Article at CFO.com: When Your Compliance Program Fails

cfo.comThe steps to take when an employee comes forward with a fraud tip, whether the allegations are false or not.

By Tracy Coenen, Contributor to CFO.com

You think your company has a robust compliance program to prevent financial-statement fraud, asset misappropriation, Foreign Corrupt Practices Act violations, and other financial frauds. There are checks and balances in place, with lawyers, internal auditors, executives, and the board of directors keeping an eye on things.

Still, the unthinkable happens. Reports of a major internal fraud surface, and the scheme may involve several members of middle or upper management. The information – received through an employee’s whisper, an internal hotline, or the rumor mill – has enough substance to be deemed credible, yet not enough to know exactly who is involved, how wide-reaching the fraud may be, the amount of money stolen, or the exposure to government action and penalties.

Read moreArticle at CFO.com: When Your Compliance Program Fails

CFO Magazine: Creating a Culture of Compliance

I was recently quoted in CFO Magazine for an article on creating an ethical culture within companies. Below are a few excerpts, including my comments.

In December, the federal government cited a “lax corporate control environment” at Alcatel, which extended right up to the CEO and CFO, as a primary cause of the scandal. It was a finding that more companies should take to heart.

Nearly a decade after the passage of the Sarbanes-Oxley Act, and amid heightened FCPA enforcement, the responsibility for shaping what is often called a “culture of compliance” inside U.S. corporations falls heavily on the C-suite — and, more than ever, on the CFO.

Read moreCFO Magazine: Creating a Culture of Compliance

Dodd-Frank Whistleblower Rule Adopted by SEC Discourages Internal Reporting

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010, established a whistleblower incentive program requiring the Securities and Exchange commission to provide monetary awards to whistleblowers who come forward with information about the violation of federal securities laws, including violations of the Foreign Corrupt Practices Act (FCPA). The Act also prohibits employers from retaliating against those who provide information about securities violations.

The reward for providing information that leads to a successful enforcement action by the SEC which results in monetary sanctions over $1,000,000 can be 10% to 30% of the penalty paid.

Read moreDodd-Frank Whistleblower Rule Adopted by SEC Discourages Internal Reporting

Las Vegas Sands FCPA Investigation: What Did Management Do When they First Found Out About Allegations of Bribery and Corruption?

Earlier this week, Las Vegas Sands (NYSE:LVS) announced in its 10-K for the year ended December 31, 2010 that it is the subject of an FCPA investigation:

On February 9, 2011, LVSC received a subpoena from the Securities and Exchange Commission requesting that the Company produce documents relating to its compliance with the Foreign Corrupt Practices Act (the “FCPA”). The Company has also been advised by the Department of Justice that it is conducting a similar investigation. It is the Company’s belief that the subpoena may have emanated from allegations contained in the lawsuit filed by Steven C. Jacobs described above. The Company intends to cooperate with the investigations.

Las Vegas Sands says that it is also the target of a similar investigation by the U.S. Department of Justice.

Read moreLas Vegas Sands FCPA Investigation: What Did Management Do When they First Found Out About Allegations of Bribery and Corruption?

Financial Analysis in FCPA Cases

This week I recorded a podcast for the International Association for Asset Recovery (IAAR), which is accessible on the IAAR site. We talked a bit about where financial investigations are going, and how I am using technology to complete these investigations quicker and more effectively.

David Quinones, host of the podcast and Editorial Director for IAAR, asked how a private sector forensic accountant fits into a Foreign Corrupt Practices Act (FCPA) case.

I talked about two ways that forensic accountants and fraud investigators can be utilized:

Read moreFinancial Analysis in FCPA Cases