ABC compliance. See Anti-bribery and corruption (ABC) compliance
ABC risk assessment, 90–91
Abuse of market power, 136–137, 145–146
Accelerated revenue, 166–167
Accountable care organization (ACO), 231
Accounting enforcement metrics, 169–170
Accounting fraud, 8–9. See also Financial reporting fraud
Accounting quality model (AQM), 16, 172, 173
ACO. See Accountable care organization (ACO)
Active/passive bribery, 79
Adequate procedures defense, 79
Administrative law judges (ALJs), 17
Administrative proceedings, 17–18, 75
Advice and reporting mechanisms, 50–53
AEOI. See Automatic exchange of information (AEOI)
AIG, 5
AKS. See Anti-Kickback Statute (AKS)
ALJs. See Administrative law judges (ALJs)
American Recovery and Reinvestment Act (2009), 5
AML regulation. See Anti-money laundering (AML) regulation
Amortization, 167
Anomalous prices, 145–146
Anti-bribery and corruption (ABC) compliance. See Bribery and corruption
Anti-Kickback Statute (AKS), 10, 226, 241. See also Bribery and corruption
Anti-money laundering (AML) regulation. See Money laundering
Anti-Unfair Competition Law (AUCL), 84
AQM. See Accounting quality model (AQM)
Artificial price provision (rule 180.2), 143
Athena Capital, 147
AUCL. See Anti-Unfair Competition Law (AUCL)
Auditing and monitoring, 53–55
bribery and corruption, 94
financial reporting fraud, 177
life sciences industry, 251–252
money laundering, 110–112
offshore tax evasion, 218
UDAAP practices, 196
Authorization controls, 95
Automated exception reporting, 95
Automated trade surveillance system, 145, 156
Automatic exchange of information (AEOI), 208, 221
Average wholesale price (AWP) lawsuits, 240
Avon Products, 21
AWP lawsuits. See Average wholesale price (AWP) lawsuits
Bad debt expense, 168
BAE Systems, 77
Baer, Julius, 11
Balance sheet, 160
Bank of America, 2, 6, 7, 8–9, 118
Bank of Nova Scotia, 6
Bank of Tokyo Mitsubishi-UFJ, 104
Bank Secrecy Act (BSA), 101, 210. See also Money laundering
Barclays, 6
Bear Stearns, 5
Beard, Sarah Jacobs, 225
Ben-Chorin, Ori, 27
Bergin, Richard J., 135
Big data information sources and analytics, 16
Bill-and-hold transaction, 167
Billion-dollar penalties, 2
Bio-Rad, 68
Biovail Pharmaceuticals, 243
Birkenfeld, Bradley, 209
Birnbaum-Sarcy, Laurence, 207
BIS. See Bureau of Industry and Security (BIS)
Blackout period, 154
BlackRock, 20
Board of directors, 32–33
BP, 2–3
Braithwaite, John, 239
Brazil, Russia, India, and China (BRICs), 69
Bribery and corruption, 12–13, 67–100
auditing and monitoring, 94
China. See China
communication and training, 93
comparison of international ABC laws, 98–100
compliance program, 88
data analytics, 94–95
detective controls, 94–95
disclosure protocols, 96
due diligence, 92–93
enforcement and accountability protocols, 96
hotlines and whistleblower mechanisms, 94
India, 98–100
internal controls, 91
internal investigation, 96
life sciences, 241–244, 244–245
multijurisdictional enforcement/global cooperation, 67
overview (figure), 89
policies and procedures, 91–92
preventative controls, 90–93
prosecution of individuals, 69
responsive controls, 95–96
risk assessment, 90–91
Russia, 98–100
United Kingdom. See United Kingdom—bribery and corruption
United States. See United States—bribery and corruption
BRICs. See Brazil, Russia, India, and China (BRICs)
Brockmeyer, Kara, 91
Broken windows strategy, 8
Brown Brothers Harriman, 104
Bruker, 68
BSI SA, 211
Bureau of Industry and Security (BIS), 118
Business unit, functional, and operational compliance, 37–38
Caldwell, Leslie, 12, 15, 16, 20, 22, 23, 42
Call plans, 246
Capital One Bank, 185
Capitalization, 167
Caruso, John F., 101
Cavaliere, Regina G., 237
CCO. See Chief compliance officer (CCO)
CDD. See Customer due diligence (CDD)
CEA. See Commodity Exchange Act (CEA)
Centralized onboarding system, 216
CEO. See Chief executive officer (CEO)
Ceresney, Andrew, 159, 220, 244
CFPA. See Consumer Financial Protection Act (CFPA)
CFPB. See Consumer Financial Protection Bureau (CFPB)
CFTC. See Commodities and Futures Trading Commission (CFTC)
Change management process, 216
Chen, Hui, 24
Chief compliance officer (CCO), 33–35
Chief executive officer (CEO), 38
civil/criminal actions, 86
commercial bribery, 85–86
corruption hotline, 86
defenses and mitigation measures, 87
enforcement trends, 87–88
legislation, 84
official bribery, 84–85
overview (table), 98–100
penalties, 86
whistleblower legislation, 86
CIA. See Corporate integrity agreement (CIA)
CID. See Civil investigative demand (CID)
CIP. See Customer identification program (CIP)
Civil administrative proceedings, 17–18, 75
Civil fraud complaints, 17–18
Civil injunction, 75
Civil investigative demand (CID), 205
Classical insider trading, 148–149
Clean Companies Act, 81
Clearstream Banking, 117
CMS. See Compliance management system (CMS)
Code of conduct, 41–44
Cole, James, 32
Commercial bribery, 85–86
Commerzbank, 104
Commodities and Futures Trading Commission (CFTC)
manipulation of LIBOR and foreign exchange rate, 6
swaps market, 5
whistleblowers, 5
Commodity Exchange Act (CEA), 143
Common reporting standard (CRS), 221
Communication and training
bribery and corruption, 93
economic and trade sanctions, 125–126
employees, 50
factors to consider, 48
frontline supervisors, 49–50
methods, 48
senior managers, 49
Compliance coordinator, 37
Compliance function framework, 31
Compliance management system (CMS), 197–198
Compliance monitor, 74
Compliance monitoring dashboard, 252
Compliance officer, 33–35
Compliance personnel, 19–20
Compliance program
DOJ/SEC guidance, 24
evaluating the program, 35–36
hallmarks of effective program, 23, 88–89
importance, 24
Morgan Stanley, 22
questions to be answered, 88
tailor program to companies’ specific needs, 88
universally accepted definition, 22
Compliance risk assessment, 40–41
Conduct Costs Project, 2
Conduct risk, 201
Confidentiality (hotline), 52
Configurable dashboard, 56
Constructive insiders, 148
Consumer complaints, 192–195, 204
Consumer finance protections. See Unfair, deceptive, and abusive consumer finance practices
Consumer Financial Protection Act (CFPA), 187
Consumer Financial Protection Bureau (CFPB), 7, 8, 184–186, 188, 189
Convention against Corruption, 68
Convention on Combating Bribery and Foreign Public Officials in International Business Transactions, 68
Cooking the books, 165. See also Financial reporting fraud
Cordray, Richard, 8, 185, 190, 200
Corner, 137
Corporate compliance committee, 36
Corporate Crime in the Pharmaceutical Industry (Braithwaite), 239
Corporate insiders, 148. See also Insider trading
Corporate integrity agreement (CIA), 21, 227, 237, 238, 248
Corporate monitors, 21
Corporate settlements, 20
Corruption. See Bribery and corruption
Counterparties, undue pressure, 180–181
Criminal Law of the People’s Republic of China, 84
Cross-border tax evasion. See Offshore tax evasion
Cross-border Working Group (SEC), 172
CRS. See Common reporting standard (CRS)
CRS Handbook, 221
Culture of integrity, 24, 25, 28
Customer due diligence (CDD), 108
Customer identification program (CIP), 106, 108, 109
D&A. See Data and analytics (D&A)
Daiichi Sankyo, 243–244
Daimler AG, 77
D’Ambrosio, Nicholas, 67
Data analytics, 15–16
bribery and corruption, 94–95
economic and trade sanctions, 127, 131
financial reporting fraud, 172–173
healthcare industry, 232–233
life sciences, 252
maturity continuum, 57
money laundering, 112–114
offshore tax evasion, 218
UDAAP practices, 204
Data and analytics (D&A), 56–61. See also Data analytics
DCO. See Deputy compliance officer (DCO)
DC&P. See Disclosure controls and procedures (DC&P)
Deferral of expenses, 167
Deferred prosecution agreement (DPA), 20–21
DOJ, 76
SEC, 76–77
United Kingdom, 78
Deferred revenue, 167
Delery, Stuart F., 10
Delta Pine, 71
Department head, 38
Department of Justice (DOJ)
appointment of chief compliance officer, 68, 248
civil fraud complaints, 18
compliance program, 24
financial reporting fraud, 168
guidelines regarding corporate wrongdoing, 30
individual wrongdoing, 18–19
market manipulation, 141
possible resolutions (bribery and corruption), 75
Yates Memorandum, 18
Depreciation, 167
Deputy compliance officer (DCO), 35
DERA. See Division of Economic Risk and Analysis (DERA)
Descriptive data and analytics, 57
Detective controls, 50–61
advice and reporting mechanisms, 50–53
auditing and monitoring, 53–55
bribery and corruption, 94–95
data and analytics (D&A), 56–61
economic and trade sanctions, 126–127
ethics and compliance (E&C) business plan, 58
financial reporting fraud, 176–177
healthcare industry, 232–233
insider trading, 156–157
life sciences, 251–252
market manipulation, 144–146
money laundering, 110–114
offshore tax evasion, 217–218
technology and compliance innovation, 55–56
UDAAP practices, 203–204
Deutsche Bank, 6
Diagnostic data and analytics, 57
Diamond Foods, 9
Disciplinary system, 63
Disclose or abstain doctrine, 149
Disclosure controls and procedures (DC&P), 161, 162
Disclosure protocols, 63–64
bribery and corruption, 96
economic and trade sanctions, 131–133
Division of Economic Risk and Analysis (DERA), 16, 172, 173
Document preservation, 178
Dodd-Frank Wall Street Reform and Consumer Protection Act, 5, 30–31, 135, 143, 187
DOJ. See Department of Justice (DOJ)
DPA. See Deferred prosecution agreement (DPA)
Driving under the influence (DUI) conviction, 60
Drug companies. See Life sciences industry
Due diligence
bribery and corruption, 92–93
economic and trade sanctions, 124–125
employee, 44–45
global organizations, 46–47
money laundering, 108–110
third-party, 45–46
DUI conviction. See Driving under the influence (DUI) conviction
Dynes, Kelly A., 207
Earnings management, 168
E&C plan. See Ethics and compliance (E&C) business plan
Economic and trade sanctions, 117–134
background (history of sanctions), 120–123
communications and training, 125–126
detective controls, 126–127
disclosure protocols, 131–133
due diligence, 124–125
enforcement protocols, 129–131
facilitation, 126
50 percent rule, 122, 123, 125
internal investigation, 128–129
Iran, 119
OFAC’s blocking sanctions, 123
penalty amount, 129–131
penalty notice, 133
policies and procedures, 123–124
preventative controls, 123–126
purpose of sanctions, 118
responsive controls, 127–128
SDN list, 118–119
secondary sanctions, 133
sectoral sanctions, 119
SSI list, 119
strict liability, 118
Ukraine-related sanctions, 119
Economic Sanctions Enforcement Guidelines, 129
EDD. See Enhanced due diligence (EDD)
EHR. See Electronic health record (EHR)
Electronic communication, regulators’ use, 147, 157
Electronic health record (EHR), 232
Eli Lilly, 245
Elliot, Cameron, 20
Embraer, 12
Emergency Economic Stabilization Act (2008), 5
Employee due diligence, 44–45
Employee incentives, 47
Enforcement and accountability protocols, 63, 96
Enhanced due diligence (EDD), 214, 218
Equal Credit Opportunity Act, 202
Ethics and compliance (E&C) business plan, 58
Executive Order 13662, 119
Expense recognition, 167
Facilitation exception, 71
Facilitation payments, 95
Fair Debt Collection Practices Act, 202
Fair presentation issues, 181
False Claims Act (FCA), 10
DOJ civil actions, 18
drug companies, 242
effect of full disclosure, 64
government contracts/expenditures, 14
False rumor, 138
Falsifying research and publications, 247–248
FATCA. See Foreign Account Tax Compliance Act (FATCA)
FATF. See Financial Action Task Force (FATF)
FCA. See False Claims Act (FCA)
FCC. See Federal Communications Commission (FCC)
FCPA. See Foreign Corrupt Practices Act (FCPA)
FDA. See Food and Drug Administration (FDA)
FDCA. See Food, Drug and Cosmetic Act (FDCA)
Federal Communications Commission (FCC), 206
Federal Energy Regulatory Commission (FERC), 141, 142
Federal Financial Institutions Examination Council (FFEIC), 198
Federal sentencing guidelines. See U.S. Federal Sentencing Guidelines for Organizational Defendants
Federal Trade Commission (FTC), 142, 186, 206
Federal Trade Commission Act, 186
FERA. See Fraud Enforcement and Recovery Act (FERA)
FERC. See Federal Energy Regulatory Commission (FERC)
FFC. See Office of Foreign Funds Control (FFC)
FFEIC. See Federal Financial Institutions Examination Council (FFEIC)
Fictitious transactions, 165
Field-based compliance personnel, 37
50 percent rule, 122, 123, 125
Financial Action Task Force (FATF), 222
Financial and subprime crisis, 7
Financial Conduct Authority (FCA), 136, 141
Financial Crimes Enforcement Network (FinCEN), 20, 109, 182
Financial crisis (2008), 5
Financial Industry Regulatory Authority (FINRA), 16, 191
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), 18
Financial reporting crisis (2001-2002), 4–5
Financial reporting fraud, 9, 159–181
accounting enforcement metrics, 169–170
accounting quality model (AQI), 172, 173
allegations, consequences of, 160
auditing and monitoring, 177
bad faith, 164
data analytics, 172–173
decision points, 179
defined, 163
detective controls, 176–177
distinguishing fraud from nonfraud, 164–165
document preservation, 178
evidence of fraud, 174
fair presentation issues, 181
financial statements, 160
Fraud and Audit Task Force, 173
fraudulent intent, 164
future regulatory developments, 180–181
importance of financial reporting, 161
independent auditors, 162–163
initiation of cases, 170–172
internal investigation, 179–180
management stewardship of financial statements, 161–162
materiality, 163–164
monitoring by audit committee, 177
objectives of the investigation, 173–174
preventative controls, 175–176
responsive controls, 177–178
risk assessment, 175–176
risk-based inquiries (RBIs), 172
SEC accounting enforcement actions, 170
SEC filings, 161
settlement process, 174–175
subcertifications (subcerts), 162
tone from the top, 175
types of fraudulent schemes, 165–168
undue pressure on counterparties, 180–181
whistleblowers, 171
work plan and investigation activities, 178–179
Financial services companies, 154–155
Financial statement disclosures, 64
Financial statements, 160
FinCEN. See Financial Crimes Enforcement Network (FinCEN)
Fines and penalties, 2–3
FINRA. See Financial Industry Regulatory Authority (FINRA)
FIRREA. See Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
Five-Year Anti-Corruption Plan, 84
Fixed assets, 167
Fokker Services B.V., 117
Food, Drug and Cosmetic Act (FDCA), 245
Food and Drug Administration (FDA), 245
Foreign Account Tax Compliance Act (FATCA), 11, 208, 212–213
Foreign Corrupt Practices Act (FCPA), 67, 70, 244
Foreign exchange markets, 6
Forensic accountants, 180
Forensic review of files, 157
Form 8-K, 171
Forward-looking metrics, 36
Fourth EU AML Directive, 222
Franklin v. Parke-Davis, 245
Fraud and Audit Task Force (SEC), 173
Fraud Enforcement and Recovery Act (FERA), 5, 14
Fraud risk assessment, 175–176
Fraudulent intent, 164
Frontline supervisors, 49–50
FS Guidelines. See U.S. Federal Sentencing Guidelines for Organizational Defendants
FSG, 29. See also U.S. Federal Sentencing Guidelines for Organizational Defendants
FTC. See Federal Trade Commission (FTC)
Functional senior leaders, 38
Gatekeepers, 19–20
General Factors Affecting Administrative Action, 128, 130
Gitterman, Einar B., 67
GlaxoSmithKline (GSK), 2, 12, 80, 88, 238
Global cooperation among enforcement agencies, 16–17
Global organizations
code of conduct, 44
compliance risk assessment, 41
due diligence, 46–47
economic sanctions, 134
hotline, 53
internal investigation, 62–63
Globalization, 12–13
Google, 43
Governance, 31–40
Governance, risk, and compliance (GRC) framework, 28
Government pricing, 239–241
Government settlement agreement (GSA), 65
Government touch points, 91
GRC framework. See Governance, risk, and compliance (GRC) framework
Grieve, Dominic, 80
GSA. See Government settlement agreement (GSA)
Guidelines, 29. See also U.S. Federal Sentencing Guidelines for Organizational Defendants
Halliburton, 77
“Hallmarks of an Effective Compliance Program,” 24, 88–89
Healthcare expenditures, 9–10
Healthcare industry, 10, 225–235. See also Life sciences industry
accountable care organization (ACO), 231
corporate integrity agreement (CIA), 227
corrective actions, 234
data analytics, 232–233
detective controls, 232–233
electronic health record (EHR), 232
“failure to care,” 229
lack of medical necessity, 229
legislation, 226
medically unlikely edits (MUE), 233
NCCI edits, 233
OIG work plan, 231
Park doctrine, 228
performance incentives, 230, 231
PPACA, 228
preventative controls, 230–232
regulatory landscape, 226–228
relative value units (RVUs), 231
reporting of noncompliant issues, 234–235
responsive controls, 234
risk assessment, 230
root cause analysis, 234
self-reporting, 235
significant enforcement areas, 229–230
sources of information, 228
“worthless services,” 229
Hedley, Timothy P., 27, 135, 159
Hiring Incentives to Restore Employment Act, 212
Holder, Eric, 10
Holding the books open, 167
HSBC, 2, 4, 6, 104, 105, 117, 220
IA. See Investment advisor (IA)
IBM, 71
ICFR. See Internal controls over financial reporting (ICFR)
ICMJE. See International Committee of Medical Journal Editors (ICMJE)
IEEPA. See International Emergency Economic Powers Act (IEEPA)
IIA. See Institute of Internal Auditors (IIA)
Improper disclosure, 168
Income smoothing, 166
Income statement, 160
Incubation, 171
Independent auditors, 162–163
Independent review organization (IRO), 21, 227
Index-based manipulation, 140
India, 98–100
Individual wrongdoing, 18–19, 69
Information explosion, 55
Insider trading, 147–158
automated review of electronic communications, 157
automated trade surveillance system, 145, 156
baseline trading pattern or decision rule, 156
best practices, 153
broker-dealers/investment advisors, 155
circumstantial evidence, 152
classical type, 148–149
consequence of, to companies, 152
consequence of, to individuals, 152
defined, 147
detective controls, 156–157
disclose or abstain doctrine, 149
financial services companies, 154–155
forensic review of files, 157
internal investigation, 157–158
M&A transactions, 152, 154, 157
material nonpublic information, 148
misappropriation type, 149
preventative controls, 154–156
publicly traded companies, 154
quiet/blackout periods, 154
recent enforcement trends, 150–151
red flags, 151
responsive controls, 157–158
rule 10b-5, 151
temporary insiders, 155–156
tipping, 150
types of violations, 147–148
Insider Trading and Securities Fraud Enforcement Act (ITSFEA), 153
Institute of Internal Auditors (IIA), 92–94
Intangible assets, 167
Integrity agreements, 20
Intentional fraud, 164
Internal audit, 39–40
IIA recommendation, 92
UDAAP practices, 204
Internal controls over financial reporting (ICFR), 161, 162
Internal investigation, 61–62
bribery and corruption, 96
economic and trade sanctions, 128–129
financial reporting fraud, 179–180
insider trading, 157–158
offshore tax evasion, 218–219
International Committee of Medical Journal Editors (ICMJE), 245
International Emergency Economic Powers Act (IEEPA), 127
International enforcement, 3
International Professional Practices Framework Practice Guide, 94
Investment advisor (IA), 102, 155
Iran, 119
Iranian Transactions and Sanctions Regulations, 126
IRO. See Independent review organization (IRO)
IRS Whistleblower Law, 15
ITSFEA. See Insider Trading and Securities Fraud Enforcement Act (ITSFEA)
JGC Corp., 77
John Doe summons, 209
Johnson & Johnson (J&J), 2, 10
Joint Plan of Action (JPOA), 119
Kitchen, Shantelle P., 208
Know Your Client (KYC), 108–110
Lawsky, Benjamin M., 103
Layne Christensen Co., 68
Lehman Brothers, 5
LIBOR. See London Interbank Offered Rate (LIBOR)
Life sciences industry, 10, 237–253. See also Healthcare industry
average wholesale price (AWP) lawsuits, 240
bribery and corruption, 244–245
call plans, 246
codes on interactions with healthcare professionals, 243
compliance department, 248–250
corporate integrity agreement (CIA), 237, 238, 248
data analytics, 252
detective controls, 251–252
falsifying research and publications, 247–248
government pricing, 239–241
holistic approach, 253
kickbacks, 241–244
live speaker training, 249
manager field rides, 251
medical affairs (MA) department, 246–247
monitoring, 251–252
nonpromotional activities, 246–247
off-label promotion, 245–246
pay-to-prescribe, 244
preventative controls, 248–250
publishing scientific literature, 247
responsive controls, 252–253
review and approval procedures, 249
review of documentation, 251
sales and marketing promotional activities, 246
sales force compensation models, 250
scientific misconduct, 247–248
sham product development agreements, 243
sham studies, 243
speaker programs, 246
supper clubs, 252
types of corporate misdeeds, 239
web portals, 250
whistleblower lawsuits, 240
Live speaker training, 249
London Interbank Offered Rate (LIBOR), 6, 140
Lucent Technology, 72
Lynch, Karen A., 67
M&A. See Merger and acquisitions (M&A)
MA department. See Medical affairs (MA) department
Macdonald, Sean P., 135
Madoff, Bernie, 4
Maloney, Michael, 169
Management discussion and analysis (MD&A), 161, 168
Manager field rides, 251
Managing risk, 27–66
board of directors, 32–33
business unit, functional, and operational compliance, 38–39
chief compliance officer (CCO), 33–35
compliance coordinator, 37
compliance function, 32–39
corporate compliance committee, 36–37
deputy compliance officer (DCO), 35
detective controls. See Detective controls
DOJ guidelines regarding corporate wrongdoing, 30
federal sentencing guidelines, 29–30
governance, 31–40
GRC framework, 28
internal audit function, 39–40
preventative controls. See Preventative controls
regulatory and evaluative frameworks, 29–31
responsive controls. See Responsive controls
roadmap (compliance function framework), 31
three lines of defense model, 28
Market Abuse Unit (SEC), 151
Market manipulation, 136–147
abuse of market power, 136–137, 145–146
anomalous prices, 145–146
automated monitoring system, 145
corner, 137
detective controls, 144–146
DOJ, 141
education and compliance training, 144
false rumor, 138
index-based manipulation, 140
penalties (2009-2015), 142
preventative controls, 144
pump and dump schemes, 138, 146
regulators’ use of traders’ electronic communication, 147
regulatory landscape, 140–144
responsive controls, 146–147
Rule 180.1 (antifraud provision), 143
Rule 180.2 (artificial price provision), 143
SEC, 141
short and distort schemes, 138
spoofing, 143
squeeze, 137
summary and future trends, 147
trader surveillance, 144–145
uneconomic trading/bidding, 138–140, 146
Market power, abuse of, 136–137, 145–146
Material nonpublic information, 148
Materiality, 163–164
Matsuo, Amy S., 183
“Matters Requiring Attention,” 114
“Matters Requiring Immediate Attention,” 114–115
McCann, Brian J., 67
McDonald, Bob, 38
MD&A. See Management discussion and analysis (MD&A)
Medical affairs (MA) department, 246–247
Medical device companies, 243. See also Life sciences industry
Medically unlikely edits (MUE), 233
Merger and acquisitions (M&A), 152, 154, 157
Merrill Lynch, 5
Middle manager, 38
Miller, Marshall, 69
Misappropriation, 168
Misappropriation insider trading, 149
Misleading MD&A disclosure, 168
MLAT. See Mutual Legal Assistance Treaty (MLAT)
Model 1 IGA, 212
Model 2 IGA, 212
Model intergovernmental agreements, 212
Model validation, 114
Money laundering, 101–115
auditing and monitoring, 110–112
banks penalized under AML regulations, 104
costs of AML compliance, 105
customer identification program (CIP), 106, 108, 109
data analytics, 112–114
detective controls, 110–114
due diligence, 108–110
four pillars of an AML program, 106
individual accountability, 103
KYC program, 108–110
model validation, 114
monitorships, 104
offshore tax evasion, 222. See also Offshore tax evasion
politically exposed person (PEP), 110
preventative controls, 106–110
regulatory landscape, 103–105
residual risk ratings, 107–108
responsive controls, 114–115
risk assessment, 106–108
suspicious activity reports (SARs), 112
transaction monitoring, 110–112
MoneyGram International Inc., 20, 104
Moyers, Glen E., 225
MUE. See Medically unlikely edits (MUE)
Multilateral Competent Authority Agreement, 221
Multinational corporations. See Global organizations
Multiple element arrangements, 167
Mutual Legal Assistance Treaty (MLAT), 210
National Association of Securities Dealers Automated Quotations, 30
National Correct Coding Initiative (NCCI) edits, 233
NCCI edits. See National Correct Coding Initiative (NCCI) edits
New York Stock Exchange, 30
Newkirk, Thomas, 165
Ninth Criminal Law Amendment, 84
Non-prosecution agreement (NPA), 20–21
DOJ, 75
SEC, 76
Nonpublic information, 148
Nonretaliation, 52
Notice of proposed rulemaking (NPRM), 182
NPA. See Non-prosecution agreement (NPA)
NPRM. See Notice of proposed rulemaking (NPRM)
Obama, Barack, 119
Ocwen Financial Corporation, 196
OFAC. See Office of Foreign Assets Control (OFAC)
OFAC’s 11 General Factors, 128, 130
OFAC’s blocking sanctions, 123
Off-label promotion, 245–246
Office of Foreign Assets Control (OFAC), 4, 102, 121
Office of Foreign Funds Control (FFC), 121
Office of General Counsel (OGC), 178
Office of Inspector General (OIG), 227, 231, 238
Office of Intelligence and Analysis (OIA), 121
Office of Market Intelligence (OMI), 171
Office of Terrorism and Financial Intelligence (TFI), 121, 122
Office of Terrorist Financing and Financial Crime (TFFC), 121
Office of the Special Inspector General for the Troubled Asset Relief Program (TARP), 5
Official bribery, 84–85
Offshore tax evasion, 10–12, 207–223
automatic exchange of information (AEOI), 208, 221
centralization of specific functions, 216
change management process, 216
compliance challenges, 213–214
cooperation between departments, 218
costs of compliance, 214
data analytics, 218
detective controls, 217–218
disclosure, 219–220
enhanced due diligence (EDD), 214, 218
FATCA requirements, 212–213
future trends, 220–222
governance programs, 215–216
grace period, 221
internal investigation, 218–219
model intergovernmental agreements, 212
money laundering, 222. See also Money laundering
monitoring, 218
offshore voluntary disclosure programs, 211
organizational changes, 216
preventative controls, 215–217
qualified intermediary (QI), 210, 211
regulatory landscape, 208–212
remediation, 220
responsive controls, 218–220
Swiss banks, 209–211
technology, 216–217
“the Standard,” 221
training, 216
OGC. See Office of General Counsel (OGC)
OIA. See Office of Intelligence and Analysis (OIA)
OIG. See Office of Inspector General (OIG)
OMI. See Office of Market Intelligence (OMI)
Operation Lava Jato, 81
Operational manager, 39
Overstating assets, 168
P5+1, 119
Painting the screen, 138
Parizek, Pamela J., 67
Park doctrine, 228
Parke-Davis, 245
Patient Protection and Affordable Care Act (PPACA), 9, 228, 242
Pay-to-prescribe, 244
PCAOB. See Public Company Accounting Oversight Board (PCAOB)
PEP. See Politically exposed person (PEP)
Performance evaluations, 47–48
Pesce, Teresa A., 101
Pfizer, 244
Pharmaceutical industry. See Life sciences industry
Physician-owned distributorships, 229
Physician Payment Sunshine Act, 228
Plea agreement, 75–
Ploener, Nathan B., 135
Policies and procedures, 41–44
bribery and corruption, 91–92
economic and trade sanctions, 123–124
Policy Statement on Deception, 186–187
Policy Statement on Unfairness, 186
Politically exposed person (PEP), 110
Ponzi schemes, 4
PPACA. See Patient Protection and Affordable Care Act (PPACA)
Precious metals market, 6–7
Predictive coding, 178
Predictive data and analytics, 57
Prescriptive data and analytics, 57
Preventative controls, 40–50
bribery and corruption, 90–93
code of conduct, 41–44
communication and training, 48–50
compliance risk assessment, 40–41
due diligence, 44–47
economic and trade sanctions, 123–126
employee incentives, 47
financial reporting fraud, 175–176
healthcare industry, 230–232
insider trading, 154–156
life sciences, 248–250
market manipulation, 144
money laundering, 106–110
offshore tax evasion, 215–217
performance evaluations, 47–48
risk-specific policies and procedures, 41–44
Price maker, 136
“Principles of Federal Prosecution of Business Organizations,” 24
Protecting Access to Medicare Act (2014), 241
Provisional Measures on the Prohibition of Commercial Bribery, 84
Prudential regulators, 187
Public Company Accounting Oversight Board (PCAOB), 162
Publicly traded companies, 154
Publishing scientific literature, 247
Pump and dump schemes, 138, 146
QI. See Qualified intermediary (QI)
Qualified intermediary (QI), 210, 211
Quasi-insiders, 148
Quiet period, 154
Rainy day accruals, 168
Ralph Lauren, 73
RBIs. See Risk-based inquiries (RBIs)
Recklessness, 164
Regulation AA, 187
Regulations on Establishment of Commercial Bribery Records for the Purchase and Sale of Medicines, 88
Regulators’ use of traders’ electronic communication, 147, 157
Relative value units (RVUs), 231
Remedial action protocols, 64–65
Remediation, 220
Reporting misconduct. See Advice and reporting mechanisms
Reputational risk, 152
Residual risk, 41
Residual risk ratings, 107–108
“Resource Guide to the U.S. Foreign Corrupt Practices Act, A,” 72
“Responsible conduct,” 204–205
Responsible corporate officer doctrine, 228
Responsive controls, 61–65
bribery and corruption, 95–96
disclosure protocols, 63–64
economic and trade sanctions, 127–128
enforcement and accountability protocols, 63
financial reporting fraud, 177–178
healthcare industry, 234
insider trading, 157–158
internal investigation, 61–62
life sciences, 252–253
market manipulation, 146–147
money laundering, 114–115
offshore tax evasion, 218–220
remedial action protocols, 64–65
UDAAP practices, 204–205
Restatement, 171
Revenue recognition, 166–167
Revision statement, 171
“Rise of the rest,” 12
Risk assessment, 40–41
bribery and corruption, 90–91
financial reporting fraud, 175–176
healthcare industry, 230
money laundering, 106–108
Risk assessment challenges and solutions, 42
Risk assessment process steps, 41
Risk-based inquiries (RBIs), 172
Risk management. See Managing risk
Robo-signing of foreclosure documents, 204
Rolls-Royce, 79
Root cause analysis, 234
Round-trip transaction, 166
Routine governmental action, 71
Royal Bank of Scotland (RBS), 6, 118
Rule 10b5-1, 151
Rule 10b5-1 plans, 154
Rule 10b5-2, 151
Rule 180.1 (antifraud provision), 143
Rule 180.2 (artificial price provision), 143
Rule 2111, 191
Russia, 98–100
RVUs. See Relative value units (RVUs)
Sanctions. See Economic and trade sanctions
Sarbanes-Oxley Act, 4, 43, 159, 169
SARs. See Suspicious activity reports (SARs)
Satyam Computer Services, 164
SBM Offshore, 12
Scallon, Mark C., 237
Schering-Plough, 242
Scienter, 164
Scientific misconduct, 247–248
SDN list. See Specially designated nationals and blocked persons (SDN) list
SDNY. See Southern District of New York (SDNY)
SEC. See Securities and Exchange Commission (SEC)
Secondary sanctions, 133
Section 5 prohibition, 186
Sectoral sanctions, 119
Sectoral sanctions identifications (SSI) list, 119
Securities and Exchange Commission (SEC)
accounting fraud cases, 8–9
accounting provisions of FCPA, 72
administrative law judges (ALJs), 17
broken windows strategy, 8
compliance personnel, 19–20
compliance program, 24
Cross-border Working Group, 172
Division of Corporation Finance, 170, 171
Division of Economic Risk and Analysis (DERA), 16
Division of Enforcement, 169
financial reporting fraud, 168, 170
Fraud and Audit Task Force, 173
increased powers, 5–6
insider trading, 7
Market Abuse Unit, 151
market manipulation, 141
possible resolutions (bribery and corruption), 75–76
recent enforcement actions, 9
retaliation against whistleblowers, 14
Staff Accounting Bulletin 99, 163
whistleblower rewards, 31
Segregation of duties, 95
Self-reporting, 171, 235. See Disclosure protocols
Serious Fraud Office (SFO), 67, 79
SFO. See Serious Fraud Office (SFO)
SFX Financial Advisory Management Enterprises, 20
Sham product development agreements, 243
Sham studies, 243
Short and distort schemes, 138
Side agreements with customers, 167
Siemens AG, 77
Snamprogetti/ENI, 77
Société Générale, 6
Southern District of New York (SDNY), 150
Speaker programs, 246
Specially designated nationals and blocked persons (SDN) list, 119
Spoofing, 143
Squeeze, 137
SSI list. See Sectoral sanctions identifications (SSI) list
Staff Accounting Bulletin 99, 163
Staines, Karen S., 183
Standard Bank (Standard Chartered), 6, 79, 104
Standard for Automatic Exchange of Financial Account Information in Tax Matters, 221
Standard for Automatic Exchange of Financial Account Information in Tax Matters: Implementation Handbook, 221
Stanford, Allen, 4
Statement of cash flows, 160
Statement of changes in equity, 160
Statistical sampling, 234
Steele, Charles M., 117
Stryker, 245
Subcertifications (subcerts), 162
Sudanese Sanctions Regulations, 126
Suitability rule, 191–192
Suitability standard, 190
Supervisors, 49–50
Supper clubs, 252
Suspicious activity reports (SARs), 112
Susser, Adam C., 207
Sustainable AgroEnergy PLC, 79
Sustainable Wealth Investments UK Ltd., 79
Sweet Group plc, 79
SWIFT messages, 113
TAP Pharmaceutical Products, 237–238
TARP. See Office of the Special Inspector General for the Troubled Asset Relief Program (TARP)
Tax Information Exchange Agreement (TIEA), 210
Technip S.A., 77
Technology and compliance innovation, 55–56
Temporary insiders, 148–149, 155–156
Tench, Kathy, 237
Terrorist financing, 3
TFFC. See Office of Terrorist Financing and Financial Crime (TFFC)
TFI. See Office of Terrorism and Financial Intelligence (TFI)
Third-party due diligence, 45–46
Third-party intermediary (TPI), 45, 46, 91–93
Three lines of defense model, 28
TIEA. See Tax Information Exchange Agreement (TIEA)
Tippee, 150
Tipper, 150
Tipping, 150
Tone in the middle, 38
“Too big to fail,” 5
Total S.A., 77
TPI. See Third-party intermediary (TPI)
Trader surveillance, 144–145
Training. See Communication and training
Transparency International, 69
Truman, Harry, 121
Truth in Lending Act, 202
UDAAP. See Unfair, deceptive, and abusive consumer finance practices
UDAP. See Unfair or deceptive acts or practices (UDAP)
Ukraine-related sanctions, 119
Underaccruing, 167–168
Understating liabilities, 168
Undue pressure on counterparties, 180–181
Uneconomic trading/bidding, 138–140, 146
Unfair, deceptive, and abusive consumer finance practices, 183–206
abusive act or practice, 190
CFPB examination, 196–200
check-the-box approach, 201
civil investigative demand (CID), 205
compliance management system (CMS), 197–198
conduct risk, 201
consumer complaints, 192–195, 204
current UDAAP environment, 192–196
data analytics, 204
deceptive act or practice, 190
detective controls, 203–204
emerging risks, 203
enforcement discretion, 200
fairness principles, 202
federal bank regulatory agencies, 187, 189
financial institutions, 187
internal audit, 204
management review of consumer complaints, 203
monitoring and examination, 196
nonbanks, 188
penalties, 199–200
Policy Statement on Deception, 186–187
Policy Statement on Unfairness, 186
preventative controls, 201–203, 206
product-based procedures, 198
products and services, 193
prudential regulators, 187
“responsible conduct,” 204–205
responsive controls, 204–205
Section 5 prohibition, 186
state laws, 200
statutory- and regulatory-based procedures, 198–199
subjectivity and uncertainty, 201
suitability rule, 191–192
suitability standard, 190
supervision and examination, 196–199
third-party providers, 195
tone from the top, 202
UDAAP program, 206
Unfair or deceptive acts or practices (UDAP), 186, 189, 191
United Kingdom—bribery and corruption, 78–81
active/passive bribery, 79
adequate procedures defense, 79
basic principles, 80–81
DPAs, 78
enforcement trends, 79–80
future trends, 80
international foreign bribery task force, 78
overview (table), 98–100
strict liability, 79
U.K. Bribery Act, 78
United States—bribery and corruption, 70–78, 98–100
accounting provisions, 72
affirmative defenses, 71
anti-bribery provisions, 70–72
collateral consequences, 74
corporate FCPA top 10 list, 77
DOJ/SEC guide, 72–73
enforcement trends, 76–78
facilitation exception, 71
factors to consider, 74
FCPA, 70
overview (table), 98–100
penalties, 73
possible DOJ/SEC resolutions, 75–76
routine governmental action, 71
whistleblower bounty program, 78
Update on Voluntary Disclosure Programmes: A Pathway to Tax Compliance, 222
U.S. v. Bankfield, 213, 218, 222
U.S. v. O’Hagan, 149
U.S. v. Winans, et al., 149
U.S. Federal Sentencing Guidelines for Organizational Defendants, 4, 24, 29–30, 73
U.S. withholding agents (USWA), 212
USA Patriot Act, 3, 101, 108, 110
Uslubas, Gurhan, 135
USWA. See U.S. withholding agents (USWA)
Volcker Rule, 22
Voluntary self-disclosure. See Disclosure protocols
Wachovia, 5
War on terror, 3–4
Waste Management, 165
Weatherford International, 4, 21, 117, 120
Wegelin & Co., 209–210
Wells Fargo, 19–20
Wheeler-Lea Act, 186
Whistleblowers, 13–15
bribery and corruption, 78, 94
China, 86
financial reporting fraud, 171
importance, 51
IRS Whistleblower Law, 15
life sciences, 240
monetary reward, 5, 14, 15, 31, 245
right of action against employers who retaliate, 5
White, Clair, 161
White, Mary Jo, 3, 8, 135, 159
Wire transfer data, 113
Woodcock, David, 173
WorldCom, 167
“Worthless services,” 229
Yara International, 12
Zakaria, Fareed, 12
Zimmerer, Richard L., 237