Category Archives: Compliance

Three returning contestants

And all on the same page.

  1. “U.S. Indicts VW’s Former CEO,” The Wall Street Journal, May 4, 2018 B1. Former CEO indicted in March for conspiracy and wire fraud following the emissions cheating scandal.  Do CEOs go to jail?
  2. “Facebook Has Dual Standard On Privacy,” The Wall Street Journal, May 4, 2018 B1. If you’re in a special group in Facebook, you get an alert if someone accesses your profile; if you’re a muggle, or don’t work at Facebook, you don’t.  Maybe this will change?
  3. “Theranos Hurt Big-Name Investors,” The Wall Street Journal, May 4, 2018 B1.  Company said it had the technology to do a wide range of blood tests based on a few drops of blood.  It didn’t, and a host of big-name investors lost a bundle. Is this a governance issue, an information issue, or a compliance issue?  Don’t believe everything you hear; it’s costly.  And don’t serve as a director without doing your own due diligence.
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Filed under Access, Accuracy, Board, Compliance, Compliance, Compliance, Controls, Corporation, Culture, Data quality, Duty, Duty of Care, Employees, Governance, Internal controls, Oversight, Oversight, Policy, Protect information assets, Supervision

Ethics

When you need to hide relevant information from your clients, you are often doing something that’s not ethical.

“BofA to Pay Fine Over ‘Marking’ of Trades,” The Wall Street Journal, March 24, 2018 B10.  Bank hid the fact that it was routing its clients’ trades through high-speed trading firms.  Millions of times.  Apparently, the scheme was well known by bank employees, and was to hide the bank’s practices from major clients who would have objected.  And they did it anyway.  Cost: $42 million fine, and a loss of a lot of face.

You’d think a bank would have a policy or maybe even a culture against lying, cheating, or stealing.  Who’s getting fired?

 

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Who are your employees, anyway?

“Firm Settles Russia Probe,” The Wall Street Journal, December 12, 2017 A5.  Company working on US defense projects had Russian employees who lacked appropriate security clearances (and who stored some material on servers in Russia).

No fine reported; company to institute new security protocols and thereby resolve criminal complaint.

One would have thought someone would have gotten more than their hands slapped over this one.

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Covert units

It’s a bad sign when you establish a covert unit.

“Uber Formed Covert Unit to Steal Trade Secrets, Ex-Employee Says,” The Wall Street Journal, November 29, 2017 A1. According to a former security employee, Uber “had a team dedicated to stealing [competitors’] trade secrets and helped employees dodge regulators’ scrutiny.”

This information was in a letter read to the jury in the Alphabet/Uber trade secret litigation.  Ouch.

What does it say about the company’s commitment to compliance with law (including the rights of others)?  Are RICO charges far behind?

If Uber loses the case, will shareholders sue the directors who allowed this to happen?

 

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Violating company policy

Who gets fired for violating company policy?  How often is it a senior executive?

“Visa Cites Behavior In Firing Executive,” The Wall Street Journal, December 4, 2017 B3.  We don’t know what the violation was.  Yet.  But he was a high-flyer, handling the Apple and PayPal partnerships.

Does this send a message to the rest of the organization?  Does it depend on the policy he violated?

Does your company publish information on how many people have been disciplined for violations?  If not, why not?

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Wells Fargo, continued

“Wells Fargo Fires A Top Official, The Wall Street Journal, November 18, 2017 B1. Head of commercial lending canned because he said bad things to a fellow employee about regulators (and how they were affecting golden parachute payments) .

Think about that.  He didn’t write it down; he just said it.  Not outside the company, even.

True, his firing may have been expedited by all the other legal issues Wells Fargo has been having.  But he may not have gotten much of a parachute.

Information controls apply to unwritten information, too.

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Nissan, too

“Nissan Report Faults Management,” The Wall Street Journal, November 18, 2017 B3. Factory workers falsified inspection data.  Nissan recalls 1.2 million vehicles.  Did management press too hard when setting targets?

Everyone on the manufacturing floor knew the inspections were being done by under-qualified workers, and hid it from the inspectors.  Management was clueless.  Practice was the norm for nearly 30 years.

Would your culture allow this to happen in your company?

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