The Justice Department’s Antitrust Division has targeted collusion in labor markets for criminal prosecution. This was not unexpected. Indeed, the Antitrust Division gave plenty of warning to the high-tech industry and other companies that criminal prosecutions were on the horizon.DOJ handled initial prosecutions of labor market collusion in the high-tech sector by civil prosecutions and resolutions. Out of an abundance of caution, DOJ recognized that it wanted to provide “fair warning” of its intention. While it may not have been clear that the Sherman Act prohibition on cartel activity applied to labor markets, DOJ and the private sector should have realized that collusion, wage-fixing and agreements not to compete were illegal collusion agreements. It is hard (if not impossible) to identify procompetitive justifications for such blatant anti-competitive conduct. In this Episode, Michael Volkov outlines antitrust risks and compliance strategies to avoid DOJ enforcement actions in the labor market.

Corruption Crime & Compliance

Episode 210 -- HR and CCOs Watch Out!! DOJ Targets Aggressive Prosecutions in Labor Markets

In a pair of enforcement actions, OFAC settled two separate actions involving Schlumberger Limited subsidiaries – the first involving Cameron International Corporation, and the second, Schlumberger Rod Lift, Inc., a former subsidiary, that was acquired by Lufkin Rod Lift, Inc.In this Episode, MIchael Volkov reviews the two OFAC enforcement actions.

Episode 209 -- Schlumberger Settles Two OFAC Enforcement Actions

WPP, the Largest Global Advertising Group, Settles FCPA Charges with SEC for $19.2 Million. After a long hiatus, the SEC announced a settlement with WPP plc, the world’s largest advertising group, for FCPA violations in India, China, Brazil and Peru for $19.2 million. The SEC’s resolution charges WPP with violations of the anti-bribery, books and records and internal accounting controls provisions of the FCPA.In this Episode, Michael Volkov reviews the WPP SEC FCPA settlement.

Episode 208 -- A Deep Dive into the WPP FCPA SEC Settlement

An internal investigation is like reading a good novel. You begin the journey with a general expectation of what the novel or the “investigation” is about. As you learn more, the investigation gains momentum filled with moments of discovery, surprise and ultimately a basis for understanding.In some cases, the end of the story (e.g. an oil well explosion) or dramatic event is known. In others, for example, a hotline report of alleged misconduct is substantiated after a thorough investigation involving a slow but steady understanding of what occurred, who was involved and how the scheme was executed.In this Episode, Michael Volkov reviews the 5 common pitfalls in conducting an internal investigation.

Episode 207 -- 5 Common Pitfalls in Conducting Internal Investigations

The Department of Treasury's Office of Foreign Asset Control ("OFAC") continues to bring sanctions enforcement actions. At the same time, OFAC is reiterating the importance of sanctions compliance program. Building on its May 2019 Framework for Sanctions Compliance Program, OFAC is sticking to its word -- setting forth sanctions compliance program requirements and holding companies accountable for sanctions program violations.In this Episode, Michael Volkov reviews recent enforcement actions, expanded Belarus sanctions, and continuing compliance expectations.

Episode 206 -- Update on Sanctions Compliance and Enforcement

Chief compliance officers recognize the importance of conducting robust audits of their compliance programs. The audit process requires a delicate balance between qualitative and quantitative measures. As corporate compliance programs build data analytics and technological capabilities, CCOs have to tailor the audit program to incorporate data as an effective measure of a compliance program. In this Episode, Michael Volkov reviews strategies for conducting compliance program audits.

Episode 205 -- How to Audit a Compliance Program

The culture bandwagon is picking up steam.  Everyone is citing its organization’s “culture” as the foundation for its activities in the hope of meeting a rapidly evolving standard for organizations.  In its latest corporate compliance guidance, the Justice Department, along with numerous regulatory agencies continue to cite the importance of a company’s  “culture of compliance.” But when it comes to defining the terms, how to manage a company’s culture and how to measure, monitor and measure a company’s culture – everyone responds with a blank stare.  That is when we hear the Justice Potter Stewart famous definition of obscenity, “I know it when I see it.” To provide my own perspective on some of these issues, I am dedicating this podcast episode to corporate culture.  My answers may not be “correct” or even “persuasive,” but the dialogue has to begin.  I have long advocated for practical approaches to defining, managing and maintaining a company’s culture.  As I often write, culture is a company’s most important “internal control.”  

Episode 204 -- The Way Forward on Corporate Culture

LRN recently issued its second of three annual reports on ethics and compliance program effectiveness.  The second report focuses on board engagement with ethics and compliance and lessons learned from the COVID-19 pandemic. David Greenberg, a Special Advisor to LRN, joins us to discuss the interesting results of the LRN report.   The LRN report can be downloaded at https://lrn.com/  

Episode 203 -- David Greenberg on LRN’s Report on Corporate Boards and Compliance Program Engagement

In two separate enforcement actions, OFAC announced settlements with Alfa Laval Middle East Ltd., a Dubai, UAE company (AL Middle East), and Alfa Laval, Inc., a Virginia-based company (AL US) for violations of OFAC’s Iran Sanctions Program. AL US enlisted its then subsidiary (now operating unit), Alfa Laval Tank, Inc, based in Exton, Pennsylvania (AL Tank), to participate in the scheme. The Alfa Laval enforcement action underscores the dangers for global companies in compliance with US-based sanctions programs as part of global operations.  The parent company, Alfa Laval AB is based in Sweden (AL Sweden). AL Middle East agreed to pay OFAC $415,695, and AL US agreed to pay OFAC $16,875. In this Episode, MIchael Volkov reviews the OFAC enforcement action and points out interesting aspects and trends.

Episode 202 -- A Deep Dive into the Alfa Laval OFAC Enforcement Case

The False Claims Act is a powerful enforcement tool.  The Justice Department with its partner agencies are ramping up enforcement efforts.  The Biden DOJ is preparing to implement an aggressive FCA program across healthcare, defense industries and other government contractors. The False Claims Act stands as a major risk – businesses that depend on government business, including healthcare, defense and other contractors, have to address proactively the risks associated with False Claims Act liability.  Compounding this situation is an active and major whistleblower bar that generates qui tam relators needed to fuel Lengthy and costly government investigations. In this Episode, Mike Volkov reviews the flurry of recent False Claims Act cases brought by the Justice Department. 

Episode 201 -- DOJ Brings Flurry of False Claims Act Cases

The Justice Department and the Securities Exchange Commission are back in business.  The first corporate FCPA enforcement action in 2021 came after a six-month hiatus in 2021. The first case against a corporate entity in 2021 is an interesting one because it reflects a coordinated settlement not only between DOJ and the SEC but the U.K.’s Serious Fraud Office and Brazil’s Ministério Público Federal (MPF), the Controladoría-Geral da União (CGU) and the Advogado-Geral da União (AGU) in Brazil. Amec Foster Wheeler Energy, a subsidiary of the U.K. global engineering company, Wood Group, agreed to pay the United States $18.375 million to resolve criminal charges for bribery payments made in Brazil to win a $190 million contract to design a gas-to-chemicals facility.  Amec Foster entered into a three-year deferred prosecution agreement (DPA) in exchange for its payment of $18.375 million. In related settlements, Amec Foster agreed to pay the SEC approximately $22.7 million in disgorgement and prejudgment interest to the SEC to resolve FCPA charges.  The SEC agreed to offset up to $9.1 million paid to Brazil and $3.5 million to the SFO in the United Kingdom, leaving a minimum payment of approximately $10 million to the SEC. In this Episode, Michael Volkov reviews the Foster Wheeler FCPA enforcement action.

Episode 200 -- The Foster Wheeler FCPA Enforcement Action

Under Armour settled its long-pending SEC investigation by agreeing to pay $9 million surrounding misleading statements and practices relating to its revenue growth and uncertainties as to future growth. As part of the settlement, the SEC declined to bring charges against its CEO, Kevin Plank, and its CFO, David Bergman. The Justice Department inquiry appears to have lost steam since the middle of last year, and DOJ likely declined prosecution. Under Armour had been the subject of a long-running probe since 2019 when Under Armour disclosed the DOJ and SEC investigations into its accounting practices. The SEC’s case eventually focused on its revenue projections and accounting practices. In this Episode, Jonathan Marks from Baker Tilly and Michael Volkov discuss the Under Armour case and financial accounting fraud.

Episode 199 -- Jonathan Marks, Baker Tilly, and Michael Volkov Discuss Accounting Fraud, Revenue Recognition and the Under Armour SEC Case

In a far-reaching action, the Biden Administration elevated the global fight against corruption as a national security interest.  In an Executive Memorandum, the Biden Administration made a strong statement against corruption, citing the devastating impact that corruption has on democratic institutions, democratic governments, economic development, and other public interest objectives.  The Administration launched a robust inter-agency review of the anti-corruption battle, including increased international cooperation, anti-money laundering enforcement, increased support of the Anti-Kleptocracy Initiative, and increased focus on beneficial ownership. In this Episode, Michael Volkov reviews the Biden Administration anti-corruption initiative.

Episode 198 -- The Biden Administration Announces Anti-Corruption Battle as a National Security Interest

LRN and NAVEX Global recently released two important annual surveys.  LRN issues a yearly report on ethics and compliance program effectiveness.  NAVEX Global issues an important annual report on incident management trends based on its large database of hotline data. In this Episode, Michael Volkov review these two reports and the important ethics and compliance trends. The NAVEX Global report can be downloaded here. The LRN survey is here.

Episode 197 -- Review of LRN and NAVEX Global Compliance Surveys

The ransomware attack on Colonial Pipeline demonstrated yet again the failure of government and business to anticipate cybersecurity issues through traditional tools – risk and vulnerability analysis, implementation of technology and planning to minimize a cyber event, and crisis response protocol.  In the aftermath of this debacle, the public lined up to purchase gallons of gasoline because of a short-term shortage in gasoline.  These scenes of panic were a reminder of the impact that poor government and business risk management can have on public reaction. The Biden Administration issued a response quickly to update the government’s cybersecurity practices.  Federal agencies were directed to take a variety of actions to share information, strengthen cybersecurity practice and use new technologies to reduce cyber vulnerabilities. All of that is well and good but until the private sector is subject to various requirements relating to cybersecurity, not much is going to change. For example, there still is no actual federal corporate disclosure requirement to notify law enforcement and the public after a company suffers a cyber-attack or suffers a cyber incident.  Similarly, there are no specific standards set for any industry sector that companies must meet to protect against cyber-attacks. Companies and corporate boards have to address the cyber risk situation.  To do so, careful planning, assessments and coordinated strategies have to be designed and implemented. 

Episode 196 -- Managing Cybersecurity Risks

Michael Volkov tackles the current and hot topics in the legal realms of corruption, crime, and compliance.

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Corruption Crime & Compliance

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