Under the U.S. Federal Sentencing Guidelines, in order to receive credit for having an effective compliance program, and thereby reduce the fines imposed on the organization, a Board of Directors must be “knowledgeable about the content and operation of the compliance and ethics program,” and must “exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.”
We are introducing our first annual virtual Baker Tilly Fraud and Compliance Summit, hosted by Jonathan T. Marks, who leads Baker Tilly’s Global Forensic, Compliance, and Integrity Services Practice.
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Money laundering is the process of making illegally-gained proceeds (i.e., “dirty money”) appear legal (i.e., “clean”). Typically, it involves three steps: placement, layering, and integration.
Welcome to 2021
Happy New Year, and thank you to the more than 100,000 people that visited Board and Fraud in 2020!
With everything that happened last year, fraud, compliance,
Background
The Securities and Exchange Commission (”SEC”) announced an award of more than $300,000 to a whistleblower whose high-quality information and continuing assistance significantly contributed to a successful enforcement
Background
Money laundering issues have haunted many over the years. To promote greater transparency, the U.S. Senate has approved legislation requiring companies in the U.S.
Background
The Securities and Exchange Commission (“SEC”) charged the former Corporate Controller of CEB Inc. and his brother-in-law with insider trading in advance of a public announcement about CEB’s acquisition
Background
The Securities and Exchange Commission (“SEC”) today charged New York-based brand-management company Sequential Brands Group, Inc. (“Sequential or “SQBG”) with failing to impair its goodwill as required by accounting
In mid-March 2020, Cheesecake Factory (“company”) faced an unprecedented challenge to its business from the COVID-19 pandemic impact. In that context, the company issued several
Adapted from Robin Burton’s Article in the Anti-Corruption Report, November 11, 2020
Background
Since the passing of Sarbanes-Oxley in 2002, I have noticed that Boards of Directors have become more
The Securities and Exchange Commission (“SEC”) entered an “Order” on September 23, 2020, against JonesTrading Institutional Services LLC (“firm”), a broker-dealer located in California, for failing to retain text messages relating to the firm’s business. The SEC fined JonesTrading $100,000. Read more!
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Do You Know Why Your Employees are Leaving?
Exit interviews (“EI”) are usually conducted when an employee terminates. However, many interviews are not designed to unearth potential issues and information
Background
A ransomware infection can have a significant financial impact on an organization. American digital security and data backup firm » Read More
Herbalife’s business relationship in China was committed to illegal activity, which it knew or should have known violated the FCPA. Specifically, beginning in late 2006, Herbalife China provided improper benefits and payments to government officials to obtain direct selling licenses for two cities. Herbalife paid out millions of dollars in bribes. Fraudulent expense reimbursements were used to fund the bribes, which is is a common tactic for these types of bribes.
Specifically, the SEC found that Herbalife China paid bribes through extravagant meals, gifts, and other benefits given to Chinese officials to obtain sales licenses and remove negative media coverage in China. Managers at the subsidiary asked employees to falsify expense report documents, for example, adding names to meal receipts to get below the company’s per head spending limit. It also found that the payments and benefits were inaccurately recorded and that Herbalife failed to maintain a sound system of internal controls.
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The SEC just announced its first actions arising from investigations generated by the Enforcement Division’s EPS (Earnings Per Share) Initiative, which utilizes risk-based data analytics to uncover potential accounting and disclosure violations caused by, among other things, earnings management practices.
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Dunkin’ was repeatedly alerted to attackers’ ongoing attempts to log in to customer accounts by a third-party app developer. The app developer even provided Dunkin’ with a list of nearly 20,000 accounts that had been compromised by attackers over just a sample five-day period. “Yet, Dunkin’ failed to investigate the attacks to identify other customer accounts that had been compromised, determine what customer information had been acquired, or whether customer funds had been stolen.
Dunkin agreed to pay $650,000 as penalty settlement costs for the lawsuit over its failure to respond to credential stuffing attacks.
On Wednesday, September 23. 2020, the SEC voted to adopt amendments to the rules governing its whistleblower program. According to the SEC, the amendments are meant to “provide greater transparency, efficiency and clarity, and to strengthen and bolster the program.”
The amendments were proposed for public comment in June 2018 and have been adopted with some changes.
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Outline
The U.S. Commodity Futures Trading Commission (“CFTC”) will be issuing its Guidance similar to the DOJ’s recent writing on Evaluating Corporate Compliance Programs, which sends a clear message
When a company acquires another company, the successor company can be liable for the acquired company’s activities before acquisition. The U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) have administered Foreign Corrupt Practices Act (“FCPA”) enforcement actions against successor companies in cases involving egregious and sustained violations, where the successor company directly participated in the violations, or where the successor company failed to stop the misconduct from continuing after the acquisition.
This writing explores some key steps that should be taken pre and post acquisition.
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According to evidence presented at trial, Aleksandr Pikus, 45, of Brooklyn, New York, and his co-conspirators perpetrated a scheme through a series of medical clinics in Brooklyn and Queens over nearly a decade. The clinics employed doctors, physical and occupational therapists, and other medical professionals who were enrolled in the Medicare and Medicaid programs. In return for illegal kickbacks, Pikus referred beneficiaries to these health care providers, who submitted claims to the Medicare and Medicaid programs.
Pikus and his co-conspirators then laundered a substantial portion of the proceeds of these claims through companies he controlled, including by cashing checks at several New York City check-cashing businesses. Pikus then failed to report that cash income to the IRS. Instead, Pikus used the cash to enrich himself and others and to pay kickbacks to patient recruiters, who, in turn, paid beneficiaries to receive treatment at the medical clinics. The evidence further established that Pikus and his co-conspirators used sham shell companies and fake invoices to conceal their illegal activities.
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Soon all public and private organizations in the EU with more than fifty (50) employees will soon be required to comply with a new EU Whistleblower Protection law. The new law highlights the importance of responsive, transparent, and timely whistleblowing case management. So just implementing a hotline is not enough. Organizations must consider confidentiality, acknowledgment of the tip or compliant, response times, the competence of persons receiving the reports, communication with the whistleblower, and feedback on how the case is being processed. The new law also includes the right to report concerns externally while remaining legally protected. That’s a risk organizations must avoid. With the December 2021 deadline fast approaching, there is no better time for management and boards to act.
Read more!
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In July 2020, The Institute of Internal Auditors (“IIA”) updated its Three Lines of Defense Model (“Model”) to emphasize more active forms of risk management and governance that appear to go beyond merely defensive maneuvers made by the internal audit function.
Some believed the old model sent a message that we should fear risk. I never saw it that way. I understood the subliminal message was the model was about achieving objectives, which requires both the creation and the protection of value. The new model does a much better job of confirming that risk management contributes “to achieving objectives and creating value, as well as to matters of “defense” and protecting value.”
Learn why the Enterprise Risk Resilient Model might be a better choice.
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Our experience conducting fraud investigations, domestically and globally, allows us to advise our clients on measures they can take to prevent fraud from occurring and detect issues before they expand. Our clients look to us to design anti-fraud programs and controls, perform anti-bribery and anti-corruption compliance assessments, and perform proactive fraud examinations to identify possible red flags or indicators of fraudulent activity. Because of our collective skills and the depth and breadth of our experiences, we are also able to design and enhance compliance programs and serve as integrity monitors.
Correcting deficiencies, addressing gaps in controls, and remediation of specific issues is important at the end of every investigation to prevent the same or similar frauds from recurring.
We address these important client needs at the end of our investigations and can assist with implementing remedial actions.
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In this pandemic era, global companies have been challenged to maintain a reliable and effective internal investigation program. Companies have relied on remote investigation strategies to collect and review documents and conduct interviews. In conducting remote investigations, companies have to ensure that they follow investigation requirements, maintain the confidentiality of the process, and comply with applicable data privacy rules and security requirements.
In this webinar, Jessica Sanderson, Partner at The Volkov Law Group, and Jonathan T. Marks, Partner| Leader of the Global Forensic Investigation, COmpliance & Integrity Practice at Baker Tilly, will discuss best practices for conducting remote internal investigations. They will outline strategies for collecting and reviewing documents, analyzing financial data, and conducting interviews using remote technologies.
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In 2019 and 2020, the federal government released significant information which directly impacted compliance professionals. We cover all three releases in this eBook, the 2020 Evaluation of Corporate Compliance Programs – Guidance Document, the 2019 Framework for OFAC Compliance Commitments, and the 2019 Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.
These three documents provided not only the government’s refreshed thinking on what constitutes a best practices compliance program. I have combined all three onto a best practices document.
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