compliance professionals believe in their mission – if they did not, they would not be in the field. E&C professionals believe in the power of positive thinking, ethical conduct, and in the overall ability of an organization to operate as an “ethical” company. They work for their mission and it is a positive mission.
The New Year is a great time for E&C professionals to take stock on their compliance programs and to plot out a path forward. Luckily for most compliance professionals, there are lots of opportunities to advance their objectives. E&C is poised for another big jump on the corporate governance ladder, and this is a big year for E&C professionals to push their respective companies to support such efforts.
There are three significant trends that will continue to play out this year that create opportunities. These three trends, which I will discuss in greater detail are: (1) the continued emphasis on the importance of corporate culture; (2) the importance of ESG and in particular the “G” element; and (3) the current Administration’s aggressive enforcement and regulatory initiatives.
In this Episode, Michael Volkov reviews these important ethics and compliance trends.
The post Episode 224 — 2022 Ethics and Compliance Predictions appeared first on Corruption, Crime & Compliance.
Even with the absence of any major DOJ FCPA enforcement actions, DOJ issued an interesting FCPA Opinion Letter last week addressing application of the FCPA in circumstances where organizations face imminent serious bodily harm. While the situation may appear to be unique, it is a factual scenario that occurs more often than DOJ recognizes.
In October 2021, a Requestor submitted an Opinion Letter application that presented compelling circumstances. The Requestor, an owner of a vessel, explained that a Foreign Country’s Navy had seized its vessel. Arrested and detained the captain and detained the vessel and its crew. Given the captain’s mental and physical health, the captain’s incarceration created an immediate threat of serious physical harm. A third-party acting on behalf other Country’s Navy demanded a cash payment of $175,000 to release the captain, the crew and the vessel. DOJ acted quickly and approved the Opinion Letter request. The payment was made and the captain and crew were released.
The Requestor submitted additional information to DOJ, and a more formal Opinion Letter was released last week containing the full story and analysis. While the circumstances are relatively unique, DOJ’s analysis provides additional clarity surrounding the definition of “corrupt intent” and the “business purpose” test.
In this Episode, Michael Volkov reviews the recent Opinion Letter.
The post Episode 223 — DOJ Issues FCPA Opinion Letter Drawing Lines on “Corrupt Intent” and “Business Purpose” Test appeared first on Corruption, Crime & Compliance.
Economic sanctions enforcement is a fast-rising risk for global companies. For many years, the Treasury Department’s Office of Foreign Asset Control (“OFAC”) focused primarily on financial institutions. Over the last ten years, OFAC has stretched its enforcement eyes towards software, manufacturing, telecommunications and technology companies.
With this growth in sanctions enforcement, OFAC has embraced an aggressive view of third-party risks. Like the FCPA, under OFAC’s regime, third parties are not permitted to do what the primary company cannot do. As a result, we have witnessed a steady increase in OFAC enforcement actions against global companies for failing to ensure compliance by third-party agents, distributors and other intermediaries.
In this Episode, Michael Volkov takes a deep dive into third party sanctions risks and strategies to mitigate such risks.
The post Episode 222 — Managing Third-Party Sanctions Risks appeared first on Corruption, Crime & Compliance.
One of my favorite New Year’s reviews is under the title of “Person” of the Year. In the past, I have singled out Chief Compliance Officers, Chief Ethics Officers, Prosecutors, and Whistleblowers.
For 2021, the choice is obvious – the most important trend is the rise of Environmental, Social and Governance (“ESG”) programs. In second place, I would choose Supply Chain Management and Risks, given the importance of supply chain management in the post-pandemic world.
In the end, ESG dominated the headlines and earned the annual recognition as the issue of the year.
The post Episode 221 — The “Person” of the Year: Environmental Social and Governance Programs appeared first on Corruption, Crime & Compliance.
The Department of Justice secured a guilty plea from NatWest Markets, the newly-named Royal Bank of Scotland, for trade manipulation, referred to as “spoofing,” in U.S. Treasury markets. The NatWest resolution reflected new changes in DOJ’s white collar enforcement policies, including acknowledgement and consideration of NatWest’s prior misconduct (criminal and civil) and appointment of an independent compliance monitor. NatWest was not offered a deferred or non-prosecution agreement; instead it was required to plead guilty to a criminal charge of securities fraud and another charge of wire fraud.
Under the plea agreement, NatWest agreed that during the period of 2008 to 2014, traders in its Stamford and London offices spoofed the market for Treasury futures contracts. In addition, two traders at NatWest’s Singapore branch spoofed the secondary cash market for Treasury securities in 2018. The spoofing scheme violated a 2017 non-prosecution agreement between the United States and NatWest’s broker-dealer subsidiary, and occurred while NatWest was on probation for a separate conviction for manipulation of the foreign currency exchange market.
DOJ cited NatWest’s status as a repeat offenders as justification for requiring a criminal guilty plea to two counts. Under the plea agreement, NatWest Markets will pay $35 million in restitution, forfeiture and a criminal fine, serve three years’ probation and take on an independent compliance monitor.
In this Episode, Michael Volkov reviews the NatWest prosecution and settlement agreement.
The post Episode 220 — DOJ NatWest Markets Fraud Spoofing Enforcement Action appeared first on Corruption, Crime & Compliance.
In a major development, the Antitrust Division returned an indictment against six executives from aerospace engineering firms for an illegal conspiracy to restrict competition in the labor market for aerospace engineers.
After warning U.S. businesses, DOJ started bringing criminal cases against businesses that restrict competition for labor through illegal price-fixing or no-poach agreements. The Connecticut criminal case represents a major step in the Justice Department’s focus on illegal agreements in labor markets.
In this Episode, Michael Volkov reviews the criminal case and the specific allegations.
The post Episode 219 — Antitrust Division Indicts Six Aerospace Executives for Criminal Conspiracy in Labor Markets appeared first on Corruption, Crime & Compliance.
The Biden Administration announced a new, comprehensive anti-corruption initiative, the United States Strategy on Countering Corruption. The new anti-corruption initiative is the follow on to the earlier announcement elevating the global anti-corruption battle to a national security concern. After that announcement, the Biden Administration conducted a 200-day inter-agency examination to develop a comprehensive government-wide anti-corruption initiative.
The 38-page plan released last week outlines steps for cracking down on criminal actors and their networks while improving cooperation among federal agencies and law enforcement. The Biden Administration announced plans to increase financial transparency and new regulations on U.S. real-estate purchases to prevent money laundering.
In this Episode, Michael Volkov reviews the new initiative.
The post Episode 218 — The Biden Administration’s New Strategy on Countering Corruption appeared first on Corruption, Crime & Compliance.
The Delaware Chancery Court is continuing its trend of permitting Caremark claims against corporate board members who fail to exercise proper oversight and monitoring of compliance programs. Over the past few years, the Delaware Chancery Court has consistently raised the stakes and expectation for Board member performance on corporate boards.
In this Episode, Michael Volkov reviews the current board member liability cases and the Court’s recent rulings.
The post Episode 217: The Growing Risk of Corporate Board Member Liability appeared first on Corruption, Crime & Compliance.
Tom Fox is a leader in the ethics and compliance field. He is regularly referred to as the “Compliance Evangelist.”
Tom has just released the Second Edition of The Compliance Handbook, a comprehensive review and guide to the elements of an effective ethics and compliance program. Tom is known for his practical and efficient approach to difficult ethics and compliance issues. His new Handbook is a must-have for ethics and compliance professionals but more importantly for business leaders and managers who understand the importance of implementing an effective ethics and compliance program.
In this Episode, Michael Volkov interviews Tom Fox about the Second Edition of The Compliance Handbook and the important issues addressed in the Handbook.
The Compliance Handbook (Second Edition) can be purchased here.
The post Episode 216 — Tom Fox Releases the Second Edition of The Compliance Handbook appeared first on Corruption, Crime & Compliance.
The Boeing 737 MAX scandal is a troublesome and disturbing case where corporate board oversight and responsibility was lacking. The implications of the board’s failure resulted in the killing of innocent passengers and the grounding of Boeing’s 737 MAX. Add to that a $2.5 billion settlement, a criminal case against a Chief Technical Pilot, and continuing safety and technical problems, and you have recipe for continuing disaster at Boeing.
The Delaware Chancery Court’s recent decision denying Boeing’s motion to dismiss shareholder derivative claims outlines a devastating picture of Board governance failures relating to Boeing’s response to the Lion Air crash in October 2018 and the Ethiopian Airlines crash in March 2019.
In this Episode, Tom Fox and Michael Volkov discuss the implications of this recent decision.
The post Episode 215 — Tom Fox and Michael Volkov Discuss the Board Governance Implications of the Boeing 737 MAX Safety Scandal appeared first on Corruption, Crime & Compliance.
Credit Suisse Group AG (“Credit Suisse”), a global financial institution, and its London-based European subsidiary, Credit Suisse Securities (Europe) Limited (“CSSEL”) resolved a wide-ranging bribery and fraud scheme involving investments and financing arrangements for an $850 million loan for a tuna fishing project in Mozambique. To resolve the violations, Credit Suisse agreed to pay a total of $547 million in penalties, fines and disgorgement as part of comprehensive criminal and civil resolutions in the United States and the United Kingdom.
In this Episode, Michael Volkov reviews the Credit Suisse global fraud and bribery enforcement action.
The post Episode 214 — Review of the Credit Suisse Global Fraud and Bribery Enforcement Action appeared first on Corruption, Crime & Compliance.