Of Fat Fingers, Internal Controls and Compliance

The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode Tom Fox and Matt Kelly delve into the recent speech by Michael Hsu, the head of the Office of the Comptroller of the Currency, on the accountability challenges posed by artificial intelligence in the banking sector.  The discussion highlights Hsu's emphasis on the lack of a robust accountability framework for AI, illustrating the issue with the Air Canada chatbot incident. The conversation also touches on potential systemic risks AI could pose to the financial sector, the need for explainable AI, and the shared responsibility model used in cloud computing as a potential template for addressing these challenges. The episode underscores the necessity for compliance officers to ensure contracts and IT controls are in place and stresses the importance of developing trust and accountability mechanisms before widespread AI adoption. Key Highlights ·      AI Accountability: A Regulator's Perspective ·      Case Study: Air Canada's AI Mishap ·      Legal and Technological Challenges ·      Exploring Solutions and Shared Responsibility Resources Matt on Radical Compliance  Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode of ‘Compliance Into the Weeds’, Tom and Matt take a deep dive into last week’s trial verdict against Donald Trump in NYC and lessons for the compliance professional. We explore the importance of internal controls, consistent consequence management, and effective leadership. They also delve into how compliance officers can learn from the storytelling strategies used in the trial and emphasize the application of the rule of law. Key Highlights: Overview of Trump’s Criminal Conviction Internal Controls and Compliance Lessons Consequences Management and Consistent Enforcement Ethical Leadership and Communication Who is your audience? Storytelling in Compliance Final Thoughts and Rule of Law Resources: Matt on Radical Compliance  Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt delve deep into Citigroup’s $126 million trading error, resulting from poor internal controls. They discuss how a simple ‘fat finger’ error by a trader led to a major flash crash on European stock exchanges in 2022, and how the failure of Citigroup’s internal controls allowed it to happen. The discussion covers multiple compliance lessons, including the importance of understanding the human element in control design, the need for adequate staffing and monitoring, and the necessity of consistent global risk management. Fox and Kelly also highlight the importance of addressing findings from internal audits and maintaining urgency in improving internal controls. They emphasize that companies should think creatively about risk management, taking into account various global factors, including holidays and local regulations. Key Highlights: The Citigroup Internal Control Fiasco Compliance Lessons from Citigroup's Mistake The Human Element in Compliance and Control Failures Global Consistency in Risk Management Resources: Matt on Radical Compliance  Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom Fox and Matt Kelly take a deep dive into a recent report by Prevalent on Third Party Risk Management in 2024 and Microsoft’s 2024 Environmental Sustainability Report. Tom and Matt discuss the challenge companies face in aligning their sustainability goals with their supply chain management. They question whether sustainability functions within a company have the authority to influence supply chain decisions, such as rejecting suppliers that do not meet sustainability criteria. We discuss the  Microsoft Report, noting that while the company acknowledges it has not yet achieved the ability to reject non-compliant suppliers, it suggests a target of improvement by 2030. The core issue highlighted is whether sustainability initiatives will have significant influence over supply chain decisions in the future.  Key Highlights: Intersection of Supply Chain Risk Management and Sustainability The Role of Sustainability in Supply Chain Decisions Microsoft’s Journey Towards Sustainable Supply Chain Management The Energy Industry Model Resources: Matt on Radical Compliance Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt look at the absolutely scathing report issued by the law firm Cleary Gottlieb on the toxic culture of harassment and abuse at the Federal Deposit Insurance Corporation. A recent scandal has been unveiled in the U.S. banking sector, spotlighting the Federal Deposit Insurance Corporation (FDIC). A report has unveiled a toxic corporate culture riddled with instances of harassment, whistleblower retaliation, and poor leadership under Chairman Martin Gruenberg. Fox, viewing the scandal as a pivotal moment, emphasizes the need for accountability and radical change within the organization, particularly in addressing the issues revealed in the report. Despite the daunting challenges, Fox maintains a level of optimism, believing that with the right management and leadership changes, the FDIC can rectify its corporate culture. Kelly recognizes the deep-seated cultural issues brought to light by the report, nonetheless, he believes that due to the FDIC's relatively small size, with the right leadership and cultural shifts, it is possible to turn the organization around. Both experts' perspectives are rooted in their understanding of corporate culture and governance, and their beliefs in the power of effective leadership and cultural change. Key Highlights: Toxic Culture Exposed in FDIC Report Ethical Culture Assessment in Banking Regulation Systems Toxic Culture: Mismanagement & Whistleblower Retaliation Structure and Toxic Corporate Environment Transformative Potential within the FDIC Resources: Matt Kelly on Radical Compliance Tom  Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award-winning, Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom Fox and Matt Kelly look into an absolutely wacko SEC enforcement action involving BF Borgers and its founder and principal, Benjamin Borger’s. The auditing sector was recently rocked by the Securities and Exchange Commission’s (SEC) investigation into BF Borgers CPA, an auditing firm with over 1,600 problematic disclosures. The incident, which serves as a reminder of the critical role played by audit committees in ensuring appropriate audit procedures,. Only a fraudster can admire the audacity of Benjamin F. Borgers in fabricating audit reports for hundreds of clients, which underscores the need for enhanced governance and regulatory measures to prevent similar incidents in the future. We discuss the impact on smaller public companies, focusing on their struggles to find competent and affordable audit firms. Matt raised the question of where the company’s audit committees were during all this fraudulent work. He also speculates on potential legal repercussions for Borgers and his firm. Both perspectives highlight the gravity of the situation, the need for improved oversight, and potential consequences of such actions. Key Highlights: Audit Quality Oversight in Regulatory Environment Finding New Auditors After Losing Previous Firm Limited Options for Small Company Auditors Proactive Monitoring of Audit Firms by Committees Resources: Matt on Radical Compliance  Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt look into corporate reports on their Boards’ oversight of AI.  As the world ventures deeper into the age of artificial intelligence (AI), the issue of corporate governance over AI is emerging as a crucial point of discussion. Tech giants such as Google are facing demands for more board-level attention to AI risk management due to concerns about the lack of transparency and oversight. Tom highlights this lack of detailed consideration of AI at the board level, raising doubts about whether boards are suitably prepared for AI's rapid development and potential enforcement risks. His concerns are rooted in limited mentions of AI in proxy statements of S&P 500 companies, suggesting current practices might not be sufficient for the future.  Meanwhile, Matt emphasizes the need for boards to start considering staffing, expertise, and risk management related to AI without necessarily forming dedicated AI committees at present. Kelly's concerns stem from the lack of detail in proxy statements about what boards are currently doing with AI, especially in tech-heavy companies like Google, indicating the need for potential formation of dedicated committees or sub-specializations in the future.  Key Highlights ·      AI Risk Management: Tech vs. Non-Tech Perspectives ·      Enhancing Corporate Governance Through AI Oversight ·      Technology Risk Oversight in Evolving Companies ·      AI Oversight for Corporate Boards: Future Risks Resources Matt on Radical Compliance  Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award-winning Compliance into the Weeds is the only weekly podcast that takes a deep dive into a compliance-related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt take a deep dive into imbroglio involving Jontay Porter and gambling on NBA games. The recent scandal involving the lifetime suspension of Jontay Porter from the NBA due to questionable prop bets, has sent shockwaves through the sports betting industry. Tom views this incident as a stark warning for compliance professionals, underscoring the importance of data analytics in detecting anomalies and misconduct. He notes that thorough data analysis can expose even lesser-known players like Porter to inappropriate behavior while also commending the NBA’s swift and decisive action to preserve the integrity of the game. Matt, a digital transformation advocate in sports betting, believes the scandal highlights the benefits of digital transformation in the industry. He stresses the crucial role of data analytics in identifying suspicious activity and potential misconduct, agreeing with the NBA’s decision to suspend Porter and protect the sport’s integrity. Both Fox and Kelly’s perspectives are shaped by their backgrounds in compliance and digital transformation, respectively, emphasizing the profound impact of data analytics in these areas. Key Highlights: NBA Suspension: Data Analytics in Sports Betting Sports Betting Fraud Prevention through Digital Transformation Unveiling Unusual Patterns in Financial Transactions Location-Based Anomalies in Investigative Analytics Consequence Management Resources: Tom on the FCPA Compliance Report Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt take a deep dive into recent study on bias in workplace hiring and use the study to consider if compliance needs to be more centralized. The topic of discriminatory patterns in hiring is an interesting, yet contentious issue. It encompasses biases in recruitment based on factors such as names, gender, and race, which unfortunately, are still prevalent in various companies. Tom believes that these discriminatory practices hamper equal opportunities and hence, need to be addressed earnestly. Drawing from his likely experience in promoting fair employment practices, he emphasizes the need for diversity and inclusion initiatives. On the other hand, Matt attributes such discriminatory hiring patterns to inherent biases and prejudices of employers. He argues that discriminatory practices result in a lack of diversity in the workplace as qualified individuals are overlooked based on their race, gender, or age. Following from his perspective on the matter, Kelly champions the execution of policies that foster equality and fairness in the hiring process.  Key Highlights ·      Bias in Hiring Practices Based on Names ·      Bias Reduction Through Centralized Recruitment Operations ·      Enhancing Control Environment through Internal Audits ·      Ethical Alignment for Compliance Management Success Resources Matt on Radical Compliance   Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices

The award winning, Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. Looking for some hard-hitting insights on compliance? Look no further than Compliance into the Weeds! In this episode, Tom and Matt take a deep dive into the variables a compliance professional should consider when performing a risk assessment. We also say a few words about our experiences in the total solar eclipse of April 8. Risk assessments in compliance encompass the careful evaluation of both external and internal risks, necessitating a carefully planned process for overseeing various risk assessments within a company. This task, while intricate and often challenging, is a crucial aspect of compliance. Fox emphasizes the necessity to precisely define the scope of risk assessments, which could involve assessing external threats, internal controls, or both. He proposes that companies could benefit from the guidance of internal audits, external consultants, or professional service firms.  Similarly, Matt acknowledges its complex and challenging nature. Kelly underscores the importance of a disciplined, coherent approach to managing risk assessments across different parts of an organization, suggesting the possibility of involving assistance from third-party firms or internal audit teams. Both Fox and Kelly's perspectives underscore the importance of strategic planning, effective management, and possible external input in conducting risk assessments in compliance programs.  Key Highlights ·      Comprehensive Approach to Conducting Risk Assessments ·      Collaborative Risk Assessment for Compliance Optimization ·      Enhancing Compliance through Internal Control Testing ·      Strategic Integration of Compliance in Enterprise Risk ·      Celestial Event Viewing: The Influence of Clouds Resources Matt on Radical Compliance  Tom   Instagram Facebook YouTube Twitter LinkedIn Learn more about your ad choices. Visit megaphone.fm/adchoices