Random Thoughts on Corporate Compliance

Radical Compliance has been taking a few days off for vacation over the July 4th weekend. As we recover from yelling ourselves hoarse at those kids setting off fireworks all over town for weeks, it’s time for another round of random thoughts on ethics, compliance, audit, and whatever else comes to mind. 

First, I welcome that updated FCPA Resource guide as much as everyone else in this field — but did the Justice Department really need to release it the day before a long holiday weekend? Way to ruin a holiday, guys.

The Federal Deposit Insurance Corp. wants to overhaul quarterly reporting for community banks, since that data is a pain to compile and generally stale by the time it reaches FDIC analysts. This is a great idea, and one tailor-made for XBRL or some similar data-tagging language. XBRL US, get on it!

I always thought SEC chairman Jay Clayton was a sharp person, but if he keeps up this damfool quest to get confirmed this fall as the next U.S. attorney for New York, I’ll withdraw that assessment.

Attorney general William Barr, on the other hand — maybe he has legal principles that pass for well-crafted in his Fox News-addled mind, but as a political operative the man is dumb as rocks.

We shouldn’t play the national anthem during sporting games. 

I worry about under-performing corporate loans that banks are carrying on their books, bundled as collateralized loan obligations with undeserved AAA credit ratings. Those CLOs should be marked down, except nobody knows what they’re truly worth. Recipe for banking crisis. 

Rather rich that the State Department is warning companies about supply chains tied to human rights abuses in China, when President Trump can’t find the Uighur region of China on a map and couldn’t care less about their plight so long as China keeps buying U.S. agricultural exports and boosts his re-election efforts. 

Delighted to see Unilever, Verizon, and so many others pull their advertising from Facebook. Mark Zuckerberg is out of his depth as CEO, and Facebook has become a scourge on society with its inability to control hate speech and lies.

Memorialize those policy changes your company is making for Covid-19 for posterity. Sometime in the mid-2020s we’re going to see a fascinating period of regulatory enforcement stemming from misconduct that’s happening right now, and that documentation is going to be as valuable as an N-95 mask. 

That unemployment report from last week, showing that America created 4.8 million jobs in June: it tells us that when coronavirus is contained, the economy can rebound quickly. We were just mistaken in our belief that the virus was contained. 

Back to the CLOs. I don’t worry about the biggest banks stumbling into a crisis of over-valued CLOs and then sparking another financial crisis, but I do worry about several mid-sized banks stumbling into such a crisis at one time.  That’s a blind spot of Dodd-Frank oversight.

Joe Biden should cancel the Democratic national convention and be crowned nominee by remote acclamation or something. He can style the move as ending a pretentious, pointless ritual; and when the Republican convention falls apart, he can lord it over the Bumbler-in-Chief that Biden was the wiser. 

Braun, left; and Smith, right.

Markus Braun, disgraced ex-CEO of Wirecard; and Kurtwood Smith from “That 70s Show” — I’m not the only one seeing this, right? 

Seriously, what happened at Wirecard is beyond belief. Germany needs to have a talk with itself about financial sector oversight and regulation of the audit sector. 

You know who would be an intriguing choice to lead the Consumer Financial Protection Bureau under a Biden Administration? Linda Lacewell, head of the New York Department of Financial Services. 

If there were ever a symbol of American decline since President Trump took office, it’s the European Union allowing international flights to resume, and including China while excluding the United States. 

How hard is it to wear a neck buff whenever you’re outdoors, and just pull it over your mouth and nose when approaching other people? Good lord, the worst that can happen is you look a bit French when it’s not around your face. 

Of course the Centers for Disease Control says distance learning is the safest option for students, while the American Academy of Pediatrics recommends reopening schools as much as possible. The CDC’s mission is to control disease; you do that by staying isolated. The AAP’s mission is to protect children’s entire health. All things considered, reopening school serves that interest. 

Denounce me as a heretic if you must, but this I believe: corporate compliance, audit, and risk management are all going to fuse into one souped up risk assurance function by 2030. Thanks to the covid crisis, it may well happen by, like, December. 

Whatever happened to the SEC’s plan to overhaul its whistleblower awards program? Chairman Clayton abandoned that whacky idea to cap large whistleblower awards, and then the rest of his reforms — which were pretty sensible — just kinda vanished. 

If we want to build a Garden of Heroes, the statues therein should be a paramedic, a nursing home aide, a grocery clerk, a daycare worker, and a bus driver. And yet, somehow, I suspect none of those heroes ever crossed Trump’s mind. 

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