Compliance Bricks and Mortar for March 28


These are some of the compliance-related stories that recently caught my attention.

Encouraging Communication of Employee Concerns by Michael Volkov in Corruption, Crime & Compliance

One of the hardest issues for compliance professionals is encouraging employees to raise concerns about ethics and compliance issues.  It has become even more difficult when the government establishes whistleblower programs offering financial rewards for employees to tell the government about the problems. Employee surveys provide important and interesting information.  A recent survey by CEB (here) found that only five percent of employee concerns are reported on a company’s hotline system.

Insights From LRN’s 2013 Ethics & Compliance Leadership Survey Report

“Program effectiveness” is a term ethics and compliance (E&C) professionals frequently use as they strive to understand whether or not their companies’ investment and effort are paying off. Those who manage E&C programs generally collect and report whatever is immediately measurable, such as number of helpline calls or code violations, and while this information is helpful, it doesn’t tell us which programs are particularly effective or what those programs have in common. Every year, LRN conducts a survey of our client partners across the globe to get a pulse of which ethics and compliance tools work and which don’t work as well – and why.

If You Invested Less Than $925,000 With Bernard Madoff, You’re Now Even by Jordan D. Maglich in Ponzitracker

In an announcement from the court-appointed trustee overseeing recovery for victims of Bernard Madoff’s massive Ponzi scheme, a proposed fourth distribution of approximately $350 million will resolve all claims from victims with an allowed claim of $925,000 or less. The trustee, Irving Picard, sought court approval to make a total distribution of approximately $349 million, which will bring the total amount distributed to Madoff victims at nearly $6 billion to date. With an average payment of approximately $323,000, the proposed distribution will also fully satisfy nearly 52% of the 2,189 accounts for which a claim was submitted.

The Destruction of Arthur Andersen and the Use of DPAs in FCPA Enforcement by Tom Fox in the FCPA Compliance and Ethics Blog

The debate over the efficiencies of Deferred Prosecution Agreements (DPAs) continued this week with additional criticism of their use. I have argued that DPAs are in a corporation’s interest because they can bring certainty to the conclusion of an enforcement action and allow it to make remedial changes and move forward. However yesterday I came across an article by Larry Katzen, a former partner at Arthur Andersen and author of “And You Thought Accountants were Boring – My Life Inside Arthur Andersen.” Katzen’s piece is entitled “A Business World Massacre – What Can Happen 
When Government Needs a Scapegoat” and it details the destruction of the firm after it’s guilty verdict surrounding the Enron scandal.