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    Mar. 29, 2023

DOJ’s Pilot Program on Clawbacks to Foster Individual Accountability Poses Challenges for Companies

The DOJ Criminal Division’s new pilot program on compensation incentives and clawbacks is intended both to increase personal accountability and inspire organizations to be more proactive in fostering compliance via compensation. The pilot is meant to “encourage companies who do not already factor compliance into compensation to retool their programs and get ahead of the curve,” said Deputy Attorney General Lisa Monaco when she announced the program in a speech on March 3. The three-year program, which became effective on March 15, requires companies to implement compliance-related criteria into their compensation and bonus systems when entering into criminal resolutions. The program also provides for possible fine reductions if corporations claw back compensation from culpable employees and those who had supervisory authority over them or who were “willfully blind” to the misconduct. Yet some defense counsel foresee potential roadblocks that might impede the pilot program’s effectiveness. See “2022 FCPA Year in Review: Clawbacks, Messaging Apps and More Enforcement to Come” (Dec. 21, 2022) and “Revised Monaco Memo Affects Compensation, Clawbacks and Monitorships” (Oct. 26, 2022).

Ericsson Pleads Guilty and Faces Other Consequences for Failing to Comply with 2019 DPA

Swedish-based multinational telecommunications company Ericsson has agreed to plead guilty to two charges originally deferred by a 2019 DPA: one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the internal controls and books and records provisions of the FCPA and to pay an additional criminal penalty of $206,728,848 which includes the elimination of any cooperation credit originally awarded by the DPA. Ericsson will also be required to serve a term of probation through June 2024 and has agreed to a one-year extension of the independent compliance monitor.  See “Lessons from Telecom Giant Ericsson’s Billion-Dollar Record-Setting Deal” (Jan. 8, 2020).

How the New DOJ and PNF Corporate Enforcement Guidelines Affect Self-Reporting, Cooperation and Remediation

The first two months of 2023 have seen considerable corporate enforcement guidance announcements in both the United States and France. The DOJ issued revised guidance governing voluntary disclosures, cooperation, remediation, and evaluation of compliance programs. And the French National Prosecutor Office similarly announced new guidelines on its corporate enforcement efforts and negotiated resolutions. In this guest article, Dan Kahn, a partner at Davis Polk, and Sophie Scemla, a partner at Gidde Loyrette Nouel, explain that though there are differences in the agencies’ approaches to corporate enforcement, these differences are becoming increasingly smaller, and the similarities are growing larger. They discuss how these changes are important for companies to consider as they determine whether and when to voluntarily-self disclose identified misconduct, and how to approach cooperation and remediation. See “Insiders Tsao, Soltes and Kahn Share Insights on Investigations” (Jan. 4, 2023).

SEC Sanctions Goldman Sachs for Failing to Follow ESG Policies and Procedures

Taking into account environmental, social and governance factors in the investment process involves certain unique challenges, including inconsistent terminology, disparate methodologies and insufficient data. Nevertheless, a fundamental compliance rule continues to hold true for advisers that venture into ESG territory: “Say what you do, and do what you say.” Goldman Sachs Asset Management, L.P. (GSAM) recently ran afoul of that dictate on both counts. In a recently settled enforcement proceeding, the SEC claimed that GSAM failed to adopt appropriate policies and procedures for governing certain ESG products. Moreover, after it did adopt ESG policies and procedures, it failed to follow them. “Today’s action reinforces that investment advisers must develop and adhere to their policies and procedures over their investment processes, including ESG research, to ensure investors receive the advisory services they would expect to receive from an ESG investment,” said Andrew Dean, Co-Chief of the Enforcement Division’s Asset Management Unit in the SEC’s press release. This article details the alleged compliance shortcomings and the terms of the settlement. See “No Longer a Slap on the Wrist: SEC Penalties and Sentences on the Rise” (Jan. 18, 2023).

Lessons From Hive Ransomware Multinational Takedown: Coordination and Defensive Priorities

infrastructure of one of the most prolific and extremely active ransomware groups, Hive, responsible for many ransomware attacks, including against hospitals. With access to Hive’s computer networks since last summer, the FBI obtained decryption keys for 336 victims across the globe, preventing them from paying $130 million worth of demanded extortion payments – evidence of its ability to provide substantial assistance to victims of cybercrimes. In this second installment of our two-part article series, with insights from legal and cybersecurity experts, we offer measures to prevent these attacks and discuss the importance of coordination with law enforcement, including how it worked in this instance. Part one discussed the history and tactics of Hive, the takedown and contributing factors to the decline in ransomware. See our two-part series on a ransomware tabletop’s 360-degree incident response view: “Days One to Four” (Feb. 1, 2022); and “Day Five Through Post-Mortem” (Feb. 15, 2023).

Most-Read Articles

Ion Analytics' Spotlight on Trailblazing Women

In honor of International Women’s Day, some of ION Analytics' editorial teams led by women interviewed notable women in the markets and industries we cover. In this part, Jill Abitbol and Rebecca Hughes Parker shone a spotlight on notable women in compliance and hedge fund, data privacy and cybersecurity, and anti-corruption law, including Amii Barnard-Bahn, Abigail Bell, Genna Garver, Jane Horvath, Barbara Li, Amy Mushahwar, Mara Senn and Carol Widger. The interviews are here.

Data, Culture, ESG and Scope Creep with GM's Michael Ortwein

Editor-in-Chief Rebecca Hughes Parker recently spoke with chief compliance officer and assistant general counsel at General Motors, Michael Ortwein, who shared his insights on top-of-mind issues in advance of his participation in this fall’s ACI FCPA Conference. 

The full video is here. The associated article is here.

Corporate Compliance and Enforcement Hot Topics With IBM VP Una Dean

Editor-in-Chief Rebecca Hughes Parker recently spoke with IBM's vice president and assistant general counsel of investigations Una Dean, who will be co-chairing ACI's FCPA conference this fall, about a range of hot compliance topics. 

The video is here

Quick Take on FARA

https://acuris.wistia.com/medias/wmb5vyeq2f

Global Editor-in-Chief Rebecca Hughes Parker discusses the Foreign Agents Registration Act (FARA) in this short video. For our three-part guide to FARA and the new risk environment, see here.

ACR Editor Discusses Using Artificial Intelligence to Support Anti-Corruption Compliance

Senior Editor Megan Zwiebel recently appeared on a podcast with Perkins Coie White Collar & Investigations partners Gina LaMonica and Caryn Trombino, who discussed the use of AI in compliance programs, including trends in AI-based compliance, steps companies can take to utilize AI in their compliance programs, and how regulators view the use of data and AI in compliance programs. Listen to the podcast here.

ACR Q3 Editorial Update

Listen to our Fall Editorial Update for a discussion of recent enforcement actions; enforcement trends and policies; and top-of-mind issues, such as internal investigations and hotlines, all in under 15 minutes. Register here.

ACR and CSLR Spring Update 2020

​​​​The Senior Editors of the Anti-Corruption Report and the Cybersecurity Law Report recently teamed up to present an update on the trends and hot topics in the anti-corruption, cybersecurity and data privacy spaces since the beginning of the year and what the publications will be focusing on in the coming months. A complimentary download of the webinar is available here.

Upcoming Webinar to Explore Best Practices for AML Compliance by Private Fund Managers

Please join our sister product, the Hedge Fund Law Report, on Thursday, May 30, 2019, at 11:00 a.m. EDT, for a complimentary webinar discussing the key components of a robust anti-money laundering program. To register for the webinar, click here.

ACR Webinar: The Art and Science of Transaction Monitoring: A Google Perspective

Transaction monitoring can help a company identify problem areas and assess how well its compliance program is working. Please join the Anti-Corruption Report for a complimentary webinar on May 2, 2019, from 1 p.m. to 2 p.m. EDT, where Senior Editor Megan Zwiebel will interview Google global ethics & compliance senior counsel Therese Lee and forensic program manager Aditya Yerramilli about how Google handles the art and science of transaction monitoring. Registration information is here.

ACR Webinar: Mitigating Risk in Argentina After the Notebooks Scandal

Doing business in a country that is embroiled in a mega-scandal can be treacherous. This is particularly true when the local business community is slow to get on the compliance bandwagon, as has been the case in Argentina while the Notebooks Scandal has been unfolding. Please join the Anti-Corruption Report on April 17, 2019, from 1:00 p.m. to 2:00 p.m. EDT for a complimentary webinar in which Editor-in-Chief Nicole Di Schino will discuss how to mitigate risk in light of the developing scandal with Argentinian attorney Guillermo Jorge, a partner at Bruchou, Fernandez Madero & Lombardi, and Barrick Gold’s Jonathan Drimmer. To register, please click here.