Reliance

“U.S. Prosecutors to Weigh Criminal Case for McCabe,” The Wall Street Journal, April 20, 2018 A1. The DOJ Inspector General referred the case/matter of former FBI Deputy Director for criminal prosecution over his responses to investigators looking into leaks.

What does it say about the culture of an organization when two of its top officers, both of whom are lawyers, may have lied to federal investigators?  And what if that organization’s mission is the investigation of crimes?

How much do we rely on institutions and professionals to provide governance and to stand as examples of compliance?  Is that reliance justified?

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Filed under Compliance, Compliance (General), Controls, Culture, Duty, Employees, Governance, Government, Lawyers, Legal, Requirements

Porsche raid

“Porsche Executive is Arrested,” The Wall Street Journal, April 21, 2018 B6.

In continuing fallout from the VW emissions cheating scandal, a senior Porsche executive (head of engine development) was arrested by German police and several offices and factories were raided.  A member of the Porsche board is also under investigation.

Fooling the emissions tests was not a great idea.

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Filed under Board, Compliance, Compliance, Compliance (General), Corporation, Directors, Duty, Employees, Governance

Early warning

“SunTrust Sees Risk of Breach,” The Wall Street Journal, April 21, 2018 B3.  A SunTrust employee may have stolen information (names, addresses, account balances, and phone numbers) on 1.5 million customers.

The bank became aware of a problem in February, but only recently became aware that the (now-former) employee was trying to share the information outside the bank.

Good for the bank to have systems that notice the unusual activity and for the bank to have given relatively early notice.

 

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Filed under Communications, Controls, Corporation, Duty, Employees, Governance, Internal controls, Oversight, Privacy, Protect assets, To report

Phone companies can’t conspire, can they?

“Probe Focuses on Cellphone IDs,” The Wall Street Journal, April 21, 2018 B1.  DOJ investigates.

Are phone companies (and a standard-setting company) conspiring to make it harder for you to keep your phone number if you change carriers?  Or are they trying to make phones smaller?

Is your phone number information?  If so, to whom does it belong?  Is this just about whether you have to remove the SIM card to change carriers?

Just asking.

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Filed under Information, Ownership, Definition, Interconnections, Controls, Internal controls, Access

Going back to law school

“Comey’s Handling of Memos Is Investigated,” The Wall Street Journal, April 21, 2018 A1.

Apparently, the former head of the FBI (and a lawyer) considers memos he wrote in the course of his employment, about a meeting with his boss in his capacity as an employee, on his employer’s computers, to be personal documents, rather than government documents.  I don’t think he learned that at the University of Chicago’s Law School.

Forget, for the moment, whether these contained classified information, the leaking of which would be a crime a well as a violation of the duty of an employee.  He decided to transfer these memos to an outside party (a law professor!), so that they would be leaked to the press.  Another crime if classified information was involved.  But the law professor just became a member of a conspiracy involving the theft of government property.

But think about it from the employer’s point of view.  Didn’t Mr. Comey just convert an employer asset into a personal asset?  Allegedly, he created these contemporaneously as a business record.  Business records belong to the business.

I (another lawyer, mind you) take the view that everything an employee receives or creates in his or her role as an employee is the property of his/her employer.  How could a government employee decide to release them to the media in his/her role “‘as a private citizen.'”  Does this mean an employee of your company can decide on their own to broadcast your trade secrets, not as an employee, but as a private citizen?

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Filed under Compliance (General), Controls, Duty, Employees, Government, Information, Internal controls, Lawyers, Ownership

Costly

Wells Nears $1 Billion Settlement,” The Wall Street Journal, April 20, 2018 B1.

Wells Fargo is about to be (has been) fined close to $1 billion for irregularities regarding auto loans, auto insurance,  and mortgage loans.  This is the civil side.  This is in addition to the $185 million for the account cramming scandal in 2016, where the bank opened new accounts and credit cards that consumers did not request.  The Chief Risk Officer is also retiring.

Once again, the shareholders pay mightily for the sins of (mis-)management.

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Filed under Compliance (General), Culture, Governance, Risk, Risk assessment, Supervision

Turn-about

For years, securing access to information stored in Europe to support discovery for civil litigation in the US has been, to say the least, problematic.  Changes are afoot, for criminal matters, anyway.

“EU Calls for Access To Foreign Servers,” The Wall Street Journal, April 18, 2018 A7. “National law enforcement” should be allowed access on tech companies’ servers in both the EU and the US “to speed cross-border criminal inquiries.”

So, it looks like those pesky privacy laws won’t slow down law enforcement.  But weren’t those laws enacted in reaction to just such “national law enforcement inquiries”?  Does this mean we don’t have to go through the Hague Convention processes?

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Filed under Privacy, Controls, Access