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Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation. In this episode, Anna Hamati, a Hughes Hubbard & Reed LLP lawyer, joins host Tom Fox to discuss the historic anti-money laundering (AML) enforcement action involving TD Bank.
Anna outlines her professional background in compliance and offers a deep dive into the top five takeaways from the extensive consent order related to the TD Bank case. These takeaways highlight key compliance failures, including inadequate resource allocation, insufficient testing and auditing, a weak culture of compliance, poor training programs, and failures in filing accurate and timely CTRs and SARs. The discussion provides critical insights and practical advice for compliance professionals seeking to improve their AML programs.
Anna underscores the importance of allocating sufficient resources to compliance functions, conducting proper testing and auditing, fostering a strong compliance culture from the top, providing comprehensive training, and ensuring the timely and accurate filing of CTRs and SARs. She illustrates the real-world implications of these compliance failures through detailed examples and offers practical guidance for banks and financial institutions to avoid similar pitfalls. This episode is a must-listen for anyone involved in AML and regulatory compliance.
Key highlights:
Overview of the TD Bank Case
Importance of Adequate Resources
Testing and Auditing
Culture of Compliance
Training Programs
Filing Timely and Accurate Reports
Resources:
Hughes Hubbard & Reed LLP Website
Anna Hamati -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, host Tom Fox is joined Mike Huneke as we explore the recently released 2024 ECCP.
In this discussion, Tom and the speaker examine the extent to which the government issues detailed guidance, advice, and settlement documents in areas of law like the Foreign Corrupt Practices Act (FCPA). The conversation reflects on historical perspectives, including a statement by an SEC commissioner from the 1980s who compared issuing guidance on the FCPA to advising on committing murders. The dialogue also touches on lessons from the Enron collapse and the dissolution of Arthur Andersen, noting the government's cautious approach to putting corporations, employees, and shareholders at risk. The speaker argues that while this guidance can be seen as helping companies avoid misconduct, ignoring or rejecting it can lead to significant legal trouble.
Key Highlights
· Introduction to ECCP
· Government's Approach to Corporate Risk
· Mike’s Top 5 Takeaways
· What does it all mean?
Resources:
Hughes Hubbard & Reed website
Mike Huneke -
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Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation. In this podcast, host Tom Fox is joined by guests Mike DeBernardis and Shayda Vance to discuss the significant case involving Austal USA, a shipbuilding company facing charges of securities fraud and obstruction of a federal audit due to the misreporting of costs for U.S. Navy ships.
The episode delves into the actions taken by the DOJ and SEC and underscores the complexities involved when senior executives are implicated in fraud and the challenges companies face in maintaining compliance and cooperation with government investigations. The conversation highlights the importance of having a robust compliance program and the critical role of the board of directors in overseeing investigations. The guests also explore the specific ramifications for government contractors and defense contractors and the significant impact of U.S. jurisdiction on foreign companies listed on American Deposit Registries. Through the lens of the Austal case, the discussion provides vital insights and lessons for compliance professionals, corporate executives, and board members.
Key Highlights
Details of the Fraud and Legal Actions
Lessons Learned and Analysis
Government Contractors and Compliance Programs
Challenges in Replacing Senior Executives
Significance of ‘Not Presently Responsible’ in Government Contracting
Implications of Listing on the American Deposit Registry
Resources:
Hughes Hubbard & Reed website -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, host Tom Fox welcomes back Tom Lee to take a deep dive in the Supreme Court’s invalidation of the Chevron deference and what it means going forward.
In this episode, special counsel Tom Lee joins the podcast to discuss the Supreme Court’s recent decision in the Loper Bright case, which overruled the long-standing Chevron deference. Lee explains the implications of this ruling on how courts interpret ambiguous statutory terms and provides insights into the decision’s grounding in the Administrative Procedure Act rather than the Constitution. He also discusses the potential impact on past cases decided under Chevron, future regulatory challenges, and the strategic considerations for companies navigating the new legal landscape. Throughout, Lee offers a thorough analysis of the evolving legal environment and its consequences for administrative law.
Key Highlights
Overview of the Loper Case and Chevron Deference
Supreme Court’s Decision and Its Implications
Consequences of Overruling Chevron Deference
Future Challenges and Legal Strategies
Administrative Procedures Act and Its Impact
Resources:
Hughes Hubbard & Reed website
Thomas Lee
HHR Client Alert-Litigation After the Demise of Chevron Deference -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, host Tom Fox welcomes back Mike Huneke to discuss the recent French election and its implications. They explore the French electoral system, potential parallels with American and English elections, and the geographical and socio-economic dichotomies within France. The conversation also delves into the impact of European enforcement policies on multinational companies, particularly in areas such as environmental governance, anti-corruption enforcement, and data privacy. They also touch on the potential influence of the upcoming Paris Olympics and new European sanctions and export control directives on future compliance and enforcement landscapes.
Key Highlights
· Understanding the French Electoral System
· Comparing French and American Electoral Dynamics
· Impact of Recent Elections on French Politics
· France's Role in European Enforcement and Governance
· Challenges in Data Privacy and Compliance
· Future Outlook
Resources:
Hughes Hubbard & Reed website
Mike Huneke -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation.
In this podcast, host Tom Fox welcomes back Mike DeBernardis to discuss recent corruption convictions involving individuals connected to Venezuela, as highlighted in Hughes Hubbard & Reed’s ‘Month in a Minute.’
We use these criminal matters as a starting point to discuss how companies can effectively manage compliance in high-risk areas by assessing risks, crafting risk management strategies, implementing specific controls, documenting processes, and training employees. We emphasize the importance of maintaining thorough documentation to meet regulatory requirements and auditing standards.
Key Highlights:
Month-in-a-Minute Overview
Compliance in High-Risk Areas
Risk Management Strategies
Documenting and Presenting Compliance
Resources:
Hughes Hubbard & Reed website
Mike DeBernardis -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, Tom Fox is joined by Jan Dunin-Wasowicz a partner at Hughes Hubbard & Reed, who is a leading figure in trade sanctions and Jeff Nielsen, International Sanctions & Export Controls Lawyer at Rambol, for a deep dive into current issues in export control and economic sanctions.
In Part 2 of a special two-part series on All Things Investigations, host Tom Fox is once again joined by Jeff Nielsen and Jan Dunin-Wasowicz to discuss trade sanctions from a global perspective. In this Part 2, Jeff and Jan provide their expertise on the EU Directive on Harmonization of Criminal Sanctions, detailing its implications and the challenges faced in its implementation across the 27 member states.
They explain the mechanics of EU sanctions, enforcement disparities among member states, and the directive's focus on setting minimum standards for criminal offenses. The conversation also delves into future outlooks on the EU's stance towards the Russian invasion of Ukraine and the evolving profession of trade sanctions compliance.
Key Highlights:
Understanding the EU Directive on Harmonization of Criminal Sanctions
Challenges and Implications of the Directive
Future of Trade Sanctions and Compliance
Career Advice for Aspiring Trade Sanction Experts
Conclusion and Final Thoughts
Resources:
Hughes Hubbard & Reed website
Jeff Nielsen on LinkedIn
Jan Dunin-Wasowicz on LinkedIn
HHR client alert on The Dawn of a New Era for EU Sanctions Enforcement? EU Adopts Directive on the Definition of Criminal Offences and Penalties for the Violation of EU Sanctions -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, I joined by Jan Dunin-Wasowicz and Jeff Nielson, International Sanctions & Export Controls Lawyer at Rambol, for a deep dive into current issues in export control and economic sanctions.
Jeff Nielsen, an American lawyer with expertise in US and European Union sanctions, currently works at a prominent Danish engineering firm, having transitioned from practicing law in the US to navigating the complexities of international sanctions. Jan Dunin‑Wasowicz, a partner at Hughes Hubbard & Reed, is a leading figure in trade sanctions, operating globally out of the Paris office. Nielsen’s perspective on trade sanctions is shaped by his direct experience with US and European Union regulations, viewing the field as dynamic, challenging, and necessitating an understanding of both legal frameworks and international relations. Similarly, Dunin-Wasowicz emphasizes the industry's complexity, dynamism, and the importance of staying informed about global affairs to anticipate risks. His work underscores the increasing role of the private sector in dealing with sanctions, highlighting the need for a proactive and adaptable approach to risk assessment in this evolving field.
Key Highlights
· Private Sector Role in Evolving Trade Sanctions
· Dynamic Compliance Strategies in Trade Regulations
· Sanctions Enforcement Disparity: EU vs US
· Global Landscape Risk Assessment in Trade Compliance
Resources:
Hughes Hubbard & Reed website
Jeff Nielsen on LinkedIn
HHR client alert on The Dawn of a New Era for EU Sanctions Enforcement? EU Adopts Directive on the Definition of Criminal Offences and Penalties for the Violation of EU Sanctions -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation.
In this episode, Tom Fox is joined by Yi-Chin Ho, who is the head of the firm’s China Practice.
Yi-Chin Ho is a seasoned legal professional and co-chair of the China Practice at Hughes Hubbard Reed, with a strong foundation in cross-border legal practice.
Ho’s perspective on cross-border legal practice, deeply embedded in her varied experiences, is based on her belief in its critical role for business growth and development, even amidst political tensions between nations such as the US and China. She underlines the importance of the symbiotic relationship between countries, emphasizing their mutual dependency on each other’s goods, services, and expertise.
Ho, a trilingual, cross-cultural lawyer, believes in finding creative solutions and providing effective counsel to navigate through challenging situations in cross-border dealings. Her culturally diverse background and proficiency in Mandarin Chinese have been instrumental in bridging gaps and facilitating successful business transactions between different countries.
Key Highlights:
Cultural Nuances in Cross-Border Business Engagement
Strategic Advisory for Cross-Border Disputes
Discovery Challenges in Cross-Border Investigations in China
Growing Preference for Chinese Arbitration Venues
Risk Assessment and Negotiation Strategies Guidance
Resources:
Hughes Hubbard & Reed website
Yi-Chin Ho -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation. In this podcast, I joined by Mike DeBernardis to mine compliance lessons from the recently announced Gunvor and Trafigura FCPA enforcement actions.
Mike DeBernardis is a seasoned professional with a comprehensive understanding of FCPA enforcement actions and compliance matters, a perspective deeply informed by his numerous client advisory roles on self-disclosure decisions related to FCPA violations and his regular participation in industry discussions.
DeBernardis believes that FCPA enforcement actions are increasingly considering past misconduct as a determinant in assigning penalties and discounts. He underscores the necessity for companies to be proactive and innovative in their remediation efforts rather than simply adhering to minimal compliance standards. He also notes a decrease in the reliance on external monitors in FCPA resolutions, potentially due to businesses taking more initiative in improving their compliance programs and directly reporting to the DOJ.
In DeBernardis’ view, the Department of Justice's approach to FCPA enforcement is dynamic and adaptive, with companies helping shape best practices through their communication with outside counsel and the DOJ itself.
Key Highlights:
Impact of Self-Disclosure on FCPA Penalties
DOJ's Quantifiable Self-Disclosure Benefits in FCPA
Cross-Regional Executives in Trafigura Bribery Scheme
Innovative Risk Mitigation Strategies in FCPA
Rewarding Compliance Efforts in Energy Trading
Resources:
Hughes Hubbard & Reed website
Mike DeBernardis -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, I joined by Hughes Hubbard Special Counsel, Thomas Lee to discuss the recent decision declaring unconstitutional the Corporate Transparency Act (CTA) in the case of NSBA v. Yellen.
Thomas Lee specializes in appellate law and constitutional issues. With nearly a decade of tenure at the firm and an impressive 21 years of teaching constitutional law at Fordham Law School, Lee is highly respected in his field. Lee and the HughesHubbard team brought the lawsuit on behalf of the National Small Business Association arguing the CTA was a constitutional over-reach, as it mandated the reporting of beneficial ownership data to combat money laundering and criminal activities. The constitutional claims included no Congressional authority for this regulation, privacy concern and lack of a foreign treaty ratified by Congress requiring the law. Drawing from his extensive background in constitutional law, they successfully argued that this federal regulation challenges traditional state regulation of entity formation and exceeds governmental power. This decision in the National Small Business Association case is a landmark case, which has now been appealed to the 11th Circuit Court of Appeals and appears headed to the US Supreme Court.
Key Highlights
· Beneficial Ownership Reporting Requirement for Entities
· Constitutional Challenges in Corporate Transparency Legislation
· Court Proceedings of the Corporate Transparency Act
· Efficient Negotiations and Potential Supreme Court Involvement
Resources:
Hughes Hubbard & Reed website
Thomas Lee -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation. In this podcast, Hughes Hubbard & Reed LLP partner Mike Huneke and I speak with Mei Li Zhen, Head of Ethics & Compliance, Commercial Operations & Subsidiaries, Airbus, about her role in the organization's compliance department.
Mei Li Zhen and Michael Huneke are two accomplished professionals with extensive backgrounds in compliance programs and company culture, having both transitioned from external counsel to in-house counsel roles at Airbus. With her experience working with diverse international backgrounds, Zhen believes that a strong, company-wide, embraced compliance program is not just about avoiding fines but is a competitive advantage that attracts young talent and gains the trust of investors and governments. She sees integrity as beneficial for the bottom line and emphasizes the importance of everyone in the organization feeling responsible for behaving with integrity. Huneke, a US-qualified lawyer working in France, shares a similar perspective. He sees a strong compliance program as a self-reinforcing cycle that attracts the right talent and enhances the business's reputation and reliability. Like Zhen, Huneke believes that compliance should permeate the entire company culture, with every employee feeling accountable for maintaining integrity in their daily activities.
Key Highlights:
Airbus' Global Commitment to Compliance and Trust
Ethics Ambassadors Shaping Airbus Compliance Culture
Enhancing Team Trust through Transparent Communication
Establishing Trust Through Empathetic Communication Practices
Ethical Compliance Leadership in the Aerospace Industry
Resources:
Hughes Hubbard & Reed LLP Website
Mei Li Zhen on LinkedIn -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation. In this podcast, I was joined by HughesHubbardReed partner Mike Huneke and Brent Carlson, Director at BRG, to discuss the concepts around their recent paper, Boards of Directors Lovin’ It after McDonald’s? A Fresh Look at Directors’ Duty of Oversight in the New Era of Sanctions & Export Control Corporate Enforcement.
Mike Huneke and Brent Carlson are seasoned professionals specializing in fraud compliance, corruption issues, sanctions, and export control enforcement. Huneke’s perspective on the duties of directors in sanctions and export controls is that boards need to be proactive and engaged in understanding and addressing these risks, emphasizing the importance of caution, skepticism, and diligence in overseeing these critical areas of compliance. His views are shaped by his experience in investigating, litigating, remediating, and preventing fraud, as well as his belief in the importance of good corporate governance and risk management. Carlson emphasizes the significance of understanding geopolitics in the context of company operations and advocates for a return to fundamental principles amidst rapid regulatory changes. His perspective is shaped by his experience in assisting companies navigate the complexities of sanctions and export controls, and his belief in the importance of boards actively engaging with management, asking questions, and ensuring thorough investigations are conducted.
Key Highlights:
Directors’ Role in Export Control Compliance
McDonald’s Case: Duty of Oversight Emphasis
Dynamic Compliance Monitoring for Export Controls
Directors’ Accountability for Compliance and Risk Management
Proactive Board Oversight for Compliance Excellence
Resources:
Hughes Hubbard & Reed website
Brent Carlson on Linkedin
This podcast is based on:
Brent & Mike’s blog post on directors’ duty of oversight can be found here: Boards of Directors Lovin’ It after McDonald’s? A Fresh Look at Directors’ Duty of Oversight in the New Era of Sanctions & Export Control Corporate Enforcement (Jan. 12, 2024).
For more on sanctions and export control compliance in the new era of FCPA-like corporate enforcement, see Brent’s and Mike’s prior posts here:
— Brent’s piece that launched the series, When Loopholes Create Liability Pitfalls: A Fresh Look at Export Controls (Aug. 25, 2023).
— How can you assess your risk of sanctions violations? Know Your Customer, But Also Yourself: A Fresh Look at Sanctions & Export Controls Risk Assessments in the Era of the “New FCPA” (Sept. 28, 2023).
— If you discover a sanctions problem, how can you efficiently investigate and remediate it? Slow is Smooth, Smooth is Fast: A Fresh Look at Planning and Executing Internal Investigations into Allegations of Sanctions or Export Controls Evasion (Oct. 30, 2023).
— What does that mean for future fines and penalties for export control evasion? From Peanuts to Prison Time – A Fresh Look at the Evolution of Export Controls Penalties (Nov. 14, 2023).
— Why is an FCPA “mindset” required for sanctions and export control compliance, and how to apply one? The Blind Men and the Elephant (Dec. 18, 2023). -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast, All Things Investigation. In this podcast, I joined HughesHubbardReed partner Kevin Carroll to take a deep dive into the DC Court of Appeals opinion on the immunity claim of Citizen Trump.
Kevin Carroll's perspective on the percussive opinion on Trump's immunity doctrine claims is that it was a significant and positive development for democracy. Carroll expresses satisfaction with the unanimous opinion and believes that it comprehensively addresses the issues at stake. His understanding of the resolution of Bill Clinton's special counsel case further reinforces his belief that former presidents can be held criminally liable for conduct committed in office. He also emphasizes the importance of the opinion being written in a way that is understandable to non-lawyers and the weight of the per curium nature of the opinion, indicating that all three judges signed it, making it difficult to challenge or dismiss any part of it.
Join Tom Fox and Kevin Carroll on this episode of All Things Investigation to delve deeper into this topic.
Key Highlights:
Unified and Authorless Judicial Decisions
Expiration and Integration of Presidential Terms
Influence and Binding of the Opinion
The Crucial Role of the Appeal Process
Wither the Mandate?
Resources:
Hughes Hubbard & Reed website
Kevin Carroll on LinkedIn -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, I joined by HughesHubbardReed partner Mike DeBernardis to discuss the recently announced FCPA enforcement action involving SAP.
Mike DeBernardis is a seasoned expert in the field of FCPA enforcement, with a specific focus on the SAP enforcement action and the critical role of compliance programs. Drawing from his extensive knowledge of corruption schemes in various countries and the role of third-party intermediaries in these activities, DeBernardis views the SAP enforcement action as a pivotal case study that underscores the importance of robust compliance programs and proactive remedial actions. He commends SAP for their significant investment in their compliance program and their willingness to alter their business practices, such as severing certain third-party relationships and high-risk conduct. DeBernardis believes these actions reflect a commitment to business integrity and serve as a valuable lesson for companies navigating complex investigations. Join Tom Fox and Mike DeBernardis as they delve deeper into this topic on this episode of All Things Investigations.
Key Highlights
· SAP's Corrupt Third-Party Intermediaries and Enforcement Action
· The Power of Cooperation and Remediation
· DOJ's Emphasis on Cooperation and Technology
Resources:
Hughes Hubbard & Reed website
Mike DeBernardis on LinkedIn -
Welcome to the Hughes Hubbard Anti-Corruption & Internal Investigations Practice Group’s podcast All Things Investigation. In this podcast, I joined by HughesHubbardReed partner Kevin Carroll as we continue to review the various indictments against former President Trump. In this episode we look at the oral argument in the DC Court of Appeals immunity defense appeal.
Kevin Carroll, a professional in the field of investigation and law, brings his expertise to the podcast "All Things Investigation" with Tom Fox. Carroll's perspective on the topic of Trump's immunity claims and military officers' constitutional oath is shaped by his deep understanding of the various Trump lawsuits and his military background. He believes that military officers have a strong commitment to upholding their constitutional oath, distinguishing them from oppressive organizations like the SS or the Soviet KGB. Carroll also expresses concern about the potential harm caused by the irresponsible behavior of former President Trump and his lawyers. Join Tom Fox and Kevin Carroll on this episode of the All Things Investigation podcast for more insights into these topics.
Key Highlights
Trump's Absolute Immunity Claims and Criticisms
The Significance of the Constitutional Oath
Ongoing Lawsuits and National Security Proceedings
Resources:
Hughes Hubbard & Reed website
Kevin Carroll on LinkedIn -
Today’s episode of All Things Investigations is a deep dive into the 2023 FCPA Alert with Tom Fox, Laura Perkins, and Kevin Abikoff from Hughes Hubbard and Reed. They unravel the complexities of the latest updates in anti-corruption laws, focusing on the impact these changes have on companies in the U.S. and abroad. They share a detailed analysis of the current anti-corruption enforcement landscape practical advice for navigating these legal waters, and how we can draw inspiration from a rock and roll great.
Laura Perkins and Kevin Abikoff, from Hughes Hubbard’s Anti-Corruption and Internal Investigations Practice Group, join Tom Fox in this episode. Laura Perkins is the former Assistant Chief for FCPA enforcement at the DOJ, and Kevin Abikoff is a prominent attorney specializing in compliance, anti-corruption law, and internal investigations. Their combined insights provide a unique perspective on the challenges and strategies in compliance and anti-corruption, crucial for businesses operating globally.
In this episode, you’ll hear Tom, Laura, and Kevin discuss:
Why the FCPA Alerts from Hughes, Hubbard, and Reed always start with a quote from a popular artist – this year’s from Jimmy Buffet: “Go fast enough to get there but slow enough to see.”
The guidance that was originally issued in 2021 has evolved as the Department of Justice gains experience with the policies and how they want companies to follow them.
Empowering compliance officers who are on the front lines of protecting companies and shareholders, and how doing so is ultimately good for business.
What it can mean for companies to self-report to the DOJ and whether or not all of the implications have been considered.
For years, the DOJ has been talking about compliance incentives, repercussions, and compensation, and this year, they have taken it a step further by allowing companies to benefit via reductions in fines based on their efforts to bring repercussions to individuals involved in misconduct.
Company boards are obliged to exercise business judgment, which includes taking into account financial repercussions or pursuing bad actors. The new guidance may open the floodgates for private plaintiffs to sue boards that do not.
Lessons learned from specific enforcement actions from DPA’s, NPA’s, and Declinations, specifically the Ericsson and ABB resolution.
The scope of anti-bribery and anti-corruption enforcement outside of the US, looking at France, Brazil, and China.
A growing number of countries are entering the sphere of FCPA enforcement actions in the US and elsewhere.
Resources
Hughes Hubbard & Reed website
Laura Perkins on LinkedIn
Kevin Abikoff on LinkedIn
Tom Fox
Instagram
Facebook
YouTube
Twitter
LinkedIn -
This episode of All Things Investigations explores the recent EU Corporate Sustainability Due Diligence Directive that could transform compliance programs and corporate governance globally. Tom Fox and Nicolas Tollet analyze the Directive's provisions mandating human rights and environmental risk management across company value chains. Nicolas explains how the law builds on France's pioneering 2017 Duty of Care legislation and its impact on corporate accountability for both EU and non-EU multinationals.
Nicolas Tollet is a Partner at Hughes Hubbard. He previously served as Vice President for Compliance at Technip, an oil and gas service firm. With over 20 years of experience in compliance and internal investigations, he has worked on significant cases like Alcatel, TSKJ, and Lava Jato. Nicolas has expertise in monitorships, having been involved in the first one imposed on a French company by the DOJ and the SEC. He helps companies worldwide with compliance programs, audits, and M&A due diligence.
You’ll hear Tom and Nicolas discuss:
The new EU Directive on Corporate Sustainability Due Diligence will require companies above certain revenue thresholds to implement human rights and environmental compliance programs, not just for their operations but across their entire value chain.
France has been at the forefront of such legislation with its 2017 Duty of Care law. The EU directive builds on this, with more expansive requirements and penalties of up to 5% of worldwide turnover for non-compliance.
The directive explicitly links human rights risks to corruption risks, recognizing their interconnection. It has the potential to drive even broader risk coverage than typical anti-bribery programs.
By mandating due diligence across the value chain, the directive will necessitate contract terms like audit rights as standard procedure. Financial institutions may also need to evaluate the human rights impacts of clients they fund.
The directive allows each EU country to determine how to specifically transpose and enforce the law's obligations. This could lead to a complex web of overlapping inspection regimes applied to multinationals.
Even companies not based in the EU will fall under the law if they meet certain revenue thresholds in Europe. Non-EU companies should tap French expertise since France is about 6 years ahead in implementing similar mandates.
Required public sustainability reporting adds another layer reinforcing the need for concrete compliance actions.
While the US led historically on anti-corruption compliance, the EU is now at the vanguard of expanding into human rights, environment, and sustainability. France in particular has established itself as a leader in advancing corporate compliance expectations.
KEY QUOTES:
“There is a direct link within the directive between human rights compliance and anti-corruption compliance, which the compliance community in the world has been seeing for years now.” - Nicolas Tollet
“So we shouldn't expect one member state to be reluctant to enforce the legislation. The EU will make sure that every member state issue and then enforce the legislation in each country.” - Nicolas Tollet
“Fortunately, we are still linked in how we work in the business field, and we have to take both into account. So there is a certain pride indeed, because there is real expertise in France now on compliance, but it's mixed between the French and the American compliance community, I would say. So it's working together that we've managed to improve compliance.” - Nicolas Tollet
Resources:
Hughes Hubbard & Reed website
Nicolas Tollet on LinkedIn
EU Directive on Corporate Sustainability Due Diligence: Navigating the New Landscape of Corporate Accountability -
How can companies effectively remediate after uncovering misconduct? In this episode of All Things Investigations, Tom Fox discusses with Mike DeBernardis the lessons learned from the recent Albemarle FCPA enforcement action and settlement. They analyze the company's self-disclosure timeline, the credit received for holdbacks, and the overall cooperation and remediation efforts that led to a favorable NPA.
Mike DeBernardis is a partner in Hughes Hubbard’s Washington office and a member of the firm’s Anti-Corruption and Internal Investigations and White Collar & Regulatory Defense practice groups. He assists clients with internal investigations relating to high-stakes matters, including corruption under the Foreign Corrupt Practices Act, procurement fraud, financial and accounting fraud, money laundering, and other ethics issues and violations of company policy.
You’ll hear Tom and Mike discuss:
The DOJ deemed Albemarle's self-disclosure untimely, even though it was voluntary and unknown to the government. The 16-month delay from learning of allegations to disclosing crossed the line per updated standards.
Companies should carefully evaluate timing when self-disclosing misconduct if they want to maximize credit. Even voluntary disclosures can be considered untimely under an evolving reasonableness standard.
Albemarle discovered allegations in Vietnam in 2016, confirmed misconduct in early 2017, and then disclosed in January 2018 when FCPA Corporate Enforcement Policy permanence was still uncertain.
$780,000 in total bonuses were held back from employees directly involved, those with supervisory responsibility, and other relevant staff. Albemarle received a full 1:1 penalty offset.
Contractual ability to withhold bonus payments is easier to execute than clawbacks of compensation already disbursed, especially across regions.
Settlement dynamics were shifting during Albemarle's decision timeline, but current standards still applied for judging timeliness. Pandemic delays also won't change future judgments.
The egregiousness and duration of Albemarle's schemes across multiple countries involving high-level executives would typically warrant a DPA or plea deal. Their cooperation and remediation directly led to the NPA result.
Albemarle thoroughly investigated, cooperated, remediated, and self-disclosed even though the misconduct was not yet government-known. This approach clearly benefited them.
Implementing data analytics was called out in the settlement documents specifically. Even basic initial steps were still recognized and rewarded by the DOJ.
Resources
Hughes Hubbard & Reed website
Mike DeBernardis on LinkedIn -
How can companies adequately prepare for the DOJ's aggressive new deadlines for M&A disclosures? In this episode of All Things Investigations, Tom Fox discusses the implications of the DOJ's new M&A Safe Harbor policy with Mike Huneke. They explore best practices for meeting the 6-month and 1-year deadlines, how to approach pre-acquisition due diligence, and whether this policy will lead to more or fewer disclosures.
Mike Huneke is a partner in Hughes Hubbard & Reed’s Washington office. He advises clients on the navigation and resolution of multi-jurisdictional criminal or Multilateral Development Bank (MDB) anti-corruption investigations. He also assists companies subject to post-resolution monitorships or other commitments and designs and executes risk-based strategies for due diligence on third parties.
You’ll hear Tom and Mike discuss:
The 6-month post-closing deadline to disclose is extremely quick for large, complex companies. Compliance teams need to get involved very early in the M&A process to spot potential issues adequately.
Sellers must also prepare for more scrutiny from buyers under this policy. They should proactively assess compliance programs in their portfolio companies, anticipate buyer due diligence questions, and address any issues to maximize sale value.
The policy's criminal liability focus means boards and senior execs must now approve disclosures. This may lead to more hesitation in disclosing, as companies lose the ability to "test run" disclosures.
Companies must apply an "anti-corruption mindset" to issues like sanctions and export controls now that those areas have potential criminal penalties. Cross-train compliance and trade professionals to instill this mindset.
Pre-acquisition due diligence should identify the root causes of any issues so companies can prioritize remediation post-close. Have a detailed, documented integration plan ready.
Managing investigations and remediation simultaneously with tight deadlines will be challenging. A strong tone from the top will be crucial for integration.
It is unclear if other agencies like the SEC will follow the DOJ's approach. Disclosers may hesitate if issues span multiple regulators.
Overall, the policy adds certainty around timelines, though meeting them will be difficult. It forces compliance to have a seat at the M&A table.
KEY QUOTES
“And so the more that things are criminal and the larger the penalties, the more you're going to have boards get involved, the more you're going to need very senior management to be involved. And that may result in just more hesitation to make a voluntary disclosure…” - Mike Huneke.
“So sellers should be looking at this and anticipating that there will be more questions from buyers and more questions from buyers’ counsel.” - Mike Huneke.
“So identifying the root cause is absolutely the key and then realistically you're not going to be able to integrate an entire company into your compliance program in one year. Make sure you have a plan that's well documented and based on the due diligence for prioritizing what's coming in first.” - Mike Huneke.
Resources
Hughes Hubbard & Reed website
Mike Huneke on LinkedIn - Mehr anzeigen
