Monthly Archives: April 2014

Is a fish a tangible object?

One of the drivers of some aspects of information governance is 18 USC 1519, a provision of the Federal criminal law dealing with obstruction of justice. The provision was added by Sarbanes Oxley.

A fisherman gets prosecuted under this law and his conviction turns upon whether his disposal of a fish equaled the destruction of a document or other tangible object to influence a matter within the jurisdiction of an agency of the US government.

Is this what Congress either said or meant?

“Prosecutors Used Sarbanes-Oxley to Hook a Fisherman,” Wall Street Journal, April 28, 2014, online. http://on.wsj.com/1ivuPC8

Had it been a gun, an easier question. But a living or dead animal?

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Filed under Compliance, Definition, Risk

The problem with problems

One of the problems with problems is that once you have one, it’s hard to prevent multiplication.

Case in point. Barclays. After the rate rigging scandal, Barclays changed CEOs. Had some problems with the insurance products it offered. Then it linked broker compensation at its wealth advisory arm to compliance with law and policy. More recently, it paid a quarter of a billion dollars to settle Fannie Mae/Freddie Mac issues.

Yesterday, at the annual meeting, shareholders objected loudly at proposed increases in compensation and bonus.

Was inability to pay enough to attract staff a risk identified as arising from rate rigging?

This isn’t so much an information governance issue as it is a risk assessment one. What is the total, all-in cost of noncompliance?

“Barclays Gets an Earful Over Its Pay Practices,” Wall Street Journal, April 25, 2014 C3 http://on.wsj.com/1iTEzdX

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Filed under Compliance, Investor relations, Risk

It is what you know

Two articles from today’s Journal, but one topic.

“Flurry of Allergan Trades Preceded Bid,” and “Insider Cases’ Legal Basis Questioned, Wall Street Journal, April 23, 2014 C1  http://on.wsj.com/1gSgfVG, http://on.wsj.com/1l4bo8M

The first looks at the suspicious rise in volume of trades in Allergan prior to disclosure of a takeover bid.  Round up the usual suspects.  The second raises questions about the SEC’s theory in insider trading cases and whether not only must you know the information is ill-gotten, but you must also get that information in return for something.

So, how you got it matters more than the information.  Go figure.

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Filed under Compliance, Controls, Governance, Information, Internal controls, Legal, Ownership, Third parties, Uncategorized

Disappearing Dick Tracy watch/radio/heart monitor

I was tempted to return to a continuing story: PG&E and the San Bruno blast. They/it pled not guilty to felony criminal violation of safety rules (including not keeping records of the pipeline) in connection with the 2010 explosion in California. “PG&E Pleads Not Guilty,” Wall Street Journal, April 22, 2014 B2 http://on.wsj.com/1idccbQ

Instead I choose to focus on “A Future Where Bionics Track Your Health,” Wall Street Journal, April 22, 2014 D2 http://on.wsj.com/1i9BCar. The doctor can tape on a sensor, or give you a contact lens, that allows him or her to continuously track your condition, wirelessly. Some sensors can be reabsorbed into the body. Medicines can be released remotely.

While this is interesting from the health standpoint, think about the additional zetabytes of information that this will generate. How will it be managed/controlled/stored/protected/used?

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Filed under Analytics, Business Case, Collect, Compliance, Controls, Internal controls, IT, Management, New Implications, Privacy, Protect, Security, Third parties, Use

Emoticons for plaintiff’s lawyers

Even the smartest guys in the room write dumb stuff. But give them emoticons in their email? Let the plaintiff’s lawyers rejoice (and order a new jet).

“Tech Giants Discussed Hiring, Say Documents,” Wall Street Journal, April 21, 2014 A1 http://on.wsj.com/1iEnXH6

For the non-lawyer, agreements between competitors on who to hire and who not to hire are troubling; may be an antitrust violation. So when the wigs in Silicon Valley discussed hiring, that’s an issue. But when Steve Jobs was told of a recruiter from Google who was fired for recruiting from Apple, Mr. Jobs forwarded the email with a smiley face. Let the lawsuits commence (or continue).

How do you control what people write? Why do they get dumber on a keyboard or a phone keyboard? Why are senior execs a bigger problem?

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Filed under Business Case, Communications, Compliance, Compliance, Content, Controls, Culture, Governance, Internal controls, Legal, Management, Risk

Swine flu

Were there a virus happening in the food chain, wouldn’t you want to know each time it happened, so you could track down the cause and limit further contagion?

The World Organization for Animal Health doesn’t track incidents of two pig viruses, one of which kills piglets (harmless to humans, it appears).  The USDA now requires hog farmers to report and track each incident.

“USDA to Require Pig-Virus Reports,” Wall Street Journal, April 19-20, 2014 A4 http://on.wsj.com/1i4J3tD

You can manage only that which you track.

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Filed under Board, Business Case, Collect, Communications, Controls, Governance, Inform market, Information, Knowledge Management, Management, Risk, Use, Value

Broker data again

Finra, the self-regulating industry association for stock brokers, is revisiting its system for confirming and reporting a broker’s record. Finra is going to cross-check their information against information in public court records, to supplement self-reporting by the brokers.

This follows a series of articles in the Wall Street Journal pointing out deficiencies in the Finra system. Congress is getting involved. One issue is whether results from required exams are posted (unlike doctors or lawyers). Finra recommends that investors look at their site (BrokerCheck) before investing.

“Plan to Fix Cracks in Broker Records,” Wall Street Journal, April 16, 2014 C1 http://on.wsj.com/Qp5N1j

Four perspectives. Finra’s. The brokers’s. The investors’s. The Journal’s.

I, for one, thought that people who got the highest score on the bar exam studied too hard. For me, it was pass/fail. But I wouldn’t begrudge someone who scored the highest from advertising that fact (the absolute scores were not available when I took the bar). I would, however, argue that maybe he or she might overwork a client’s file.

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Filed under Analytics, Collect, Duty of Care, Inform market, Inform shareholders, Information, Management, Ownership, Privacy, Use, Value