Category Archives: Lawyers

After a Whistleblower

“Whistleblower Alert Scrutinized,” The Wall Street Journal, November 24, 2017 B6.  A year ago, the CEO gets a letter from an employee saying the company is committing fraud by overstating some metrics.  Investors are later told the allegations are without merit, and invest $500 million.  Now the investors are suing.  We’re told that that suit is without merit, even though it looks like some metrics were overstated.

How do you handle continuing to operate your business after a whistleblower puts you on notice of potential wrongdoing?  What audiences do you need to communicate with?  Shareholders, government regulators, lenders, employees, others?  What can you say without stumbling over an inconvenient truth or two?

 

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Filed under Accuracy, Board, Communications, Compliance, Compliance, Corporation, Data quality, Directors, Duty, Duty of Care, Employees, Governance, Inform market, Inform shareholders, Investor relations, Lawyers, Protect assets, To report

Equifax, continued

“Equifax Clears Four Executives,” The Wall Street Journal, November 4, 2017 B8.  Apparently, the senior execs didn’t know about the hack of 145.4 million accounts that was allegedly discovered only three days before they sold stock.

How do you prove what you didn’t know?  How does the lawyer approving the sales know what they knew?  Someone in the company knew about the hack.  Doesn’t that knowledge get imputed to all the senior execs?

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Filed under Access, Compliance, Controls, Corporation, Duty, Employees, Governance, Internal controls, Lawyers

Military justice

A new oxymoron.

A Brigadier General in charge defending the accused at Guantanamo was arrested on the order of a military judge.  The General’s crime: allowing other civilian defense attorneys to resign after it was discovered the Government had bugged the room where the attorneys met with their clients.

“Gitmo General Is Released,” The Wall Street Journal, November 4, 2017 A5.

But Bergdahl walks?

Do military judges have more power than either they think they have or that they should?  How do you govern without reliable enforcement?

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Filed under Controls, Duty, Governance, Government, Lawyers

Catching up

I was working on another project, and could not do my postings as timely as I would like.  But here’s a bunch of news items I wanted to write about:

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Filed under Compliance, Compliance, Controls, Corporation, Directors, Duty, Duty of Care, Employees, Governance, Lawyers, Oversight, Ownership, Privacy, Third parties, Uncategorized

The Day that Information Governance Died, the Sequel

Last July, after the July 5 new conference, I wrote about the consequences of James Comey’s decision not to prosecute, https://infogovnuggets.com/2016/07/12/sounds-of-silence/.  I view that as The Day Information Governance Died.

This week, we had the sequel.

If you create a document in the normal course of your duties for your employer, about a conversation held in the course of your employer’s business, using the employer’s computer, then that document is the property of your employer.  It’s “proprietary.”  You can’t take that document with you when you’re fired and then give it to others.  Even if it doesn’t contain privileged information.  Or your purported recollections of a conversation in your official capacity with the President, subject to executive privilege.

But Mr. Comey seems to be above (or maybe beside) the Law, generally.  And he is (until the ethics people get a hold of this) a lawyer.

“The ‘Close Friend’ Behind Memo Leak,” The Wall Street Journal, June 9, 2017 A4.   Comey leaks a memo he wrote while a government employee to a friend, in order to leak it to the press.

And we wonder why we have a hard time getting traction on information governance.

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Filed under Controls, Duty, Employees, Information, Internal controls, Lawyers, Ownership, Privilege, Third parties

About time

Part of governance is punishing someone who violates the rules.  Good, though, to have some temporal connection between the violation and the punishment.

“U.S. Plans Charges In Breach At Yahoo,” The Wall Street Journal, March 15, 2017 B1.  Move comes after 2014 breach at Yahoo that exposed 500 million users in late 2014, after the larger breach in 2013 exposing twice as many accounts.  Huge impact on the users and the shareholders.

The company’s lawyer resigned and the CEO lost her cash bonus.  Have the directors at the time been penalized at all? They missed this, too.

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Filed under Board, Controls, Directors, Duty, Employees, Governance, IT, Lawyers, Oversight, Oversight, Protect assets, Protect information assets, Security

Bio-Rad

Normally, I tie to an article in The Wall Street Journal, but couldn’t find this news items there.  Today’s post is based on an article yesterday from Corporate Counsel.

The former General Counsel of Bio-Rad Laboratories in California got fired in 2013, soon after he reported to the company’s audit committee on possible FCPA violations.  He claimed whistleblower protections under Sarbanes Oxley.

Jury finds for plaintiff; $5.8 million in back pay and $5 million punitive damages.  Company had already paid $55 million to settle FCPA allegations.

Interesting implications for compliance, audit committees, whistleblowing, and attorney-client privilege.

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Filed under Board, Compliance, Compliance, Corporation, Duty, Employees, Governance, Lawyers, Legal, Privilege, To report