Category Archives: Contributing Blogger Posts

Why Employees Often Remain Silent and What Needs to be Done to Encourage Speaking Up

by Elizabeth Wolfe Morrison

For a compliance program to be effective, employees must be willing to report suspected wrongdoing.  But it cannot be assumed that employees who see or suspect something will say something.  It has been estimated that less than half of all employees who witness wrongdoing report it.  Wells Fargo is a good case in point.  It is clear that a large number of employees recognized that something was not right.  Some spoke up and were ignored.  Others didn’t even speak up.

We all like to believe that we are ethical people and that when faced with a tough choice we will do the right thing.  But the evidence suggests otherwise.  Good people often find themselves in situations that create strong social cues or even overt pressures to withhold information about misconduct.  The result is what’s known as “employee silence.” Continue reading

DOJ’s Expectations for Voluntary Disclosure and Cooperation: In Loco Parentis for Corporations?

by Lee G. Dunst

We are now almost one year in since the DOJ announced with much fanfare its repackaged approach to corporate cooperation in the Yates memo in September 2015, followed months later with the much-ballyhooed release of the FCPA Pilot Program in April 2016.  These highly publicized pronouncements reinforced the perception of DOJ’s focus on proactive corporate cooperation and voluntary disclosure with the enticement of the alleged benefits for companies.  At the same time, DOJ clearly has been engaged in a deliberate effort to tout the apparent benefits of corporate cooperation with its very public announcements in spring/summer 2016 of declinations of prosecutions in some circumstances (for example, Akamai, Johnson Controls and Nortek) and reduced penalties in other cases (such as Analogic/BK Medical), citing voluntary disclosures and cooperation as one of the primary reasons for leniency.  Continue reading

Federal Bank Prosecutions

by Brandon L. Garrett

In a recent piece published in the Yale Law Journal Forum, I describe data collected concerning prosecutions of banks.  I describe how while formerly quite rare, bank prosecutions have increased in numbers and in the size of penalties.  I also analyze the approach of prosecutors and ask whether it is sufficiently effective.  Continue reading

Crediting the Behavioral Approach

by Timothy J. Lindon

The compliance message to companies from Washington is practical and encouraging.  Regulators are not looking to reward check-the-box programs or companies that simply say the right things about integrity in their Codes of Conduct.  They are looking for innovative approaches that work to prevent misconduct in the real world, and can be measured.

The problem of course is identifying and measuring what works.  We have lots of compliance metrics like training completion rates and the number of helpline calls, but none of them measures fully the impact of our programs on ethical decisions by individual employees.  In fact, research shows that many of the activities credited under the federal sentencing guidelines may actually be counter-productive.  For example, training that is regarded by employees as a check-the-box exercise is viewed as insincere and undermines compliance with policies.

So what works? 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, 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