Ethics & Compliance Random Thoughts

Radical Compliance is going on vacation for a few days, so it’s time for another collection of random thoughts about corporate compliance, audit, and risk management while I’m waiting at the airport departure gate. In no particular order… 

SEC chairman Jay Clayton raises a valid, difficult point when he says our corporate disclosure regime is based on reporting prior financial performance, whereas climate change disclosures are much more future-looking estimates — and therefore, it’s much trickier to codify a standard set of disclosures. I mean, we still need to do that, and I still believe Clayton isn’t interested in the challenge; but his point is not wrong.

Astroturfing — the practice of bombarding regulatory agencies with fake comment letters — really is a pernicious thing. I’m glad the House Financial Services Committee is looking into it

In some alternate universe, Netflix sorts its programs by length of time: half-hour sitcoms, one-hour dramas, and so forth. That universe is superior to this one.

What happens to a company that gets a declination to prosecute under the FCPA Corporate Enforcement Policy, and then violates the FCPA again sometime in the future? Shouldn’t that company come under severe scrutiny for the effective compliance program it supposedly had after the first violation, but probably didn’t? 

Facebook needs to face civil liability for false statements published on its network, just like newspapers do. We need to change libel law in this country to force that, because Facebook will never exercise proper editorial responsibility on its own.

Disney+ had more than 26 million subscribers in its first quarter of existence. As the parent of two young children, I wonder what that number would be if Disney+ didn’t include Frozen.

I want President Trump out of office as much as any sensible, patriotic American. But the more important priority to preserve the Constitution is to take the Senate back from Republicans. 

The Houston Astros should be stripped of their 2017 World Series title for the cheating scandal. 

I’m all for the NYC Bar Association publishing that report about compliance officer liability, but what’s next? A formal request for rulemaking or guidance from regulatory agencies? 

Enough with the voting apps! Just use paper ballots. I’ll take a mess like the Florida recount in 2000 over uncertain electronic audit trails any day.

Are we ever going to see the SEC’s final package of reforms to its whistleblower award program? Clayton originally wanted to wrap up that project by the end of 2019. Then that half-baked idea of capping large awards blew up in his face, and now we’re in limbo.

And I’m willing to bet the Democrats will take back the Senate, too.

That story about U.S. Bank firing a call center manager for lending $20 to a customer on Christmas Eve calls out another regulatory issue: getting bank deposits cleared more quickly. No wonder the Federal Reserve is pushing for real-time payments. If banks don’t get ahead of this, fintechs like Venmo will steal their lunch.

Farewell to Robert Jackson, outstanding commissioner at the Securities and Exchange Commission, who left on Feb. 14. He did what a minority-party commissioner should do: skewer the majority party’s ideas. He’d be a superb SEC chairman under a Democratic administration.

If the Public Company Accounting Oversight Board ever does merge into the SEC, as the Trump Administration proposes — I’m hard-pressed to see auditing standards ever keeping up with audit industry needs again. Those standards ain’t keeping up with industry needs right now. 

Every ethics professional should light a candle for the end of The Good Place. It was great, and it will be missed.

My sense is that the Supreme Court will rule in the SEC’s favor in Liu v. SEC, that case coming up on March 3 about the agency’s disgorgement powers. Too many parties are saying that to decide otherwise is a foolish idea. 

Lt. Col. Alexander Vindman should resign from military service and run for office. He’s principled, gutsy, and smart. We need more people like him restoring integrity to government. 

Oh boy, the Red Sox are gonna stink this year.

Companies should also remember: if the Supreme Court does get rid of SEC disgorgement power, legislation in Congress is pending to restore that power right back — and to overturn the court’s Kokesh decision that put a five-year statute of limitations on disgorgement. Be careful what you wish for, people. 

Nice to see COSO churning out more focused guidance on cybersecurity, sustainability, healthcare, and (supposedly coming soon) blockchain. I get it, that these publications are COSO’s fight to stay relevant amid a sea of guidance — but so what? It’s thoughtful stuff. 

I once was an avid user of RunKeeper on my phone, to track how well I ran on daily jogs. One day RunKeeper locked me out of my account. I stopped using it, and then stopped bringing my phone on runs entirely. You know what? I’m a better runner for it.

I want to say the Office of the Comptroller of the Currency went a bridge too far when it charged Wells Fargo’s former audit executives with “failing to prevent” the abusive sales practices there — but wow, those folks’ actions make it hard to defend that theory.

Still don’t believe we’ll see a national data privacy law in the United States anytime soon. Nope.

For a man over 40, success is not being able to walk into a high-end store and buy a pair of pants for $400. It’s still fitting into the jeans you bought for $32.99 at Old Navy in 2004.

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