Category Archives: To report

Sniff test

What happens to compliance when the CEO and her boyfriend collaborate to create a culture of secrecy and fear?

“Partners in Blood,” The Wall Street Journal, May 19, 2018 C1.  Reports from the trenches at Theranos, which said it was able to run a range of tests from a few drops of blood; it couldn’t.  SEC charges company with fraud, and investors lose millions.

While the implications of a relationship of the CEO goes to Governance, are there also links to Compliance and Information?  What impact did the culture have on the company’s compliance?  How do investors know about the nature of a CEO’s personal relationships leaking into the corporate environment?

Who should have seen this and reported it to someone?  Why didn’t the directors smell a rat?


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Filed under Board, Compliance, Culture, Culture, Directors, Duty, Employees, Governance, Oversight, Oversight, Risk, Supervision, To report

Catching up

  1. Bad employees are bad

    “Suspect In Massive CIA Leak Identified,” The Wall Street Journal, May 16, 2018 A2. Did a former employee leak CIA hacking tools?  How do you protect yourself from former employees leaking your information?

  2. Does this displace doctors?

    “New Methods Aim to Speed Stroke Care,” The Wall Street Journal, May 15, 2018 A3. Algorithms compare a patient’s brain scans against a database, allowing quicker diagnosis and treatment, even by non-experts.  Is this closer to using AI to practice medicine?  Is this using information better, faster, and, hopefully, cheaper?

  3. Failure to use information

    “Paris Attacker Was Flagged as Risk,” The Wall Street Journal, May 14, 2018 A8.  Attacker in Paris was in the database, but nevertheless was able to kill.

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Filed under Access, Analytics, Controls, Corporation, Duty, Employees, Governance, Government, Information, Internal controls, Oversight, Protect assets, To report, Use, Value

What does a lawyer do if the client ignores his advice?

The CEO arranged to hire one of his buddies for a senior job with the company.  Someone ( employees? a shareholder?) sent a letter to a member of the Board complaining about the hiring.  The CEO asked Security to find out who wrote the letter, despite being told by Compliance and the General Counsel not to.  He persisted.

“Barclays CEO Hit With Penalties of $1.5 Million,” The Wall Street Journal, May 12, 2018 B1.  UK regulators fined him nearly $870,000 for a ”serious error of judgment.'”

What does it say about a company when the CEO doesn’t listen to the company’s General Counsel or Compliance department?  Is this a governance problem, a compliance problem, or an HR problem?  Costs the shareholders about the same.  And did either the General Counsel or Compliance advise the Board that the C?  What happened to them?

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Filed under Communications, Compliance, Compliance (General), Controls, Corporation, Culture, Duty, Employees, Governance, Internal controls, Lawyers, Oversight, Supervision, To report

To the surprise of no one

“Wells Kept Client’s Fund Fee Rebates,” The Wall Street Journal, May 10, 2018 B1.  Wells Fargo apparently failed to pass on fee rebates that Wells Fargo had received for a pension fund for which Wells Fargo acted as a trustee.

Whether it’s a process issue or a culture issue, lack of supervision, general incompetence, or a way of doing business, is anyone surprised?  Is it only at one pension fund?  Who knows?

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Filed under Accuracy, Compliance, Compliance (General), Controls, Corporation, Culture, Duty, Governance, Internal controls, Oversight, Supervision, Third parties, To report, Vendors

Undisclosed information

When useful information is known but not disclosed to the decision makers, the information can’t be acted on.  The person deciding not to disclose bears some accountability.

But if the information is disclosed to the decision makers, but they don’t act on it, it is the decision makers who bear the accountability.

“Church Shooter Was Ticking Bomb,” The Wall Street Journal, May 8, 2018 A6. The church shooter in Sutherland Springs, Texas, made a video confession five years earlier.

He held a handgun to his wife’s head in 2012.  The video confession was disclosed in his court martial in 2012.  He was convicted of domestic violence, but the Air Force failed to pass that on to the FBI database, which would affect his ability to buy guns.  His superior was convinced the shooter was dangerous and likely to harm someone.  The shooter was put into a mental hospital, but escaped.

How many people knew about the shooter’s tendencies but didn’t report it to the proper authorities?  How many proper authorities failed to fulfill their duties?  Twenty-six people died.

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Another ½ billion

This may appear to be more a straight compliance piece than an information governance piece, but consider that the officers and directors didn’t know or didn’t report things that they should have known about.  Truth or consequences?

“Wells Fargo Reaches Settlement In Lawsuit,” The Wall Street Journal, May 5, 2018 B10. Tentative settlement in suit alleging certain “current and former officers and directors of the bank had made false statements” affecting the stock price between 2014 and 2016.

The final paragraph of the article says,

The bank said Friday that it “denies the claims and allegations in the action and entered into the agreement in principle to avoid the cost and disruption of further litigation.”

One pauses to wonder if the current shareholders agree, it being their $480 million being spent to resolve the lawsuit, not the $480 million of said certain current and former officers and directors.  This is on top of the $1 billion fine paid last month.  Hopefully, the current and former shareholders will get some of the $480 million, less legal fees.

Telling fibs in connection with a company’s stock price can be real expensive for some one.  Not knowing about abusive sales practices is about the same as lying.  And how can you deny something yet still pay $480 million?  Who are they trying to fool this time?  At least now they can post nice ads on TV, claiming a re-invention.  Has the culture problem been fixed?

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Filed under Board, Compliance, Compliance, Controls, Corporation, Directors, Duty, Duty of Care, Employees, Governance, Inform market, Inform shareholders, Information, Internal controls, Investor relations, Oversight, Oversight, Protect, Supervision, To report, Value

A handful for May Day

A departure from the one-story-one-post approach.

  1. “Israel Targets Iran Accord,” The Wall Street Journal, May 1, 2018 A1. Israel releases Iranian documents about a nuclear weapons program found in an abandoned warehouse. At least two themes: (a) What does information mean? Did Iran lie during negotiations? (b) Do you destroy documents/information that are/is no longer useful to you?  What does it say when you don’t?
  2. “‘Fake News’ Law Snares an Offender,” The Wall Street Journal, May 1, 2018 A16. A visitor to Malaysia convicted and sentenced for publishing “fake news” about how quickly/slowly emergency services responded to a shooting. Interesting that the first conviction under the new law was of a foreigner.
  3. “Banks Draw Bead on Guns,” The Wall Street Journal, May 1, 2018 B1. Banks and credit card companies discuss tracking your purchases of guns.  What will they do with that information? Is there other information they can deduce from your purchases that someone would like to track? Would your health insurer/doctor like to track your food and alcohol purchases?  Whose information is that, anyway?
  4. “Guilty Verdict in Autonomy Case,” The Wall Street Journal, May 1, B2.  Former CFO of Autonomy convicted of fraud in connection with the sale of Autonomy to HP for $11 billion in 2011.  This was not some lower-level accountant accused of misstating aspects of a tax-motivated deal. Instead, the fraud overstated Autonomy’s revenue and generally misstating financial results.  The former CEO has also been sued in the UK for damages.
  5. “Facebook Shares the Shared,” The Wall Street Journal, May 1, 2018 B5. Now you can download any of 25 categories of the information that Facebook keeps on you.  Your search history.  When you liked or didn’t like something.  Which and how many advertisers have your contact information.  How many categories does Facebook have?  We don’t know.

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Filed under Access, Accuracy, Analytics, Communications, Compliance, Compliance (General), Controls, Corporation, Data quality, Definition, Duty, Duty of Care, Employees, Governance, Information, Internal controls, Oversight, Oversight, Ownership, Ownership, Privacy, Protect assets, Protect information assets, Technology, To report, Value