“Many issues in the M&A context are driven by the acquired company and usually arise due to the acquiring entity not paying enough attention during the pre-acquisition phase . . . This issue is one of the reasons the (DOJ) has put such important stock in the pre-acquisition phase so that the company needs to perform compliance due diligence and a risk assessment, which will inform the entire process.”READ HERE Part 2: Ethical Fit: What Impact Do M&As Have on Both Parties?
“Over the past few months, senior leaders at both the Department of Justice (DOJ), and Securities and Exchange Commission (SEC), have given speeches discussing the need for appropriate corporate culture around compliance. So, this brings up our first question for our next five-part blogpost series, what is corporate culture?
My colleague Eric Feldman believes “culture is everything” for an organization; culture is the foundational internal control, without which all your other controls are likely to be ineffective.
This means corporate culture is the way things really are in an organization and the way things really work.
“The size of the health care industry accounts for almost 20 percent of our economy . . . When you have lots of money being spent in an industry, there is always the potential for fraud, waste and abuse. Now, overlay this with the public money involved, and there is the potential for a False Claims Act or government action, whether civil or criminal.
Independent integrity monitoring can proactively assess compliance programs and culture and identify potential areas of compliance risk.
If you have a compliance and ethics program of any size, odds are good that you need a solution provider to help your program function fully. Manage the vendor search and relationship well, and if you’ve done yourself and your program a great service. Manage it badly, and you’ve created a nightmare.
Jay Rosen of Affiliated Monitors knows the challenge well, having been a buyer of solutions and currently as a vendor to the compliance and ethics community.
In this podcast – a preview of his session at the 2019 Compliance & Ethics Institute — he outlines how to make the vendor relationship a healthy one, beginning even before you begin a search. He advises that buyers reach out to their peers to learn what is working for them and the options in the marketplace.
In this special five-part podcast series, sponsored by Affiliated Monitors, Inc., Tom Fox visits with AMI’s Jay Rosen. In this series they introduce the role of independent integrity monitors and corporate monitorships; discuss both pre-settlement and post- resolution monitorships and their different applications; considerations a company should take in hiring a monitor and cost reflections for monitorships.. Listen to the full series below, or wherever you listen to podcasts.Day 1:
In Part 1, we introduce the role of independent integrity monitors and corporate monitorships.Day 2:
In this Episode 2, we consider the use of monitors in the post-resolution phase. Some of the highlights from this podcast include:What is a monitorship in the FCPA Context? Complying with Consent Decrees When does post-resolution monitorship have the impact of a pre-settlement monitorship?
Jay Rosen’s miniseries on suspension and debarment concludes with this look into the remedies federal agencies seek when misconduct is identified, and where the ultimate focus will lie: compliance.
The defense community largely led the process of putting together an effective ethics and compliance program. There were defense industry initiatives where the contractors got together and talked about what it takes to promote ethics and compliance; the defense industry been doing this for years. Unfortunately, nongovernmental commercial industries were not as far along as the defense industry.
read the full post here
Lately, there has been tremendous growth in the understanding that E&C is critical for any company.
Every compliance professional should be familiar with the concept of present responsibility. Jay Rosen discusses the term and its place in suspensions and debarments.
Present responsibility has become sort of a buzzword. It’s the underlying basis for action involving excluding a party from the federal marketplace through suspension or department.
Unfortunately, the phrase itself is not defined anywhere in the regulatory structure. This means its determination comes down to the discretion of the federal officials who have been empowered to exercise the suspension and debarment authority.
Yet even with this lack of a statutory or regulator definition, there are some common factors and guidelines out there that can help the compliance community understand some of the elements of suspension and debarment as they relate to this issue.
Jay Rosen, “Mr. Monitor,” explores the similarities between suspensions and debarments, as well as how the actions differ. As far as likenesses go, consider both actions the kiss of death for federal contractors.
Recalling that the GSA website states, “The Suspension and Debarment process protects the federal government from fraud, waste and abuse by using a number of tools to avoid doing business with non-responsible contractors. Suspensions, proposals for debarment and debarments are the most widely known tools as these actions are visible to the public.
A suspension is used when there is an immediate need. It is a temporary measure; there is a 12-month limit, which can be extended for another six months. A debarment is for a specific term, but generally not longer than three years.
Jay Rosen, “Mr. Monitor,” of Affiliated Monitors, continues his running series on monitorships with a sub-series on the tools the government uses to guard against fraud, waste and abuse.
The General Services Administration website states, “the suspension and debarment process protects the federal government from fraud, waste and abuse by using a number of tools to avoid doing business with non-responsible contractors. Suspensions, proposals for debarment and debarments are the most widely known tools, as these actions are visible to the public.”Government Extending its Reach
Suspension and debarment are not civil or criminal matters resulting in a penalty being imposed on a party; instead, they are an administrative matter.read the full post here
Jay Rosen concludes his exploration on issues in working with monitors by considering how lawyers can engage monitors – most typically when their clients are under investigation for some regulatory issue, such as an FCPA enforcement action.Don’t Wait Too Long
The biggest mistake outside counsel can make is waiting too long before bringing on an independent monitor.
AMI’s experience is that if you wait until after the conclusion of a matter, you have lost valuable time and potentially cost yourself money in the form of higher fines and penalties. The government expects compliance shortcomings to be remediated during the pendency of an investigation.
A monitorship can even begin before self-reporting to the government. This is because a company should want to find the problem before it voluntarily reports the problem to the government; the company could receive credit for having done so.