Corruption Crime & Compliance

After a lengthy investigation (yes, 8 years), Walmart agreed to settle its FCPA violations and paid approximately $282 million , divided as follows: (1) $138 combined criminal penalty under the terms of a three-year non-prosecution agreement; and (2) $144 million disgorgement pursuant to an agreement with the SEC. Walmart’s Brazil subsidiary entered a guilty plea to one count of violating books and records in the Eastern District of Virginia. In this episode, Michael Volkov reviews Walmart's settlement and identifies some interesting points and trends.  

The California Consumer Privacy Act of 2018 (the “Act”) was signed into law by California Governor Jerry Brown on June 28, 2018, after being hastily introduced in the California Legislature just a few days prior. The Act is effective January 1, 2020. In this episode, Michael Volkov interviews Teresa Troester-Falk, Chief Global Privacy Strategist at Nymity, concerning the Act and the compliance implications for businesses. The Act provides “consumers” (defined as natural persons who are California residents) four basic rights in relation to their personal information: the right to know, through a general privacy policy and with more specifics available upon request, what personal information a business has collected about them, where it was sourced from, what it is being used for, whether it is being disclosed or sold, and to whom it is being disclosed or sold; the right to “opt out” of allowing a business to sell their personal information to third parties (or, for consumers who are under 16 years old, the right not to have their personal information sold absent their, or their parent’s, opt-in); the right to have a business delete their personal information, with some exceptions; and the right to receive equal service and pricing from a business, even if they exercise their privacy rights under the Act.

OFAC’s new framework guidance for sanctions compliance programs stretched into new territory with its risk assessment requirement. This new approach reflects OFAC’s recent aggressive enforcement programs.   The scope of a risk assessment has to mirror the breadth of enforcement risks and has to include review of:   (i) customers, supply chain, intermediaries, and counter-parties; (ii) the products and services it offers, including how and where such items fit into other financial or commercial products, services, networks or systems; (iii) the geographic locations of the organization, as well as its customers, supply chain, intermediaries and counter-parties; and (iv) potential merger and acquisitions, especially those involving non-U.S. companies or corporations.

Data privacy has become a hot topic lately. Companies have built massive fortunes by selling users’ personal information to the highest bidder. Meanwhile, they often fail to secure that same data while hackers run amok, putting the users at risk.  What’s a person to do?  Enter ImagineBC.  In the ImagineBC community, you’re in control of your personal information – and free to monetize it. Built on blockchain security, it’s the only place where your privacy empowers you to transact securely, shop independently and earn on your own terms.  In this episode, ImagineBC CEO Erik Rind and Matt Stankiewicz discuss the current disarray of data privacy, and how Erik’s company helps to return the power back to the user – both for control and monetization.  ImagineBC will offer its users an ecosystem to connect marketers, content creators, and service providers with individuals who can control the flow of their personal information and essentially use it as the currency.  All the while, the company will leverage the blockchain to ensure security and anonymity. Website:  https://imaginebc.net/ Special thanks to Brawner Communications.

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Companies are starting to understand that an effective internal investigation program is a critical function to promote a speak up culture. A company that has a dysfunctional internal investigation program will find it difficult to prevent and detect misconduct. By contrast, a company that maintains an effective internal investigation program by adhering to its standard operating procedures, treating whistleblowers with respect and preventing any hint of retaliation, meting out consistent discipline, integrating investigation findings into compliance program enhancements and reporting on a transparent basis to employee about the performance of its investigation and discipline program – will advance the company’s culture and maximize potential reporting of code of conduct and legal violations.   To this end, companies have to commit to a multi-step review and improvement process for its internal investigation program. This is an exercise that is limited to reviewing the operation of the internal investigation program from the receipt of a reported concern to the conclusion of the investigation and handling of the results. In this episode, Michael Volkov discusses how to audit and improve your internal investigation program.

On the heels of the Justice Department’s announcement of its new compliance guidance, on May 2, 2019, the Treasury Department’s Office of Foreign Asset Control (“OFAC”) issued its promised guidance for sanctions compliance programs (“SCP”). Together with its aggressive enforcement of economic sanctions, OFAC has set a new standard for SCPs, and has “strongly encourage[d]” companies and individuals subject to OFAC jurisdiction to implement a “risk- based approach to sanctions compliance by developing, implementing and routinely updating a SCP.”   Michael Volkov discusses OFAC's new guidance and the importance of sanctions compliance programs.  

In a major development in ethics and compliance program expectations, the Justice Department has issued a new and important revised guidance on the Evaluation of Corporate Compliance Programs . The new Evaluation Guidance supersedes the prior document issued in February 2017, which contained a lengthy list of questions on key topic areas.   Join Michael Volkov as he discusses the new guidance and outlines the impact for all corporate compliance programs.  

The blockchain revolution is still merely in its infancy.  Liquidity Digital seeks to continue pushing the industry forward, by digitizing securities - stocks, derivatives, real estate, and more - and placing them on the blockchain.  Liquidity Digital is building an ecosystem for the creation of new assets, introducing ways to allocate capital to traditionally underserved areas of financial markets and provide a practical application of distributed ledger technology. In this episode, Syed Hussain, CEO of Liquidity Digital, explains to Matt Stankiewicz how his company is seeking to enhance existing financial markets through Digital Security Offerings. By digitizing existing securities, Liquidity Digital seeks to add better accessibility, transparency, and liquidity to the markets.  Syed also discusses the need for improved education in the industry as a whole, in order to better promote mass adoption.

With the growth of the compliance profession and the importance of compliance functions as part of corporate governance, there has been a significant increase in the quantity and quality of compliance studies and surveys. It takes time to keep up with all the compliance information being developed and released. In this episode, Michael Volkov reviews three recent compliance studies.