Corruption Crime & Compliance

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The Justice Department has aggressively continued to pursue False Claims Act prosecutions against healthcare companies and physicians.  By the mid-point of 2019, DOJ had collected over $800 million against pharmaceutical and healthcare professionals.  In the last few months, DOJ has brought several significant prosecutions. In this Episode, Michael Volkov reviews recent healthcare fraud enforcement cases.

Corporate board members have an obligation to oversee and monitor a company's compliance program.  In two recent cases, Delaware courts have tightened the standard governing board liability under the Caremark decision.  Several months ago, in a case involving the Blue Bell Ice Cream listeria outbreak, the Delaware Supreme Court applied a heightened standard when relating to "mission-critical" issues involving food safety to a food company.  In another decision, on October 1, 2019, in Clovis Pharmaceuticals, a Delaware Court denied a motion to dismiss a complaint finding that a board's failure to react to red flags concerning a clinical trial protocol satisfied the Caremark standard. In this Episode, Mike Volkov discusses these two important cases and board member liability under Caremark.

Chief compliance officers are often responsible for managing a company's conflicts of interest policy. A company can suffer serious legal and reputational harm if it fails to identify and mitigate conflicts of interest. The nature and scope of conflicts of interest vary across the organization, especially at senior management and board levels. Given the number and complexity of conflicts, CCOs have to devote adequate attention and resources to managing these risks. In this Episode, Michael Volkov examines issues surrounding conflicts of interests and offers practical, risk-based solutions.

The government has stated that a well-designed compliance program includes “appropriately tailored training and communications.” Compliance policies cannot work unless effectively communicated throughout a company. Communications and training programs ensure that directors, officers and employees are aware of and follow compliance policies and procedures.   Indeed, the Justice Department’s recent Evaluation of Compliance Program Guidance noted that integration of a company’s policies and procedures should include periodic training of all directors, officers and relevant employees and where appropriate agents and business partners. Further, the Guidance states that the company’s training program has to be tailored to the audience’s size, sophistication or subject matter expertise.   In this Episode, Mike Volkov outlines effective strategies for a training program.

In July 2019, the Justice Department's Antitrust Division issued its Guidance for Evaluation of Compliance Programs.  Based on this comprehensive document, companies need to review and enhance their antitrust compliance programs to address risks of anti-competitive cartel activity, including price-fixing, bid-rigging, territorial and customer allocations. In this Episode, Mike Volkov reviews the elements of an antitrust compliance programs and provides practical advice for implementing an effective antitrust compliance program.

In a record setting FCPA enforcement day, the SEC settled three separate FCPA enforcement actions on Friday, September 27, 2019.  The three cases involved: Quad/Graphics, a Wisconsin company; Barclays Bank, a global bank, and Westport Energy, a clean energy company, and its former CEO, Nancy Gougarty.  Each of the cases involved interesting enforcement facts and situations. in this Episode, Michael Volkov reviews each case and analyzes the facts surrounding the violations and the respective settlements.  

In a significant development, the Business Roundtable issued a restatement of general corporate purpose.  The restatement embraces a number of important social trends and awareness of ethical culture and broader principles.  While the statement is laudatory, the proof will be in tangible actions taken to implement the broad and important purposes. In this Episode, Michael Volkov examines the Business Roundtable Restatement and reflects on the important role that corporate boards should play in the oversight of a company's ethical culture.

Capital One suffered a serious data breach as a result of the actions of one individual who downloaded nearly 30 GB of 100 million Capital One Financial Corporation credit applications from an Amazon cloud data server. The Capital One data breach underscores the risk of cyber breaches caused by a single bad actor who gained unauthorized access through Amazon's could data server. This unfortunate data breach demonstrates the importance of managing data security risks through third parties (in this case a cloud vendor). In this episode, Michael Volkov reviews the Capital One data breach and outlines third-party cybersecurity risks and strategies for mitigating these risks.

In this episode, Michael Volkov provides an update on FCPA issues, including: (1) Juniper Networks' FCPA settlement with the SEC for $11.7 million for conduct in Russia and China: (2) Deutsche Bank's FCPA settlement with the SEC for $16 million for hiring of relatives of foreign officials in China and Russia; and (3) the Second Circuit Court of Appeals decision affirming the conviction and sentence of Ng Lap Seng for bribery of United Nations officials and rejecting application of the Supreme Court's decision in McConnell to FCPA cases.