Compliance Bits and Pieces for April 9

Here are some recent compliance related stories that I found interesting:

Bribe Fighter: The strange but true tale of a phony currency, shame, and a grass-roots movement that could go global By Jeremy Kahn in the Boston Globe

What good is a currency that is not even worth the paper it’s printed on? That’s the intriguing question raised by the new “zero rupee note” now circulating in southern India. It looks just like the country’s 50 rupee bill but with some crucial differences: It is printed on just one side on plain paper, it bears a big fat “0” denomination, and it isn’t legal tender.

OIG Issues Recs to Overhaul SEC Bounty Program by Melissa Klein Aguilar in Compliance Week’s The Filing Cabinet

The Securities and Exchange Commission’s bounty program for rewarding whistleblowers is sorely in need of an overhaul, according to the agency’s Inspector General, which issued nine recommendations for improving the program.

Staffer One Day, Opponent the Next by Tom McGinty in the Wall Street Journal

The revolving door can turn swiftly at the Securities and Exchange Commission. … Others argue that employees of every government agency leave for the private sector and that the rules in place guard against conflicts of interest. An SEC spokesman said the disclosures required of former employees constitute an extra precaution by the agency to ensure that the law and ethics considerations are followed.

My Commentary Part 2: Ernst & Young’s Letter To Audit Committee Members by Francine McKenna in re: The Auditors

Unfortunately for Ernst & Young, even before the release of the Lehman report, too many things had already gone wrong. Their credibility is, pretty much, shot to hell. Their only hope may be that both civil and criminal proceedings take so damn long that they’ll instead die a slow and painful death by litigation and suffocating legal fees than by the swift sword of an Arthur Andersen-type criminal indictment by the US Department of Justice.

Facebook Tells Employees Not to Sell Shares by Mark J. Astarita, Esq in

Facebook has an interesting problem – it is in danger of having too many shareholders, an outcome that is being made possible by online trading sites like, which allows shareholders in private companies to sell their shares to others. … Facebook is concerned that the expansion of its number of shareholders to 500 will force it to go public before management decides that it is time to do so, and has enacted a policy to attempt to forestall that event.

Nanny Sam To The Rescue: Stop the Startups! by Bob Rice in the Huffington Post

One of George Bush’s most memorable lines was his complaint that the French had no word for “entrepreneur”. Well, if Senator Dodd’s new financial reform bill becomes law, we may well have the word, but no longer any need for it. Dodd’s changes would disqualify about 75% of the individuals who currently fund our country’s early-stage ventures from making further investments. It would also impose brand new SEC filing requirements and long waiting periods on fledgling businesses before they can accept what is often desperately needed capital. If the idea is to strangle American innovation in its crib, the bill is a masterstroke.

SEC faces setbacks, skepticism in trying to reform its enforcement image by Zachary A. Goldfarb in the Washington Post

A year-long effort by the Securities and Exchange Commission to overhaul its enforcement of laws against corporate crime has run into courtroom setbacks and internal skepticism, underlining how difficult it is for the agency to remake itself as a get-tough cop.

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