One Big Word Salad
Former DOJ “compliance counsel” Hui Chen (currently a consultant at Ropes & Gray’s Insight Lab) was recently interviewed by Corporate Crime Reporter (CCR) on the state of corporate compliance.
Chen’s responses were generally one big word salad.
In and of itself, who really cares.
However, what makes Chen’s responses ironic is that while serving as DOJ “compliance counsel” she (rightfully) criticized the compliance community for the “lack of precision and intellectual rigor” in much compliance writing and commentary (see here for the prior post).
SEC Commissioner Peirce Hits Another Home Run
This site is a big fan of SEC Commissioner Hester Peirce.
Recently, the SEC announced a $100 million enforcement action against “Ernst & Young LLP (EY) for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) licenses, and for withholding evidence of this misconduct from the SEC’s Enforcement Division during the Division’s investigation of the matter.”
Commissioner Peirce agreed that the underlying cheating was worthy of an enforcement action, but nevertheless objected to the SEC’s settlement.
As discussed below, her reasoning – along the lines of “give the SEC an inch and they will take a mile” – are often present in Foreign Corrupt Practices Act enforcement actions as well.
Moreover, several of Commissioner Peirce’s objecting rationales are often present in FCPA enforcement action as well – such as her statement that “what [the SEC or an SEC Commissioner] might prefer and what one might do as a matter of prudence should not be confused with what one must do as a consequence of a legal obligation.”
What Does Effective Mean?
Kroll’s recent 2022 Anti-Bribery and Corruption Benchmarking Report caught my eye (and not just because it contains beautiful photography of slot canyons and Moab, Utah area attractions such as Delicate Arch – from different vantage points – and Corona Arch).
According to the report:
“In February 2022, Kroll analyzed data from 100 U.S. and Canadian compliance professionals, the vast majority of whom projected confidence in their firms’ ability to meet challenges posed by new or tightened regulations.
In the U.S. and Canada, 70% of survey respondents ranked their companies’ ABC programs as effective, including 45% that ranked them as very effective. Over 60% attributed their confidence in the programs to the results of internal audits and the absence of bribery or corruption incidents identified to date. Respondents also overwhelmingly maintained that their organizations are meaningfully committed to a culture of integrity (74%), that senior management within the organization supports the compliance function (75%) and signals that compliance and accountability are important (75%), that new business initiatives receive appropriate risk assessment (72%) and that performance goals and incentives do not conflict with compliance processes (74%).”
“Compliance Officer” / Dad
Yesterday was Father’s Day and for the seventh straight year I publish this post (with updates) as the “compliance officer” / Dad journey continues and our twin boys turned 14 this year.
Father is just one of my titles when it comes to the boys. Coach and Compliance Officer being a few others. As to the later, Co-Compliance Officer along with my wife is the more accurate title (I wonder what the “Compliance 2.0” [or are we on to 3.0 now] folks would say about this structure)?
Father’s Day is a chance to reflect and to be sure being a Dad has informed my view of many things including compliance. When you really think about, compliance and parenting have a lot in common.
Glencore Releases An Ethics And Compliance Report
Glencore (an Anglo–Swiss mining company with headquarters in Switzerland and ADRs traded on a U.S. exchange) has been under Foreign Corrupt Practices Act (and related scrutiny) since mid-2018. Earlier this year, Glencore disclosed that it expects to resolve U.S., U.K., and Brazilian investigations in 2022 and that it reserved $1.5 billion “representing the Company’s current best estimate of the costs to resolve these investigations.” (See here for the prior post).
No doubt among the factors relevant to the resolution of these matters will be Glencore’s remedial measures and compliance enhancements.
Relevant to this issue, earlier this week Glencore released its first ever Ethics and Compliance Report which provides “a detailed overview of Glencore’s Ethics and Compliance Programme, including a summary of our approach, compliance structure, and the various systems and processes that we implement to support our programme and promote an ethical culture.”