BFCSA: Analysis and remediation of underlying misconduct: Bankers & Small Business Loans

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This is what all these banking inquiries are all about and the guide being used....too coincidental to not be...Kate Carnell had the powers to demand documents and did...

Elliott said Colin Neave was not hired to deal with consumer complaints but this ..

.the DOJ will review aspects of a company’s policies and procedures

http://www.nortonrosefulbright.com/knowledge/publications/146878/doj-issues-compliance-guidance#_ftn1

Summary of topics

1. Analysis and remediation of underlying misconduct: The DOJ may ask about the root cause of the misconduct, whether or not there were any prior indications that the misconduct was occurring, and what the company has done to help resolve the misconduct.
2. Senior and middle management: The DOJ continues to emphasize the “tone at the top” and evaluates whether senior management and the board of directors encourage and instill a culture of compliance, including their own background and how senior management and the board interact with compliance.
3. Autonomy and resources: The DOJ wants to ensure that the compliance department is provided with adequate resources and funds to effectively mitigate risk, including whether the compliance department has sufficient autonomy and power, whether compliance personnel have appropriate experience and qualifications, and the compliance department’s “stature” in the company.
4. Policies and procedures: As the backbone of any compliance program, the DOJ will review aspects of a company’s policies and procedures, including its design and accessibility and how well it is integrated in the overall operations.
5. Risk assessment: The DOJ expects companies to have a rational and appropriate methodology for identifying, analyzing, and addressing their individualized risk profiles.
6. Training and communications: To ensure that a compliance program is not simply a “paper program”, the DOJ will review whether employees receive training commensurate with the risk associated with their responsibilities and in the appropriate language and form, and what resources are available in addition to specific trainings.
7. Confidential reporting and investigation: The DOJ may ask about a company’s procedure for receiving, handling and managing whistleblower reports, including how it collects and analyzes confidentially reported information to properly scope an investigation.
8. Incentives and disciplinary measures: The DOJ may question a company about how it incentivizes compliance and disciplines employees for misconduct, including whether managers were held accountable for misconduct that occurred under their supervision. Further, the DOJ may look into whether these disciplinary actions were applied consistently and across all groups.
9. Continuous improvement, periodic testing, and review: A company should be ready to discuss how it reviews and assesses the compliance program on an ongoing basis, including what, if any, internal audits or reports were conducted, how those were reported to management, and what is the company’s process to continually monitor the compliance program.
10. Third party management: Because the DOJ views third party relationships as being high risk, it will likelyrequest information about how a company manages third-party relationships from a corruption standpoint. This includes what controls are present and how the relationship is managed on an ongoing basis.
11. Mergers and acquisitions: Companies can often inherit corruption issues through mergers and acquisitions. When relevant, the DOJ may request information about the due diligence process and integration and implementation following the transaction.

from...........http://www.nortonrosefulbright.com/knowledge/publications/138645/doj-launches-pilot-program-for-fcpa-cases

Full cooperation

Many of the pilot program’s requirements for full cooperation are not surprising, such as the need to preserve, collect and disclose relevant documents, and to provide the DOJ with timely updates. Not all of the requirements, however, are so straightforward. For example, full cooperation entails, among other things:

• Identifying opportunities for the DOJ to obtain relevant evidence that is not in the company’s possession and that the DOJ does not otherwise know about;
• Providing all facts relevant to potential criminal conduct by all third-parties, including high level officers and employees and other companies;
• Making available company officers and employees who may possess relevant information for DOJ interviews, including those employees located overseas and former employees (subject to the individuals’ Fifth Amendment rights);
• Disclosing overseas documents, the location of the documents, and who found the documents;
• Facilitating third parties to produce documents and witness from foreign jurisdictions; and
• When required, providing translations of relevant documents in a foreign language.

If the company believes that it is impossible to comply with any of the pilot program’s requirements, such as the existence of conflicting foreign laws, the company has the burden of proving that impossibility. The DOJ will “closely evaluate the validity” of any such claims.

Benefits of program

A company that meets each of the three requirements (voluntary self-disclosure, cooperation, remediation) may receive a 50% reduction from the bottom of the Sentencing Guidelines fine range and may not be required to appoint an independent monitor. Further, even if a company does not meet the requirements for voluntarily self-disclosure, but nevertheless fully cooperates and adopts appropriate and timely remediation, the company can still qualify for up to a 25% reduction from the bottom of the Sentencing Guidelines range