“Former Goldman Bankers Charged,” The Wall Street Journal, November 2, 2018 A1. “Two senior … bankers allegedly paid bribes and stole and laundered money … [in] one of the biggest financial frauds in history.”
What does it say when two of your 435 partners and one of your managing directors commits a fraud? Failures in systems/controls? Bad culture? Do you have a “cowboy atmosphere” in Asia? Poor training? Are these rogue employees? What’s the impact on your reputation? What was the tone at the top?
This is primarily a Governance point. How will the new CEO handle?
Filed under Compliance, Compliance (General), Controls, Corporation, Culture, Directors, Duty, Duty of Care, Employees, Governance, Oversight, Policy, Supervision, Who is in charge?
“Market Cheats Get Caught More Often,” The Wall Street Journal, November 1, 2018 B10. Traders manipulating prices by spoofing real futures trades are getting caught and prosecuted for criminal violations. Exchanges cooperating with enforcement authorities.
If accurate information is worth X, what is inaccurate information worth? It depends, whether you are buying or selling based on it.
So, this is both Information (information includes both accurate and inaccurate information) and Governance (manipulating market trades with false information is a crime that the CFTC and DOJ prosecute).
Filed under Accuracy, Compliance, Compliance (General), Controls, Corporation, Data quality, Definition, Duty, Duty of Care, Employees, Governance, Information, Oversight
At common law, an employee has a duty
- to comply with applicable laws in the performance of his/her work for the employer
- to comply with his/her employers reasonable instructions in the performance of that work, and
- to report material information to his superiors.
“Credit Union Staff Faults Safeguards Against Laundering,” The Wall Street Journal, October 31, 2018 B12. Employees raised concerns in 2017 about the anti-money laundering program at the credit union where they worked. The chief audit executive dismissed the allegations.
Were these employees rewarded for raising these concerns? No. Did the company make changes? The company says it did. Will other employees raise concerns in the future?
How seriously do you take concerns raised by your employees, who are closest to the facts? Is this a Compliance point or a Governance point? Or an Information point (in that Management received information and apparently didn’t use it)?
Filed under Compliance, Compliance (General), Controls, Culture, Duty, Employees, Governance, Information, Internal controls, Oversight, Third parties, To report, Use
“Barnes & Noble Details CEO Firing,” The Wall Street Journal, October 31, 2018 B1. CEO allegedly fired for sexual harassment and bullying, and interfering with the sale of B&N.
So, the CEO gets canned. No severance package. What message does this send to the rest of the organization (and, indeed, to other CEOs and other companies)? How does the Board look on this one? From a Compliance standpoint, and a Governance one, looks pretty good.
Might this be a pretext? Could he have been fired for some other reason?
Filed under Board, Communications, Compliance, Compliance, Compliance (General), Controls, Corporation, Duty, Employees, Governance, Internal controls, Oversight, Supervision
One of the consequences of non-compliance is a higher level of scrutiny from the regulators.
“Wells Fargo Places Two Executives On Leave,” The Wall Street Journal, October 25, 2018 B10. The Comptroller of the Currency sent letters to two WF executives about their failures of oversight at the bank in connection with WF’s sales practices. Execs (chief administrative officer and chief auditor) placed on leave and removed from operating committee.
Boy, does that ever not look good on your resume.
Why did the regulator have to do this? One reason is that WF didn’t do it itself. Would your compliance system do better? Do the directors still have their jobs?
Filed under Board, Compliance, Compliance (General), Corporation, Culture, Directors, Duty, Employees, Governance, Government, Oversight, Supervision, To report
“Uber’s Top Deal Maker Quits After Conduct Claims,” The Wall Street Journal, October 23, 2018 B3. Senior executive (48) resigns after allegations of sexual misconduct. Also alleged to have violated company policy with a consensual affair with a colleague.
See also https://infogovnuggets.com/2018/10/15/enforcement/ for an earlier nugget on this point.
So, a higher-up gets the heave-ho after bad conduct. I guess the Compliance program has teeth. But it did take a long time. Firing (or moving aside) a high-producer shows a company’s commitment, even at a company with a bad history. Did he get a package? Multiple messages here.
“Treasury Employee Is Accused of Leaks,” The Wall Street Journal, October 18, 2018 A4. Employee arrested for allegedly disclosing confidential banking information about Paul Manafort, among others, to a reporter at BuzzFeed.
Leaking your employer’s information is hazardous to your health and freedom. But it’s good to know the government takes compliance seriously.
Filed under Compliance, Compliance (General), Controls, Duty, Duty of Care, Employees, Governance, Government, Internal controls, Oversight, Policy, Protect assets