Author Archives: Serina M. Vash

Compliance, Candor, and the Role of Directors

by Donald C. Langevoort & Hillary A. Sale

How to develop a corporate culture supporting corporate compliance is a key topic. Directors and officers both play roles in creating corporate culture; they are responsible for tone at the top, and that tone is key to compliance. The role of directors is what we explore today – as well as how the securities and corporate laws set the contours of that role. Our interest is in whether and how directors can and do play a role in building a culture of candor and its contribution to a culture of compliance.

Various actors on the federal level have been pushing boards of directors to become more involved in disclosure quality control, and as boards do so, they are increasingly engaged in setting the compliance and candor culture. Continue reading →

Kleptocrats in the Crosshairs

by Sharon Cohen Levin

Let’s say you’re a powerful foreign leader who has accepted millions of dollars in bribe payments, a “Kleptocrat.”  You’ve got a problem: where to stash the loot?  The stacks are too big to stockpile in your piggy bank or sock drawer.  You need to be more creative.   Here is one solution: set up an off-shore company, open a bank account in a jurisdiction with strict bank secrecy laws, load the account with the bribe payments you received, and then buy premium real estate in the United States.  Voila – clean money.

Not so fast. Continue reading →

Politics Aside, Americans Seem Confused On What Is And What Is Not A Crime


FBI Director James Comey was grilled last week on Capitol Hill where Republicans condemned and Democrats lauded his decision to not recommend prosecuting presidential candidate Hillary Clinton for her actions of handling (mishandling) classified information.  As I watched Comey’s testimony, I was struck by how two groups of people could look at the same acts of a person and have such polarizing views as to whether or not a criminal act had occurred.  Politics aside, we need to have more of a consensus on what constitutes a crime. Continue reading →

The First FCPA Pilot Program Declinations: Initial Returns and Unanswered Questions

by Anouck Giovanola and Justin Spiegel

On April 5, 2016, the Department of Justice’s Fraud Section announced a new Foreign Corrupt Practices Act (“FCPA”) enforcement pilot program (the “Pilot Program”) designed to “promote greater accountability for individuals and companies that engage in corporate crime by motivating companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.”[1]  The memorandum announcing the Pilot Program sets forth four prerequisites for corporations seeking to obtain credit under the program—voluntary self-disclosure of the misconduct, full cooperation with the investigation, timely and appropriate remediation, and disgorgement of all profits related to the violation—and describes the additional cooperation credit available to companies under the terms of the Pilot Program. Continue reading →

Rewarding Subtlety: McDonnell v. United States

by Daniel Richman and Jennifer Rodgers

As teachers, we sometimes push our students to clarify their legal arguments by telling them that “subtlety isn’t rewarded.”  As former prosecutors, we like to think that corrupt officials can’t avoid prosecution simply by avoiding B-movie exchanges that they will do “x” if they are given “y.”  This week’s decision in McDonnell v. United States (PDF: 158 KB), however, could be a lesson that subtlety may indeed be rewarded, and that gentility could protect a high official from federal corruption charges. Continue reading →

The Presumption of Innocence:  Bedrock Legal Principle or Outdated Notion From Days Gone By?

by Gregory Morvillo

I have a confession to make.  I have come to the conclusion that the notion that an accused citizen is innocent until proven guilty is a concept in name only, and is not something people really, truly believe.  I fear it has gone the way of proverbs like “an apple a day keeps the doctor away” and “the way to a man’s heart is through his stomach” old-fashioned adages not accepted as true in the modern world.

As you all know, the notion of innocent until proven guilty is, of course, explicitly in the United States Constitution, right?  Not so much.  Continue reading →

How To Stop A Perpetrator: Making Compliance Training More Effective

by Walt Pavlo

I am commemorating a twentieth anniversary this year; my commitment of a financial crime while working at MCI Telecommunications. Over these years I have reflected on my reckless actions and have tried to make sense of it all. The fact is that I knew right from wrong and good from bad, but I had no experience in situations where the outcomes for making the right decision had such overwhelming consequences. Meeting financial goals through accounting tricks not only made our financials look good, it made me look good as well. There also seemed to be acceptance of my creative thinking, until it could no longer be sustained. That led to my belief that if I were going to cross the line further, why not do it for more personal benefit? It was a twisted way of thinking that cost me a few years in prison and a number of personal consequences … all well deserved. However, we still see otherwise good people making terrible mistakes. So is there anything more we can do? Allow me to speculate. Continue reading →

Greater Transparency in Monitor Reports:  An Unintentional Result?

by Veronica Root

For several years, scholars, regulators, corporations, practitioners, reporters, and the public have debated whether monitor reports should be publicly available.  Those in favor of greater transparency argue, in part, that allowing access to monitor reports would serve as an additional check on efforts to improve compliance within corporations.  Those in favor of robust confidentiality argue, in part, that confidentiality serves to encourage more frank conversations and effective participation in the monitorship process by employees at the monitored organization.  The debate, however, was largely an academic one, because courts appeared to defer to the government’s contention that monitor reports should be kept confidential.[1]  Yet in January 2016, a district court ordered that HSBC’s monitor’s report be made publicly available, subject to certain redactions.  The district court’s ruling triggered yet another round of commentary and discussion regarding the appropriate norms governing the disclosure of monitor reports.  Continue reading →

Dashboard Compliance: What Will Be Its Consequences?

by James Fanto

Technology raises many interesting issues for the growing field of compliance and could even transform the nature of this control position.  The main question to be asked in this post is whether that transformation would make compliance more, or less, effective in accomplishing its mission of ensuring that an organization and its agents comply with laws, regulations and professional and ethical standards.  The argument would go something like this.  As in so many other activities, information technology and data analytics provide tools to compliance officers, particularly, although not exclusively, in their tasks of surveillance and monitoring.  In regulated domains, in fact, regulators use this technology for their own supervision of firms and expect compliance officers to do the same.  This use could result in a model of compliance officers sitting in front of a digital dashboard that enables them to monitor the firm’s activities for compliance.  The question is whether this new model will enhance the efficiency of compliance officers or whether it will distance them from the activities themselves and from the firm’s employees.  Continue reading →

Intent to Benefit:  What is Old is New Again

by Gregory Morvillo

In the wake of United States v. Newman (PDF: 357 KB), there were many opinions about the future of insider trading prosecutions.  Some decried the decision as giving a pass to Wall Street insiders.  Others considered it a rebalancing of the scales of justice to hold the government to a burden set out some 30 years ago in Dirks v. SEC (PDF: 16.3 MB).  Regardless of which side one finds oneself on, I am reminded of the adage:  the more things change, the more they stay the same.  Why?  Because what was old is new again.

How can it be, with so many legal experts taking the position that things have changed one way or the other, that things are actually “the same”?  Continue reading →