Compliance Bricks and Mortar – Page 28

Compliance Bricks and Mortar for February 1

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

SEC Charges Former Jefferies Executive with Defrauding Investors in Mortgage-Backed Securities by Mark Astarita in the Securities Law Blog

According to the SEC’s complaint filed in federal court in Connecticut, the former executive arranged trades for customers as part of his job as a managing director on the MBS desk at Jefferies. The SEC alleges that the former executive would buy a MBS from one customer and sell it to another customer, but on many occasions he lied about the price at which his firm had bought the MBS so he could re-sell it to the other customer at a higher price and keep more money for the firm. On other occasions, he misled purchasers by creating a fictional seller to purport that he was arranging a MBS trade between customers when in reality he was just selling MBS out of his firm’s inventory at a higher price. Because MBS are generally illiquid and difficult to price, it is particularly important for brokers to provide honest and accurate information.

Floyd Landis’ Whistleblower Lawsuit Against Lance Armstrong and Others

I’m sure you have heard about the whistleblower lawsuit initiated by Lance Armstrong’s former teammate, Floyd Landis, but if not, where have you been? In this suit Landis has targeted several others that were part of the U.S. Postal Service team for being a part of or knowing of teammates using banned substances for performance enhancement.

What’s in a Name? Speculation, Hedging, They Are Not the Same Thing by Ernest E. Badway in Securities Compliance Sentinel

Recently, in a settled SEC enforcement action, a mutual fund manager allegedly used an option strategy, but the SEC believed it was more speculative than hedging. See http://www.sec.gov/litigation/admin/2012/33-9377.pdf.

Raising a Deaf Puppy in GeekDad

When we moved into our new house last year, we wanted to expand our family. It was time to get a dog. I grew up with a dog in my family and wanted my kids to have the same experience. I expected that would mean random items around the house would get destroyed by the playful puppy. What I didn’t expect was having to learn sign language.

Compliance Bricks and Mortar for January 25

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

The SEC at a Crossroads: Can Things Be Turned Around? by Broc Romanek in the CLS Blue Sky Blog

Over the past fifteen years, the SEC’s reputation has been routinely sullied – in the press, by the Courts and certainly in the halls of Congress. Although the mud slung at the SEC has intensified since the 2008 financial crisis and revelations of the Bernie Madoff Ponzi scheme, the Commission’s problems began well before then. Particularly, the Enron and World.com scandals forced editors to move journalists into the financial realm where bashing the SEC became good copy. More and more, the SEC has been losing major decisions in the Courts. Professor John Coffee of Columbia Law School recently indicated that “the SEC’s batting average is close to ‘zero for 2008’ in the few cases that it has taken to trial stemming from th[e] financial crisis.” And the SEC’s major case losing streak extends well before the 2008 crisis. In addition, recently departed SEC Chairman Mary Schapiro was asked by Congress to testify at what is likely a record rate for a SEC official. Those hearings almost never went well for poor Mary.

Chesapeake Lighthouses and Lighting the Way for Compliance by Tom Fox

I thought about the story of these lighthouses and how they literally lit the way for sailors for over 200 years when I read an article in the Q2 issue of Ethisphere Magazine, entitled “Imagination Working with Integrity: How General Electric Creates a Global Culture of Ethics”, by Michael Price. Price discusses how General Electric (GE) has made “ethics and compliance a benchmark of its operations around the world, and is, in many ways the gold standard that other companies look to when it comes to modeling global compliance and ethics programs.”

SEC Faces A Swarm Of Legal Issues In Considering The Investor Advisory Committee’s Recommendations Concerning General Solicitation by Keith Paul Bishop in California Corporate and Securities Law

The SEC’s Investor Advisory Committee held another meeting last week with Elisse B. Walter making her first public appearance as SEC Chairman. She and Commissioner Luis A. Aguilar had many kind words for the Committee’s recommendations with respect to lifting the ban on general solicitations in Rule 506 offerings. The insouciance of their remarks, however, was in sharp contrast with the missed deadlines and many legal issues swirling around the Committee and its recommendations.

Final FATCA Regulations Released in Compliance Avenue

While the Final Regulations will be effective when published in the Federal Register (expected to occur on January 28, 2013), the timelines for the various due diligence, reporting and withholding provisions incorporate the delayed deadlines set out in IRS Announcement 2012-42 and are being phased in to allow firms to develop the necessary systems and procedures and to align them with any intergovernmental agreements. For example, withholding agents, which may be U.S. or non-U.S. entities, will not be required to implement U.S. account verification procedures prior to January 1, 2014, and the deadline for foreign financial institutions (“FFIs”), generally including offshore investment vehicles, to file any required FATCA reports for fiscal years 2013 and 2014 will be March 31, 2015.

The Danger of a “Paper” Compliance Program by Michael Volkov in Corruption, Crime & Compliance

The FCPA Guidance contains many important compliance reminders which should be incorporated into every anti-corruption compliance program. Perhaps the most important observation included in the FCPA Guidance was the statement that:

DOJ and SEC have often encountered companies with compliance programs that are strong on paper but that nevertheless have significant FCPA violations because management has failed to effectively implement the program even in the face of obvious signs of corruption.

DOJ/SEC’s observation should be taken seriously. Every company should ask itself this basic question: Have we “effectively” implemented our compliance program?

Science: Ruining Everything Since 1543

Saturday Morning Breakfast Cereal is a daily-updated comic strip that’s a GeekDad favorite. The author, Zach Weiner, announced a new collection of his science related comics are being published in a single book: Science: Ruining Everything Since 1543. He’s creating this book as a Kickstarter project. Give him money now, and you get the book when he’s done. Plus there’s more great stuff if you want to open your wallet a bit wider.

Compliance Bricks and Mortar for January 4

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These are some of the compliance related stories that caught my attention during this first week of 2013 and last week of 2012.

Khuzami Posts Blog Comment Defending SEC’s Record, Policies by Bruce Carton in Compliance Week

In a December 27 post, Johnson wrote that as Robert Khuzami will reportedly soon step down as Director of Enforcement at the SEC, “the Obama administration should press for the appointment of Neil Barofsky, former special inspector general for the Troubled Asset Relief Program, to this position.” …

A day later, on Friday, December 28 at 5:55 pm, someone identified as “Robert Khuzami” fired back in the comments section of the blog post. (Although it is, of course, true that “On the Internet, nobody knows you’re a dog,” in this case an SEC spokesman confirmed to me that the comment was from Khuzami himself).

DOJ and SEC make Risk Assessment the Key to Compliance Effectiveness by Jim Bowers in Corporate Compliance Insights

Effective compliance programs are grounded on a company’s periodic assessment of risks. This premise underpins the compliance standards delineated in the Federal Sentencing Guidelines, the recent DOJ/SEC guidance and other federal regulatory guidelines. A compliance risk assessment provides an early warning process for detecting compliance threats, thereby enabling a company to address compliance problems before they become violations of law. The risk assessment process identifies and assesses compliance risks, evaluates controls put in place to mitigate those risks, and monitors the effectiveness of controls on an ongoing basis.

SEC Report Reviews Work of Enforcement Division by Thomas O. Gorman in SEC Actions

The SEC’s 2012 Agency Financial Report details its performance over the last government fiscal year which ended September 30, 2012. Two sections are devoted to the enforcement program, one which is an overview of the Division’s work and an Appendix which provides additional detail.

In discussing the work of the Enforcement Division the Report emphasizes what it calls the “full spectrum” of the program, referring to the different areas in which actions were brought in compiling a near record setting number of cases filed. Last year the Division brought 734 actions, second only to the record 735 initiated the prior year. Collectively, the actions resulted in about $3.1 billion in orders for disgorgement, penalties and other relief. The Division also made its “first whistleblower payout to an individual who provided high-quality significant information that helped stop a multi-million dollar fraud.” The Division clearly expects more from this program in the future.

Top Ten D&O Stories of 2012 by Kevin LaCroix in The D&O Diary

The year just finished included dramatic and important developments involving elections, tragedies and natural disasters. While there was nothing in the world of directors’ and officers’ liability to match this drama, it was nevertheless an eventful year in the world of D&O, with many significant developments. By way of review of the year’s events, here is The D&O Diary’s list of the Top Ten D&O stories of 2012….

Corp Fin’s New Position on Use of “Vote All of Board’s Recommendation” Button by Broc Romanek in TheCorporateCounsel.Net

Recently, Broadridge sent this letter to companies explaining a big change going forward over how voting choices will be displayed. Here is an excerpt from the letter:

Broadridge, transfer agents and other service providers in the proxy distribution industry were recently informed of a new interpretive position being taken by the staff of the SEC that will affect the 2013 proxy season. Under that position, Broadridge and other service providers can no longer present shareholders with a “Vote with the Board’s Recommendations” button when soliciting proxies or voting instructions online, over the telephone, or through Broadridge’s unique mobile voting platform, unless they are also presented with a “Vote Against the Board’s Recommendations” button.

Former SEC Chair Pitt Says Two No-Action Letters Block SEC Review of Outsourcing Voting to Proxy Advisory Firms in Jim Hamilton’s World of Securities Regulation

In remarks at a Chamber of Commerce seminar on the role of proxy advisory firms, former SEC Chair Harvey Pitt said that, while the outsourcing of shareholder voting authority to proxy advisory firms is a breach of an existing fiduciary obligation, the chances of SEC enforcement actions in this area are slim to none. This is because of two SEC no-action letters issued in 2004, Egan-Jones Proxy Services and Institutional Shareholder Services, which effectively encouraged the outsourcing of voting authority to proxy advisory firms.

Keyword: Seizure by Scott Greenfield in Simple Justice

Tim Hamilton, artist of the Eisner-nominated adaptation of Ray Bradbury’s Fahrenheit 451, had his advance payment for the upcoming graphic novel ARMY OF GOD, a non-fiction telling of Joseph Kony’s activities in the Congo, seized by the OFAC under suspicion that the money was being laundering for a terrorist organization… The federal banking authority, which monitors every wire, foreign and domestic, apparently seized the funds due to the title of the book, ARMY OF GOD, which threw up a red flag.

Corporate Compliance in 2013: All About Seeing the Data by Matt Kelly in Compliance Week

In one form or another, I hear this complaint regularly: that compliance departments cannot achieve the visibility into corporate operations that they need if they’re to do their jobs effectively. Once upon a time, when we were still mired in a more paper-centric world, the complaint was that other business departments never took compliance seriously. Now (mostly) everyone does, but in the data-centric world, nobody really knows the full scope of what’s going on at the business anyway.

Compliance Bricks and Mortar for the End of 2012

It’s been a slow week in compliance. The highways and trains have been near empty during my commute. It seems there are more seagulls than people in the Financial District. But a few compliance-related stories caught my attention.

Why a Popular Subsidy for Banks Died in the Senate by John Carney in CNBC’s NetNet

The program, which is known as TAG, was launched during the financial crisis to support liquidity and bank stability. The basic idea was to cover non-interest bearing deposit accounts used for things like payrolls that exceeded the normal FDIC insurance limits. Banks could opt-in and pay a fee that was supposedly based on estimates of the program’s costs.

SEC v. Schooler: Real Estate Investment Fraud Shut Down by Sarah Emery in The Race to The Bottom

To obtain a preliminary injunction granted, the SEC must establish a prima facie case that the Defendants violated securities law and a reasonable likelihood that the violations will be repeated. Defendants asserted that the interests in the general partnerships were not securities.

The definition of security does not explicitly include interests in general partnerships. The SEC, however, asserted that the interests were investment contracts. An investment contract is a “a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”

The Financial Planning Flowchart by Nick Summers and Karen Weise in Bloomberg
Take a deep breath and answer honestly:

I’m going to end with some grammar humor from my favorite comic Saturday Morning Breakfast Cereal:

Compliance Bricks and Mortar – Mayan Apocalypse Edition

If you’re reading this, then the Mayan Apocalypse didn’t happen. (At least not yet.) That means back to work and a look at some of the compliance stories that caught my attention recently.

Dispatches From the Front Lines of the Ethics & Culture Wars by Matt Kelly in Compliance Week

Does your organization know what its values actually are? That was the first question I asked at our roundtable, playing to the cynics who say most companies either don’t have clearly articulated values beyond the profit motive, or don’t bother telling employees what those values are. More than a few roundtable participants reluctantly agreed that the cynics have a point.

Cole-Frieman & Mallon LLP 2012 End of Year Checklist

December is the busiest month of the year for most hedge fund managers. In addition to all of the administrative details involved in closing out the year, the regulatory landscape has shifted dramatically over the past year. As a result, year-end processes and 2013 planning are particularly important, especially for General Counsels, Chief Compliance Officers and key operations and financial personnel. We have updated our own year-end checklist to help managers stay on top of these priorities.

More on “Chaos in the SEC’s Inspector General’s Office: ‘He Said, They Said'” in CorporateCounsel.net

The latest is that former Assistant Inspector General Weber has filed a $20 million lawsuit alleging he was fired for being a whistleblower. And the complaint is full of juicy details (which may – or may not – be true). Here are some articles on this development: …

Banks Behaving Badly or Brother Can You Spare A Billion (or Two)? by Tom Fox

Remember when a billion dollars was real money? Over the past couple of weeks there have been some mammoth fines paid by financial institutions for conduct, which would appear to fall under the category of “Banks Behaving Badly”. Last week HSBC agreed to pay a fine of $1.92 billion for its transgressions involving money laundering. UBS is in the final stages of negotiations to pay $1.5 billion to resolve allegations that it tried to rig interest rate benchmark (i.e. ‘Libor’) to boost trading profits. Finally, on December 10, coming in at a paltry $327 million are our old friends Standard Chartered, which admitted processing thousands of transactions for Iranian and Sudanese clients through its American subsidiaries; subsequently to avoid having Iranian transactions detected by the US Treasury Department computer filters, Standard Chartered deliberately removed names and other identifying information, according to the authorities. All in all, it’s not been a bad couple of weeks for the US Treasury, given the current stalemate over the ‘fiscal cliff’ and the need to reduce the US deficit.

Does The Victims Of Corporate Fraud Compensation Fund Deny Due Process? by Keith Paul Bishop in California Corporate & Securities Law blog

Under SB 1058, a person who obtains a final judgment against a corporation based upon the corporation’s fraud, misrepresentation, or deceit, made with intent to defraud, may after “diligent collection efforts” submit a claim to the Secretary of State for payment from the fund. Cal. Corp. Code § 2282. The Secretary of State is required to give notice to the corporation (which may contest granting of the application for payment). Cal. Corp. Code § 2282.1 The Secretary of State may deny or grant the application or may enter into a compromise with the claimant to pay less in settlement than the full amount of the claim. Cal. Corp. Code § 2284. The legislation expressly authorizes only the judicial review of a denial of a claim. Cal. Corp. Code § 2287. If the Secretary of State grants the application, she is subrogated to the claimant’s rights. Cal. Corp. Code § 2293.

Compliance Bricks and Mortar for December 14

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

‘Tis the Season When Gifts Become Bribes by Alexandra Wrage in Corporate Counsel

People who are otherwise serious about the global scourge of bribery get frustrated when anyone raises the issue of gifts as bribes. Surely, most people will say, we haven’t reached the point where holiday gift-giving is so risky that we can’t hand out bottles of wine or silks tie and scarves.

Do Lanny Breuer And Robert Khuzami Actually Read FCPA Enforcement Actions? by the FCPA Professor

At the Guidance press conference (see here) Khuzami said that he was “interested in companies spending compliance dollars in the most sensible way” and he hoped that the guidance and the hypotheticals provided would help companies as to where they can “minimize investment and where they can maximize it.” Breuer added that the DOJ wants compliance programs “to address real matters of concern.”

Against this backdrop, the question must be asked: do Breuer and Khuzami actually read FCPA enforcement actions?

Recent Foreign Corrupt Practices Act enforcement actions have involved, to name just a few, allegations about a bottle of wine (see here), a Cartier watch (see here), a camera (see here), kitchen appliances and business suits (see here), television sets, laptops and appliances (see here), and tea sets and office furniture (see here).

You Need a “Shadow” If You Want to be a RIA Today by Ernest E. Badway in Securities Compliance Sentinel

The SEC, recently, sued a private equity fund adviser for, among other things, allegedly violating Investment Advisers Act of 1940 Rule 206(4)-7, for failing to have procedures requiring verification of client signatures and instructions by a second person. See http://www.sec.gov/litigation/complaints/2012/comp-pr2012-244.pdf.

Dickering Over The Price by Scott Greenfield

The reason is that HSBC is too big to fail. If indicted or convicted of money laundering for drug cartels and terrorists, as alleged, London based HongKong Shanghai Banking Corporation could have toppled the banking system, with devastating consequences. It would have been a disaster for the economy, both ours and the worlds. Too big to fail.

So the government decided, in an exercise of discretion, to take whatever spare change they had in their pocket and call it even.

SEC Charges Eight Mutual Fund Directors for Failure to Properly Oversee Asset Valuation in the Securities Law Blog

The funds, which were invested in some securities backed by subprime mortgages, fraudulently overstated the value of their securities as the housing market was on the brink of financial crisis in 2007. The SEC and other regulators previously charged the funds’ managers with fraud, and the firms later agreed to pay $200 million to settle the charges.

Compliance Bricks and Mortar for December 7

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

High-Speed Trades Hurt Investors, a Study Says by Nathaniel Popper and Christopher Leonard in the New York Times

A top government economist has concluded that the high-speed trading firms that have come to dominate the nation’s financial markets are taking significant profits from traditional investors.

The chief economist at the Commodity Futures Trading Commission, Andrei Kirilenko, reports in a coming study that high-frequency traders make an average profit of as much as $5.05 each time they go up against small traders buying and selling one of the most widely used financial contracts.

The Encyclopedia of Ethical Failure… by Dan Ariely

Wondering whether you can ask someone to give you a PhD in exchange for a kickback? Curious whether you can get away with stuffing ballot boxes? Allow me to introduce you to the Encyclopedia of Ethical Failure. Every couple years the Department of Defense publishes the Encyclopedia (Word doc), which is likely the most sarcastic government document out there. Interestingly, golf and taxes seem to turn up a lot.

An introduction to behavioral ethics

A quarter of a century ago, as a young criminal defense lawyer, I began to be struck by how different the causes of many white collar crimes were from the then (and still) traditional view. The latter saw (sees) white collar crimes as based largely on rational calculations by profoundly bad individuals – what was then the Ivan Boesky model and now is best associated with Bernie Madoff. Although there are certainly offenses of this sort, many of the crimes of which I became aware seemed based more on environmental factors than on the indelibly bad characters of those involved. While the field did not exist at the time, this turned out to be my introduction to what was to become “behavioral ethics.”

Compliance Bricks and Mortar for November 30

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

What’s the Solution for Boring and Ineffective Compliance Training? by Joe Murphy in Corporate Compliance Insights

My experience, having worked in depth with both live and online training, is that both have the potential to be done poorly and to fail in their missions. If online training is designed so it is boring and easy to click through, or has the opposite fault of being all fun with no lasting learning, it will fail. On the other side, online training, when done well, is unmatched in its ability to reach large numbers of employees and to use advanced adult learning techniques to have a dramatic impact. It is also excellent in assuring that all employees receive a consistent message and that the employees’ participation is measured and recorded. If live training is done poorly it can result in employees getting bad advice or being subjected to painfully boring and legalistic lectures that only breed resentment.

His Last Bow: Sherlock Holmes and Embracing Chaos To Build Compliance Programs by Tom Fox

First, the hierarchical model of leadership will not work, but more importantly “There exists no single model that leads to success.” This means that compliance leadership must be ready to throw aside previous assumptions and “embrace hierarchical top-down leadership and bottom-up systems.” But this requires time for reflection both by the leadership teams and those below who are on the ground. Companies must recognize the diversity in their companies on a global basis. Not everything can be accomplished by the corporate office in the US nor can everything be run from the home office, wherever that may be. Safian ended his article by stating that “”Deciders find it really hard to accept failure, but tinkerers and engineers are undeterred by it. Failure is part of the process. We can’t run from it.” Nor should we.”

Is The SEC’s Ponzi Crusade Enabling Companies To Cook The Books, Enron-Style? by Francine McKenna in Forbes

So what happened? Call it the Bernie Madoff effect. Embarrassed that it missed the Ponzi King’s $65 billion scheme, the SEC reorganized its enforcement division, eliminating an accounting-fraud task force and adding new units to pursue crooked investment advisors and asset managers, market manipulations and violations of the Foreign Corrupt Practices Act. Since then Pfizer, Oracle, Aon, Johnson & Johnson and Tyson Foods have all paid fines to settle foreign-payoff charges.

Private Equity Fund Is Not a “Trade or Business” Under ERISA by Morgan Lewis

In a significant ruling that directly refutes a controversial 2007 opinion by the Pension Benefit Guaranty Corporation (PBGC) Appeals Board, the U.S. District Court for the District of Massachusetts held in Sun Capital Partners III, LP v. New England Teamsters & Trucking Industry Pension Fund that a private equity fund is not a “trade or business” under the Employee Retirement Income Security Act (ERISA) and therefore is not jointly and severally liable for millions of dollars in pension withdrawal liability incurred by a portfolio company in which the private equity fund had a substantial investment.

Bank of America CEO Brian Moynihan Apparently Can’t Remember Anything by Matt Taibbi in Rolling Stone

Thank God for Bank of America CEO Brian Moynihan. If you’re a court junkie, or have the misfortune (as some of us poor reporters do) of being forced professionally to spend a lot of time reading legal documents, the just-released Moynihan deposition in MBIA v. Bank of America, Countrywide, and a Buttload of Other Shameless Mortgage Fraudsters will go down as one of the great Nixonian-stonewalling efforts ever, and one of the more entertaining reads of the year.

Attorney Liable for Aiding Securities Fraud by Drafting False Opinion Letter by Barbara Black in Securities Law Prof Blog

According to the SEC’s summary judgment motion, in early 2006, Sourlis intentionally authored a materially false and misleading legal opinion, which Greenstone used to illegally issue over six million shares of stock in unregistered transactions. Among other things, Sourlis falsely described promissory notes, note holders, and communications with those holders, none of which actually existed. The SEC asserted that, contrary to Sourlis’ fraudulent opinion letter, the stock issuance did not qualify for an exemption from registration under the federal securities laws.

SEC Charges Chicago-Based Investment Adviser With Defrauding Investors In Failing Private Equity Fund

The SEC alleges that Joseph J. Hennessy and Resources Planning Group (RPG) raised more than $1.3 million by misrepresenting the Midwest Opportunity Fund (MOF) as a viable private equity fund that could offer high returns. Hennessy failed to tell investors about the fund’s poor financial condition or that their money was being used to repay MOF promissory notes that he had personally guaranteed. He therefore misappropriated client funds to make payments on the notes and prop up the fund. Hennessy used at least $641,408 to make partial payments to certain note holders, substantially reducing his personal liability on the notes.

Compliance Bricks and Mortar: FCPA Guidance Edition

The big news in compliance this week was the release of the Resource Guide to the U.S. Foreign Corrupt Practices Act (.pdf). But I have only had a chance to glance at it briefly. I’m underwhelmed, even after having low expectations. Since I have not read much, I’m posting the views of many others:

Guidance Roundup by the FCPA Professor

This post provides a roundup of commentary (law firm, individuals, and civil society organizations) relating to this week’s FCPA guidance issued by the DOJ and SEC.

Guidance; Courtesy of the Government by Scott Greenfield in Simple Justice

All of which means we know absolutely nothing more than before. Well played, government. Well played.

The guidance? Of course it’s non-binding by Richard L. Cassin in the FCPA Blog

On the inside front cover of the joint DOJ and SEC guidance released Wednesday, there’s a disclaimer that what follows is non-binding. ‘As such,’ the disclaimer continues, ‘it is not intended to, does not, and may not be relied upon to create any rights, substantive or procedural, that are enforceable at law by any party, in any criminal, civil, or administrative matter. . . It does not in any way limit the enforcement intentions or litigating positions of the U.S. Department of Justice, the U.S. Securities and Exchange Commission, or any other U.S. government agency.’

SEC’s Khuzami: We’re not interested in small potatoes by The FCPA Blog

It’s an ambitious effort to lay out how the government interprets and applies the FCPA, in order to educate companies about how to prevent their employees from violating the law, and educate employees about the limits of permissible conduct.

The Guidance: The FCPA Bar Reacts by Samuel Rubenfeld, Joe Palazzolo and C.M. Matthews in WSJ.com’s Corruption Currents

After waiting waiting roughly a year for guidance on the Foreign Corrupt Practices Act, everyone and their lawyer had something to say about it Tuesday. Here’s a sampling of the initial reactions: …

Feds Declined to Prosecute Dozens of FCPA Cases Over Past Two Years in the Corporate Crime Reporter

“To protect the privacy rights and other interests of the uncharged and other potentially interested parties, the Department of Justice has a long-standing policy not to provide, without the party’s consent, non-public information on matters it has declined to prosecute,” the authors write. “There are rare occasions in which, in conjunction with the public filing of charges against an individual, it is appropriate to disclose that a company is not also being prosecuted.”

FCPA Declination Opinions? SEC and DOJ Sort of Have Them by David Smyth in Cady Bar the Door

One of the things the guidance does at least scratch the surface of are instances in which the two agencies have come across FCPA violations that they have declined to prosecute. As we have covered in this space before – and certainly others as well – the SEC and DOJ have been notoriously tight-lipped about those cases. They exist, of course. We learned yesterday that the Justice Department has declined several dozen potential FCPA cases against companies in just the last two years. And the agencies might figure out a way to describe them discreetly, with a view toward defining (1) the contours of appropriate conduct and (2) productive self-reporting to and cooperation with the government.
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Compliance Bricks and Mortar for November 9

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

Fighting corruption with bumper stickers and public toilets: ambient accountability by Dieter Zinnbauer in Space for Transparency

Take for inspiration this passenger bill of rights, displayed literally right in your face at the backrest of the driver’s seat in New York taxis.

Imagine how much more effectively you can claim your rights and how much more hesitant a corrupt driver will be to try to take advantage of you, even if you are not from New York and have no idea how this place works.

Or think about how much easier it is for you to report unsanitary conditions in this public toilet at Seoul airport when you are presented with a sign like the below.

Convicted Ponzi Schemer Balks At Proposed 225-Year Prison Sentence by Jordan D. Maglich in PonziTracker

Durham’s trial was somewhat unique in that prosecutors unveiled wiretaps of Durham and others allegedly confirming their knowledge that they were engaging in criminal activities. The use of wiretap evidence is unique in that it is typically seen in instances of organized crime and violent offenses.

Another Guilty Plea in Madoff Probe by Reed Albergotti in the Wall Street Journal

Irwin Lipkin, 74 years old, is the ninth person to plead guilty to criminal charges in the government’s probe, which is approaching its fifth year…..

Mr. Lipkin, the firm’s former controller, allegedly helped oversee the growth of Mr. Madoff’s company from a two-man operation in 1964 to a business with billions under management, according to a lawsuit filed in November 2010 by Irving Picard, the trustee seeking to recover assets on behalf of Mr. Madoff’s victims.

Mr. Lipkin pleaded guilty to making false statements in regulatory filings and conspiracy to commit securities fraud and other crimes. He faces up to 10 years in prison on the two counts. Sentencing is set for March 22.

Committee created by Dodd-Frank at odds with JOBS Act startup financing reforms by William Carleton

Dodd-Frank impacted the startup and emerging company ecosystem at its angel-financing source, as it amended the accredited investor definition to provide that the $1 million individual net worth threshold should exclude the value of the investor’s principal residence. (It could have been worse, but angels got organized and stopped the more draconian proposals.)

Now, another Dodd-Frank provision, seemingly not pertinent to angel or venture capital investing, looks like it could have an impact on the innovation economy.

This other provision is Section 911 of Dodd-Frank, which establishes an “Investor Advisory Committee,” the purpose of which is to: …

Translating the Election Results Into Compliance Change by Matt Kelly in Compliance Week

Well, thank the lord we don’t have to go through that again for another few years.

As we all sift through election results this morning, tip your hat to the Democrats, who won big last night, and spare some sympathy to Republicans, who must feel like they were hit by a truck. And let’s spend a bit of time pondering what this will all mean for compliance executives in the next year, stuck on that perch between corporate behavior and public policy.