Tom Fox is a leader in the ethics and compliance field. He is regularly referred to as the "Compliance Evangelist."
Tom recently just released the Second Edition of The Compliance Handbook, a comprehensive review and guide to the elements of an effective ethics and compliance program. Tom is known for his practical and efficient approach to difficult ethics and compliance issues. His new Handbook is a must-have for ethics and compliance professionals but more importantly for business leaders and managers who understand the importance of implementing an effective ethics and compliance program.
In this Episode, Michael Volkov interviews Tom Fox about the Second Edition of The Compliance Handbook and the important issues addressed in the Handbook.
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Episode 221 -- The "Person" of the Year -- Environmental Social and Governance Initiatives
18:57One of my favorite New Year's reviews is under the title of “Person” of the Year. In the past, I have singled out Chief Compliance Officers, Chief Ethics Officers, Prosecutors, and Whistleblowers.For 2021, the choice is obvious – the most important trend is the rise of Environmental, Social and Governance (“ESG”) programs. In second place, I would choose Supply Chain Management and Risks, given the importance of supply chain management in the post-pandemic world. In the end, ESG dominated the headlines and earned the annual recognition as the issue of the year.
Episode 220 -- DOJ Settles Fraud-Spoofing Case against National West Bank.
19:32The Department of Justice secured a guilty plea from NatWest Markets, the newly-named Royal Bank of Scotland, for trade manipulation, referred to as “spoofing,” in U.S. Treasury markets. The NatWest resolution reflected new changes in DOJ’s white collar enforcement policies, including acknowledgement and consideration of NatWest’s prior misconduct (criminal and civil) and appointment of an independent compliance monitor. NatWest was not offered a deferred or non-prosecution agreement; instead it was required to plead guilty to a criminal charge of securities fraud and another charge of wire fraud.Under the plea agreement, NatWest agreed that during the period of 2008 to 2014, traders in its Stamford and London offices spoofed the market for Treasury futures contracts. In addition, two traders at NatWest’s Singapore branch spoofed the secondary cash market for Treasury securities in 2018. The spoofing scheme violated a 2017 non-prosecution agreement between the United States and NatWest’s broker-dealer subsidiary, and occurred while NatWest was on probation for a separate conviction for manipulation of the foreign currency exchange market.DOJ cited NatWest’s status as a repeat offenders as justification for requiring a criminal guilty plea to two counts. Under the plea agreement, NatWest Markets will pay $35 million in restitution, forfeiture and a criminal fine, serve three years’ probation and take on an independent compliance monitor.In this Episode, Michael Volkov reviews the NatWest prosecution and settlement agreement.
Episode 219 -- DOJ Brings Criminal Case Against 6 Defendants in Aerospace Industry
20:19In a major development, the Antitrust Division returned an indictment against six executives from aerospace engineering firms for an illegal conspiracy to restrict competition in the labor market for aerospace engineers.After warning U.S. businesses, DOJ started bringing criminal cases against businesses that restrict competition for labor through illegal price-fixing or no-poach agreements. The Connecticut criminal case represents a major step in the Justice Department's focus on illegal agreements in labor markets.In this Episode, Michael Volkov reviews the criminal case and the specific allegations.
Episode 218 -- The Biden Administration's New Strategy on Countering Corruption
24:39The Biden Administration announced a new, comprehensive anti-corruption initiative, the United States Strategy on Countering Corruption. The new anti-corruption initiative is the follow on to the earlier announcement elevating the global anti-corruption battle to a national security concern. After that announcement, the Biden Administration conducted a 200-day inter-agency examination to develop a comprehensive government-wide anti-corruption initiative. The 38-page plan released last week outlines steps for cracking down on criminal actors and their networks while improving cooperation among federal agencies and law enforcement. The Biden Administration announced plans to increase financial transparency and new regulations on U.S. real-estate purchases to prevent money laundering.In this Episode, Michael Volkov reviews the new initiative and the important issues raised.
Episode 217 -- The Growing Risk of Individual Board Member Liability
20:45The Delaware Chancery Court is continuing its trend of permitting Caremark claims against corporate board members who fail to exercise proper oversight and monitoring of compliance programs. Over the past few years, the Delaware Chancery Court has consistently raised the stakes and expectation for Board member performance on corporate boards.In this Episode, Michael Volkov reviews the current board member liability cases and the Court's recent rulings.
Episode 216 -- Tom Fox Releases Second Edition of The Compliance Handbook
42:33Tom Fox is a leader in the ethics and compliance field. He is regularly referred to as the "Compliance Evangelist."Tom recently just released the Second Edition of The Compliance Handbook, a comprehensive review and guide to the elements of an effective ethics and compliance program. Tom is known for his practical and efficient approach to difficult ethics and compliance issues. His new Handbook is a must-have for ethics and compliance professionals but more importantly for business leaders and managers who understand the importance of implementing an effective ethics and compliance program.In this Episode, Michael Volkov interviews Tom Fox about the Second Edition of The Compliance Handbook and the important issues addressed in the Handbook.
Episode 215 -- Tom Fox and Michael Volkov Discuss the Board Governance Implications of the Boeing 737 MAX Safety Scandal
44:41The Boeing 737 MAX scandal is a troublesome and disturbing case where corporate board oversight and responsibility was lacking. The implications of the board’s failure resulted in the killing of innocent passengers and the grounding of Boeing’s 737 MAX. Add to that a $2.5 billion settlement, a criminal case against a Chief Technical Pilot, and continuing safety and technical problems, and you have recipe for continuing disaster at Boeing.The Delaware Chancery Court's recent decision denying Boeing's motion to dismiss shareholder derivative claims outlines a devastating picture of Board governance failures relating to Boeing's response to the Lion Air crash in October 2018 and the Ethiopian Airlines crash in March 2019. In this Episode, Tom Fox and Michael Volkov discuss the implications of this recent decision.
Episode 214 -- Review of the Credit Suisse Global Fraud and Bribery Enforcement Action
23:53Credit Suisse Group AG (“Credit Suisse”), a global financial institution, and its London-based European subsidiary, Credit Suisse Securities (Europe) Limited (“CSSEL”) resolved a wide-ranging bribery and fraud scheme involving investments and financing arrangements for an $850 million loan for a tuna fishing project in Mozambique. To resolve the violations, Credit Suisse agreed to pay a total of $547 million in penalties, fines and disgorgement as part of comprehensive criminal and civil resolutions in the United States and the United Kingdom.In this Episode, Michael Volkov reviews the Credit Suisse global fraud and bribery enforcement action.
Episode 213: How to Structure and Implement an ESG Program
23:04As companies focus more on ESG, it is obvious that companies will achieve a significant number of benefits beyond that defined in the ESG acronym. A well-designed and tailored program will bring significant benefits to the overall company’s operations.There are a number of important issues that design and implementation of an ESG program entail. It is hard to fill in many of the important issues given the SEC’s ongoing rulemaking on ESG disclosure issues. Obviously, SEC regulations will have a significant impact and everyone is anxiously awaiting the regulations. In the meantime, many companies are moving forward with planning and implementation. That is a good thing because it is unlikely that the SEC will alter the landscape to which many companies are moving.Here is a list of issues, which I will explore in this podcast:· Who should conduct oversight of the ESG program? A specific committee or the overall board?· Who should be responsible for design and implementation of an effective ESG program?· · How should ESG reporting and disclosure occur? How should the talismanic standards of “materiality” be applied in this context?How can technology be used to ensure proper oversight and reporting of ESG issues?
Episode 212: DOJ Returns Indictment Against Former Boeing Chief Technical Pilot for 737 MAX Safety Scandal
24:49The Justice Department announced the indictment of Mark Forkner, a former Chief Technical Pilot for Boeing for his role in the 737 MAX scandal. Specifically, Forkner is charged with deceiving the FAA’s Aircraft Evaluation Group (“FAA AEG”) relating to Boeing’s 737 MAX airplane and defrauding Boeings U.S.-based airline customers to earn millions of dollars for Boeing.Boeing’s 737 MAX scandal is tragic and disturbing. In January 2021, Boeing settled with the Justice Department and agreed to enter into a Deferred Prosecution Agreement in exchange for total payments of $2.5 billion. As you will recall, Boeing’s 737 Max was involved in two crashes in 2018 and 2019 before being grounded. In October 2018, Lion Air flight 610 crashed in the Java Sea, killing 189 people, and in March 2019, Ethiopian Airlines flight 302 crashed shortly after takeoff, killing 157 people. The United States ordered the planes grounded shortly after the Ethiopian Airlines crash.In this Episode, Michael Volkov reviews the criminal indictment against Mark Forner and his role in the Boeing 737 MAX scandal.