When the Criminal Becomes a Compliance Leader
May 8, 2008 | Filed Under Criminal Liability, Compliance
The Financial Times management blog notes a different twist on the “do as I say, not as I do” bromide:
Students at Canada’s Richard Ivey School of Business will have an unusual guest speaker on Thursday: Nick Leeson, the rogue trader who served four years in prison after bringing down Barings Bank. Mr. Leeson will aid the students in a case study analysing the bank’s collapse, while giving tips on the safeguards needed to prevent similar debacles. Afterwards, the students will take part in the “Ivey Ring Tradition Ceremony”, in which they pledge “to act ethically and honestly in all their activities”.
The school’s press release touts the benefits of business-barons-to-be of listening to Mr. Leeson:
For future business leaders, it’s important not to just focus on success, but to also hear how people get themselves into trouble. Mr. Leeson will also highlight the importance for all businesses of integrating financial oversight into an enterprise-wide system that supports and promotes ethical behaviour.
Having a criminal lead a compliance case study is one way to teach a lesson; part of the message here could be that crime does pay eventually, as Mr. Leeson gets $15,000 or so for talks such as this.
It’s not clear whether Mr. Leeson will hand out the Ivey Rings; we have obtained closed-circuit camera footage of the ring Mr. Leeson wore around the time of the Barings collapse:
Sacre Bleu!
January 25, 2008 | Filed Under Criminal Liability, Compliance
$7 billion buys a lot of compliance training and even more monitoring technology, n’est pas?
Here’s a slide to put in the deck:
And who says life doesn’t imitate art?
Jerome Kerviel, Societe Generale, 2008
Bud Fox, Wall Street, 1987
One Way to Deal With Corruption
May 29, 2007 | Filed Under Criminal Liability, In the News
The New York Times reports that China’s former top food and drug regulator has been found guilty of accepting bribes.
The sentence: death.
While possibly intended to signal how seriously the Chinese government takes the problem of adulterated food or counterfeit drugs, it may send a mixed message to the global marketplace.
Chiquita and Columbia
March 20, 2007 | Filed Under Criminal Liability, Compliance
Chiquita Brands announced last week an agreement with the US Department of Justice regarding “protection payments” made in Columbia by a former subsidiary:
In 2003, Chiquita voluntarily disclosed to the Department of Justice that its former banana-producing subsidiary had been forced to make payments to right- and left-wing paramilitary groups in Colombia to protect the lives of its employees. The company made this disclosure shortly after senior management became aware that these groups had been designated as foreign terrorist organizations under a U.S. statute that makes it a crime to make payments to such organizations. Since voluntarily disclosing this information, Chiquita has continued to cooperate with the DOJ’s investigation.
The DOJ’s press release is here, and reads a bit like a Tom Clancy novel. The bottome line for Chiquita, according to the DOJ:
Chiquita pleaded guilty pursuant to a written plea agreement. Under the terms of the plea agreement, Chiquita’s sentence will include a $25 million criminal fine, the requirement to implement and maintain an effective compliance and ethics program, and five years’ probation. Chiquita also has agreed to cooperate in this ongoing investigation. Sentencing will occur on June 1, 2007.
While the DOJ has admitted that this matter is “complicated” that apparently did not prevent the prosecution. You get the sense that the full story has not emerged; Chiquita maintains that it was motivated to ensure the safety of its employees. The DOJ’s press release repeatedly mentions that Chiquita had advice of counsel that these payments were illegal under American law.
There is even a report that Columbia may seek to extradite certain Chiquita officials. A few days prior to the announcement of the plea agreement, Chiquita appointed a new compliance officer.
Another Skirmish in the Privilege Wars
March 8, 2007 | Filed Under Privilege, Criminal Liability, Investigations
There’s some action in Washington today on the corporate attorney-client privilege front.
As reported in the New Tork Times, the House Judiciary Committee will hold a hearing on the subject (further info is here).
Two former prosecutors, now in private practice, provided written testimony and will testify that the McNulty Memoradum may not go far enough:
But Andrew Weissmann, who oversaw the prosecution of Enron and is now a partner at Jenner & Block, wrote the panel that the McNulty memorandum “leaves completely intact the government’s ability to penalize a company that does not take punitive action against employees for asserting a constitutional right to remain silent, and reward those companies that do take such action.”
Another former federal prosecutor, William M. Sullivan Jr., who is now a criminal defense lawyer at Winston & Strawn, said in a statement to the committee that “rather than eliminating waiver requests, the McNulty memorandum provides a multitiered procedure for requesting business entities to disclose protected materials.”
We covered the other side of this issue last month.
The full witness list:
– Karen J. Mathis
President, American Bar Association– Barry M. Sabin
Deputy Assistant Attorney General
United States Department of Justice– William M. Sullivan Jr.
Partner Winston & Strawn, LLP Washington, DC– Andrew Weissmann
Partner Jenner and Block, NY, NY– Richard White
Senior Vice President and General Counsel
The Auto Club Group, Dearborn, Michigan
Mr. White is also Chairman of the Association of Corporate Counsel.
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