WhistleBlower Security - Blog

Best Buy Chairman to Resign After Probe

MIGUEL BUSTILLO — Tue, 15 May 2012 14:18:37 -0700

Report Says Schulze Didn't Tell Board of Allegations About Ex-CEO Dunn

Best Buy Co. BBY -2.25% founder Richard Schulze will step down as chairman next month after an internal probe found that he didn't alert other directors that his handpicked successor as chief executive, Brian Dunn, was allegedly having an inappropriate relationship with a female employee.

The slumping electronics retailer disclosed that its board-supervised investigation into Mr. Dunn concluded he engaged in an "extremely close personal relationship" with a 29-year-old subordinate that "negatively impacted the work environment," though it found no evidence that he misused company assets.

Allegations about Mr. Dunn first came to the attention of Mr. Schulze last December, when an unnamed company executive provided the chairman with a "written statement" from another employee, according to the board's report on its investigation.

But Mr. Schulze didn't pass along the information to the board's audit committee, the panel charged with overseeing ethical transgressions. Instead, he confronted the CEO, who "adamantly denied" he was having a relationship with a subordinate, the report found.

"I understand and accept the findings of the audit committee," Mr. Schulze, 71, said in a statement released by the company.

Mr. Dunn, 51, resigned last month after the board began probing his conduct. He hasn't spoken publicly about the allegations and couldn't be reached for comment.

His resignation has left the Richfield, Minn., retailer without a leader as it struggles to reinvent itself amid strong competition from Apple Inc.'s AAPL -0.90% namesake stores and online merchants such as Amazon.com Inc. AMZN +0.65%

Mike Mikan, a former health-care executive who has served on Best Buy's board since 2008, is serving as interim CEO while directors look for a permanent replacement, a process that the company estimates could take until early next year.

Analysts reacted positively to the news that Mr. Schulze was relinquishing his chairmanship, calling it the start of a new era for the retailer. "Now there will be no old-school decision-makers in charge," said David Strasser of Janney Montgomery Scott. READ MORE...

AIG exCEO Greenberg eyes reversing NY fraud case

Jonathan Stempel — Tue, 15 May 2012 10:39:04 -0700

(Reuters) - Former American International Group Inc Chief Executive Maurice "Hank" Greenberg said New York's attorney general should be barred from invoking a 91-year-old state law in a fraud case over two suspect reinsurance transactions.

Greenberg and co-defendant Howard Smith, AIG's former chief financial officer, sought permission on Monday to appeal to the state's highest court, the Court of Appeals, a May 8 appellate ruling letting Attorney General Eric Schneiderman pursue civil fraud claims against them under the state's Martin Act.

That ruling by the Manhattan appeals court cleared the way for the 7-year-old case to go to trial.

Investigators claim a transaction with General Re Corp, a unit of Warren Buffett's Berkshire Hathaway Inc, helped AIG inflate loss reserves by $500 million without transferring risk, while a transaction with Capco Reinsurance Co helped AIG hide more $200 million of losses. Both transactions took place more than a decade ago. READ MORE...

Canadian Securities Regulators Impose New Rules on OTC Issuers

Corporate Finance & Securities Group at Clark Wilson — Tue, 15 May 2012 10:27:15 -0700

Effective July 31, 2012, all jurisdictions in Canada other than Ontario will follow B.C.'s lead and commence imposing new disclosures and other requirements on companies whose only trading market is over the counter in the United States under the new Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets (the "OTC Rule"). Most of the rules about to be imposed across Canada already exist in British Columbia under BCI 51-509.

The OTC Rule applies to any OTC issuer that has a significant connection to a local Canadian jurisdiction that has adopted the OTC Rule. Under the OTC Rule, an OTC issuer is an issuer whose securities are quoted on any U.S. over the counter market unless the issuer is also listed or quoted on the TSX Venture Exchange, the TSX, the Canadian National Stock Exchange, the Alpha Exchange, the New York Stock Exchange, the NYSE Amex, or the NASDAQ Stock Market. An OTC reporting issuer also includes an issuer if trades in its securities are reported in the grey market.

Under the OTC Rule, an OTC issuer has a significant connection to a Canadian jurisdiction if

it is directed or administered or promotional activities are conducted in or from the jurisdiction, in whole or in part; or
it distributed securities in a Canadian jurisdiction prior to obtaining a ticker-symbol for the purpose of having its securities quoted on an over-the-counter market in the U.S. and those securities became the issuer's OTC-quoted securities.

The OTC Rule applies to an OTC issuer when the U.S. Financial Industry Regulatory Authority (FINRA) assigns a ticker symbol to a class of its securities so that trades in those securities may be reported. Once an OTC issuer becomes an OTC reporting issuer under the OTC Rule, the OTC Rule will continue to apply to it for at least one year. After that, the OTC Rule applies only if the issuer is directed or administered or carries out promotional activities in or from a jurisdiction of Canada. In Québec, an OTC reporting issuer will have to apply for a decision to revoke its reporting issuer status.

Disclosure Requirements

Under the OTC Rule, OTC reporting issuers must:

meet the same periodic disclosure requirements imposed on other domestic reporting issuers under National Instrument 51-102 Continuous Disclosure Obligations, including an annual information form (AIF), management's discussion and analysis (MD&A), and audited financial statements;
comply with Canadian timely disclosure requirements; and
file their public disclosure on SEDAR.

Other than the requirement to file an AIF, OTC reporting issuers are treated as venture issuers, as defined in National Instrument 51-102 Continuous Disclosure Obligations. OTC reporting issuers that are SEC filers – issuers that file disclosure with the United States Securities and Exchange Commission – can comply with the OTC Rule's requirements to file financial statements, material change reports, MD&A and AIFs using documents they file with the SEC. READ MORE...

Webinar Neglected Saving the Small Business from Occupational Fraud

ACFE — Thu, 10 May 2012 15:15:05 -0700

May 31, 2012 at 2:00 PM EDT

Level: Specialized
Duration: 100 minutes
CPE Credits: 2

It is estimated that small business employees make up 52% of the work force in the United States yet continue to rank the highest in occupational fraud frequency. Through this webinar, obtain a realistic view along with the impact fraud has on small businesses and how you can help lower those risks. Learn about current statistics, cases in the news, their impact and outcome, and the presenter's current fraud investigations, as well as how you can provide an affordable solution with effective prevention programs. Small businesses don't need to suffer the catastrophic financial impact that employee theft causes; they need to know there are resources and professionals available to help protect them.

What You Will Learn:

Warning signs of small business frauds
Small business employee theft triangle
Partnership embezzlement
Common problems in small business fraud investigations
Resources for prevention programs

Who Should Attend:

Small business owners
Persons interested in building fraud examination practices
Persons investigating money laundering
Fraud examiners / Fraud investigators
Fraud prevention professionals
Risk management professionals
Managers
Auditors
Loss prevention specialists
CFE's and professionals interested in investigating fraud

REGISTER HERE: http://webinars.acfe.com/session.php?id=8942

Speaker: Julie A. Aydlott, CFE

Business Fraud Prevention, LLC

REGISTER HERE: http://webinars.acfe.com/session.php?id=8942

Yahoo Director Who Headed CEO Search Committee to Stand Down

MICHAEL J. DE LA MERCED and EVELYN M. RUSLI — Tue, 08 May 2012 15:38:38 -0700

2:42 p.m. | Updated with Yahoo committee announcement

Patti S. Hart, the Yahoo director who headed the board search committee that picked Scott Thompson as the company’s chief executive, will not stand for re-election, a person briefed on the matter told DealBook on Tuesday.

Ms. Hart’s departure is the first significant response by Yahoo amid the growing controversy over misstatements about Mr. Thompson’s academic record.

The company also announced on Tuesday that it has formed a three-member board committee to investigate Mr. Thompson’s hiring and how erroneous academic information appeared in official company documents and on its Web site.

The three-person committee, which has already begun work, is led by Alfred Amoroso and includes Thomas McInerney and John Hayes; the three directors have all been named to the board within the last three months.

Yahoo’s board also named Terry Bird of the law firm Bird, Marella, Boxer, Wolpert, Nessim, Drooks and Licenberg as the special committee’s independent counsel.

Before last Thursday, Mr. Thompson’s biography said he had earned both accounting and computer science degrees from Stonehill College in Massachusetts. After prodding by the hedge fund Third Point last week, Yahoo conceded that Mr. Thompson had earned only an accounting degree.

The committee is also trying to determine whether Mr. Thompson or others knew of the mistake before it was revealed by Third Point. Ms. Hart has been heavily scrutinized for her role in leading the search committee.

Ms. Hart’s biographical information also misstated her academic credentials, saying she had a degree in marketing and economics when it was in business administration.

On Monday, Third Point demanded Yahoo’s records related to the search that culminated in Mr. Thompson’s hiring. Later that day, Mr. Thompson e-mailed Yahoo employees, apologizing for the trouble the controversy has brought upon the company. READ MORE...

Regulators Seek Plan B on Money Funds

ANDREW ACKERMAN And VICTORIA MCGRANE — Mon, 07 May 2012 15:47:01 -0700

WASHINGTON—Federal regulators are increasingly worried that the Securities and Exchange Commission could fail to complete more-stringent rules on money-market mutual funds, forcing officials to confront how else to rein in the $2.6 trillion industry.

While financial regulators would prefer the SEC to act on its own, some officials behind the scenes have started to investigate whether the Financial Stability Oversight Council, a special panel created by the 2010 Dodd-Frank financial overhaul, could act if the SEC can't agree on a proposal to shore up funds or reduce risk, according to people familiar with the situation. No formal discussion of FSOC action has taken place, the people said.

Money funds, which invest in short-term, high-quality securities are like banks in that they provide households and businesses with a place to park their cash. Unlike banks, however, money funds aren't subject to capital requirements, deposit insurance or formal supervision, which Federal Reserve and Treasury officials fear makes them susceptible to panics. When Lehman Brothers collapsed in 2008, it triggered losses in one called the Reserve Fund, which held Lehman debt, sparking a rush for the exit in money-market funds. The Treasury Department backstopped the industry as investors fled, but Congress has stripped the agency from using those powers again.

Regulators' consideration of alternatives comes as the SEC has met internal and external snags in its efforts to complete a proposal aimed at reducing both money funds' vulnerability to credit shocks and investor incentives to flee the funds at the first sign of trouble. SEC Chairman Mary Schapiro has directed the campaign, which comes on top of an initial round of rule-tightening for the funds in 2010. Her proposals would limit investors' ability to sell all their funds immediately or change how the funds are priced.

The SEC's efforts have run up against resistance from the industry, which has turned to Congress for support in its fight. More than two dozen Republican and Democratic lawmakers recently warned Ms. Schaprio to ditch her plan even before she publicly unveiled it. The Senate Banking Committee is considering holding a hearing, and the SEC proposals would likely come under attack.

"Investors are telling us loud and clear that any of the SEC's concepts—floating the funds, requiring capital buffers, or imposing asset freezes—will drive them out of money-market funds and essentially kill the product," said Karrie McMillan, general counsel for the Investment Company Institute, an industry trade group at the forefront of the fight. READ MORE...

Chesapeake Energy McClendon under US SEC probe

Anna Driver; Editing by Dale Hudson, Bernard Orr — Mon, 07 May 2012 11:03:03 -0700

(Reuters) - Chesapeake Energy Corp said on Thursday the company and Chesapeake Energy Corp are under scrutiny by the U.S. Securities and Exchange Commission as part of an informal inquiry.

Reuters first reported last week that regulators in the agency's Fort Worth office were looking into a controversial program that grants McClendon a share in each of the wells Chesapeake drills.

Chesapeake did not specify what regulators were examining but said the company and McClendon were asked to retain certain documents, Chesapeake said in a statement.

News of the SEC probe followed the Reuters report that McClendon had borrowed as much as $1.1 billion against his minority share of company wells granted to him under a corporate perk called the Founders Well Participation Program. READ MORE...

Ninth Circuit Narrows Computer Fraud and Abuse Act Reach

David Navetta — Mon, 07 May 2012 10:19:34 -0700

The legal and online arenas have been abuzz the recently in response to the Ninth Circuit's issued en banc opinion in U.S v. Nosal, 2012 WL 1176119 (9th Cir. April 10, 2012), addressing the reach and scope of the oft-litigated and controversial, Computer Fraud and Abuse Act (CFAA), codified at 18 U.S.C. § 1030.

The crux of the broader interest in the case has been recent applications of the CFAA criminalizing violations of website terms of use and employer restrictions on employee computer uses, stemming in particular from what the statute’s term “exceeds authorized access” does and does not mean.

What’s the bottomline? What do you need to know about the case’s holding to apply to and recognize in your employee policies, website terms, etc.?

First, the case does not hold in my opinion, as one learned colleague has opined, that “employees are [now] free to steal from [] company computers.” Far from it. After all, as the Court noted Nosal was indicted on “twenty counts, including trade secret theft, [the ever popular count of] mail fraud, [and] conspiracy,” which charges remain pending, in addition to the now dismissed criminal violations of the CFAA.

It’s simply not accurate to state the floodgates have opened wide for employees to run riot without penalty through every database, spreadsheet and confidential piece of information their employer has on hand.

Second, the majority’s clear opinion, penned by one of the Ninth’s most colorful judges, Alex Kozinski, applies the rule of lenity to decide between the two possible readings of the applicable language, resulting in a a bright-line boundary – at least for those in the Ninth Circuit – that the CFAA does "not extend to violations of [website and company policy] use restrictions” and that the CFAA’s “exceeds authorized access” requirement is limited to “violations of restrictions on access to information, and not restrictions on its use.”

What’s peaked further attention is that the Ninth Circuit’s en banc opinion re-affirms the district court’s dismissal of the CFAA counts, replacing the previous Ninth Circuit panel’s 2-1 opinion filed nearly a year ago, which reversed the district court’s dismissal of the CFAA counts, and sets up a clear circuit split of those Courts of Appeal to have opined on the issues with the Ninth on one side and the Fifth, Seventh and Eleventh Circuits on the other side, priming the pump for potential resolution by the Supreme Court.

Until then, however, the takeaways are:

It should not be assumed that violations of employee handbooks, confidentiality agreements and data access restrictions as to “use” of a computer system will rise to the level of a federal crime;

Many other federal and state civil – and criminal – statutes provide adequate remedies in the event employees or others misappropriate company materials;

The CFAA is not a rubber hammer, stretching to fit the head of every nail that a plaintiff or prosecutor wants to hammer; and

Finally, while companies and their attorneys, certainly in Circuits outside of the Ninth will continue to press and make claims that violations of ToU’s and company policies run criminally afoul of the CFAA, they make, in my sole individual opinion expressly not reflective nor representative of the opinions of either my firm or our clients, such claims are typically contrary to the law as generally understood by the populace at large. At such, I believe they do needless violence to the fraying social contract we all abide by, as well as, the increasingly tenuous legal fiction that all of us are charged with constructive knowledge of all laws.

For those needing to “get in, get out and get on” the above capsule should be enough. But for Nosal and CFAA aficionados and fans, of which I’m one, more detailed information and a collection of Nosal-related links discussing the Ninth’s en banc opinion are available below. READ MORE...

Third Point Yahoo CEO faked educational record

Poornima Gupta — Mon, 07 May 2012 09:32:37 -0700

(Reuters) - Activist hedge fund Third Point on Thursday accused Yahoo Inc's new chief executive, Scott Thompson, of padding his educational record, and Yahoo called the discrepancy an "inadvertent error."

Thompson claims to hold a bachelor's degree in accounting and computer science from Stonehill College near Boston but he "embellished his academic credentials," as the CEO's degree is in accounting only, Third Point's founder and chief executive, Dan Loeb, wrote in a letter to Yahoo's board on Thursday.

"Stonehill College informed us that it did not begin awarding computer science degrees until 1983 - four years after Mr. Thompson graduated," Loeb said. Third Point is a large Yahoo investor that has publicly battled the Internet company's board in the past.

A Yahoo spokesman called the discrepancy an "inadvertent error."

"Scott Thompson received a bachelor of science degree in business administration with a major in accounting from Stonehill college," the spokesman said in an emailed statement. "There was an inadvertent error that stated Mr. Thompson also holds a degree in computer science."

Yahoo reiterated its confidence in its CEO, saying he is a "highly qualified executive with a successful track record leading large consumer technology companies."

The letter represents the latest salvo from Third Point, whose 5.8 percent stake in Yahoo ranks it among the company's largest institutional shareholders. Third Point has sharply criticized Yahoo's performance and strategy in the past. READ MORE...

US raises criminal stakes in Mizuho probe

Kara Scannell in New York — Fri, 04 May 2012 10:00:14 -0700

US prosecutors are raising the possibility of criminal liability tied to the financial crisis as they investigate a $1.6bn mortgage-linked security sold by a unit of Mizuho Financial Group, the Japanese bank.

People familiar with the matter say the US attorney’s office in Manhattan and the Federal Bureau of Investigation are leading the criminal investigation into the sale of the security known as Delphinus CDO 2007-1.

The investigation has been under way for months and authorities have conducted interviews in recent weeks, said one person familiar with the matter.

People familiar with the investigation say it may not result in any criminal charges. Prosecutors would need to show that someone intentionally broke the law or was “wilfully blind”.

The US attorney’s office declined to comment.

One challenge investigators face if they are to prove any intent is that the deals were often reviewed by teams of lawyers.

The probe is related to a civil investigation under way by the Securities and Exchange Commission, which in September warned Standard & Poor’s that it might file civil charges against the rating agency in connection with the security.

S&P said the SEC’s claims “have no basis and they will be vigorously defended”. It declined to comment on the criminal probe. READ MORE...

Two former NFL firstround picks nabbed in FBI sting

Jon Burstein, Sun Sentinel — Thu, 03 May 2012 09:54:59 -0700

Two former NFL first-round draft picks were busted in an FBI sting designed to catch crooks committing the hottest financial crime in South Florida — tax refund fraud, federal authorities announced Tuesday.

William Joseph, once a standout defensive tackle at the University of Miami, cashed fraudulently obtained tax refund checks at a North Miami financial services store opened by the FBI and wired for audio and video surveillance, according to federal court documents.

He later brought his former Oakland Raiders teammate Michael A. Bennett to the store, where Bennett lied about having $9 million in the bank so he could obtain a $200,000 loan, federal authorities said. Bennett, who had a 10-year career as an NFL running back, faces a count of wire fraud.

In addition to the two ex-NFL players, six other people were arrested in the sting, including Louis Gachelin, a former star defensive lineman at Miami Jackson High and half-brother of Denver Broncos player Elvis Dumervil. Gachelin played for Syracuse University and had a stint in the NFL Europe.

Federal prosecutors said that during the three-month undercover operation, people came into the FBI-run business to cash about $500,000 in fraudulently obtained tax refund checks. Any money the customers received came from official FBI funds and none of the checks were actually cashed, court records show.

"Organized criminals are stealing $5 billion and more by fraudulently claiming tax refunds," said John Gillies, the FBI's special agent in charge of the agency's Miami office. "Without proper safeguards, identity theft tax fraud has become a growing epidemic. The FBI is proactively going undercover to fight the fraud, but unfortunately today's arrests are just the tip of the iceberg."

The Broward Sheriff's Office and the Palm Beach County Sheriff's Office have been flooded with more than 1,000 tax-related identity theft reports apiece the past few months. The complaints mirror the nationwide explosion in such fraud, with total complaints jumping almost five-fold from 52,000 in 2008 to nearly 250,000 in 2010, according to the U.S. Government Accountability Office. READ MORE...

Mexico regulators to vote on $1 billion fine vs tycoon Slim

Cyntia Barrera — Tue, 01 May 2012 13:38:13 -0700

(Reuters) - Regulators are due to vote on Monday on one of Mexico's biggest antitrust cases, a $1 billion fine for tycoon Carlos Slim, which has been bogged down in court appeals and disputes for a year.

Federal competition commission Cofeco slapped Telcel, the cash cow of Slim's giant telecoms company America Movil, with the record sanction in April 2011 after ruling the company charged excessive prices to wireless and wireline competitors to connect to its network.

Telcel appealed the fine and even managed to ban Cofeco's President Eduardo Perez Motta from taking part in a second vote, where the agency will decide if it ratifies, drops or modifies the fine against Slim, the world's richest man.

Perez Motta got into trouble last year with comments he made about the agency's crackdown on Telcel.

The Slim company complained of unfair treatment by Cofeco's chief regulator, filing a motion that cut Perez Motta out of that second vote, which was originally expected in September.

Getting Slim to pay such a large sum would be a major victory for Cofeco, whose ability to enforce the rules in a country where many major industries are concentrated in the hands of a few powerful families is seen as weak.

Cofeco "must ratify last year's fine to Telcel due to multiple violations to the competition law by engaging in monopolistic practices on interconnection," IDET, a telecommunications think-tank based in Mexico City, said in a written statement to Reuters on Sunday.

A loss, or a significantly reduced fine for Telcel, would strengthen the view that regulators in Mexico lack enough muscle to reign in the massive influence of businessmen like Slim.

"Any possible changes should be based on facts unknown at the time of imposing the fine and Cofeco is required to explain the reasoning," IDET added.

In a bizarre twist on Sunday, Cofeco's website was hacked. Instead of the agency's home page opening, the image of scowling green pirate skull with a cutlass in its teeth appeared on a black screen beneath the words "Hacked by Nob0dy." READ MORE...

Canada Foreign Takeovers Dewey Probe Brazil Compliance

Finance Minister Jim Flaherty — Mon, 30 Apr 2012 13:05:57 -0700

Canada plans to change its foreign takeover legislation to make reviews more transparent as it seeks to assure business the country remains open to investment.

The changes, introduced April 26 as part of a budget bill, will allow the industry minister to publicly explain why an acquisition has been blocked as long as the information doesn’t cause harm to the businesses involved, Industry Canada said in a news release April 27.

Prime Minister Stephen Harper is seeking to strengthen investor confidence in the review process amid criticism the system is unpredictable, after his government rejected a hostile takeover bid for Potash Corp. of Saskatchewan Inc. by BHP Billiton Ltd (BHP) in 2010. Harper has said that decision stemmed from unique circumstances.

Under Canada’s foreign-takeover law, known as the Investment Canada Act, the government reviews foreign takeovers valued at more than C$330 million ($336 million) in assets to ensure the transaction represents a “net benefit’ to the nation.

Canada’s system for weighing takeovers is ‘‘highly subjective and unpredictable,” the Toronto-based C.D. Howe Institute said in a study released in December. The rules may have contributed to the decline in Canada’s share of global foreign-direct investment, it said.

The changes will allow the government to disclose when the industry minister has sent a preliminary notice to an investor that that an acquisition isn’t a “net benefit” to the country. The department also said the changes will allow the minister to “accept security” for payment of any court-ordered penalties for contravention of the Investment Canada Act by investors.

The amendments are included in a bill introduced April 26 by Finance Minister Jim Flaherty to implement measures in the March 29 budget.

Compliance Policy

Money Market Funds May Face Tougher Regulation in IOSCO Plan

Global regulators are weighing tougher rules for money market funds over concerns that they may amplify future financial crises.

“Confidence shocks” in such funds can “quickly have a broader macroeconomic impact,” the International Organization of Securities Commissions said in a document published April 27 on its website.

Options being considered by regulators include imposing stricter liquidity requirements on money market funds, and reducing their reliance on credit ratings, IOSCO said.

IOSCO, based in Madrid, is seeking views on the plans until May 28. READ MORE...

Former Morgan Stanley star in China pleads guilty

Thu, 26 Apr 2012 11:24:30 -0700

(Reuters) - A former Morgan Stanley executive pleaded guilty to conspiring to evade internal controls required by a U.S. anti-bribery law, in a case that underlines the fall of a once high-flying dealmaker for the firm in China.

Garth Peterson, who was a managing director in Morgan Stanley's real estate investment and fund advisory business, also settled on Wednesday related charges with securities regulators, and agreed to roughly $3.7 million in sanctions and a permanent bar from the industry.

Peterson secretly arranged to have millions paid to himself and a Chinese official and disguised the payments as finder's fees charged to Morgan Stanley, regulators said.

Such payments violated the Foreign Corrupt Practices Act, which bars bribes to officials of foreign governments, the Securities and Exchange Commission said.

The charges come as both the SEC and the Justice Department have stepped up efforts to enforce the FCPA, extracting billions of dollars in penalties in recent years, but the case is among the first related to the financial services industry.

Morgan Stanley, which cooperated in the government's investigation, was not charged in the case. Lawyers for Peterson declined to comment.

"Mr. Peterson admitted today that he actively sought to evade Morgan Stanley's internal controls in an effort to enrich himself and a Chinese government official," Assistant Attorney General Lanny Breuer said in a statement announcing the plea.

Morgan Stanley spokesman Matt Burkhard said the firm was pleased the matter was resolved.

"We cooperated fully with the government and we are very satisfied with this outcome," Burkhard said. "Mr. Peterson's intentional circumvention of Morgan Stanley's internal controls was a deliberate and egregious violation of our values and policies."

Peterson, who is scheduled to be sentenced on July 17, faces up to five years in prison. READ MORE...

Ofcom escalates probe into BSkyB

Salamander Davoudi, Media Correspondent — Thu, 26 Apr 2012 11:11:24 -0700

Rupert Murdoch was facing a mounting threat to his UK media business on Thursday as Ofcom escalated its probe into whether British Sky Broadcasting was a “fit and proper” owner of a broadcasting licence from a “monitoring phase” to an “evidence-gathering phase”.

The broadcasting regulator has asked News Corp’s News Group Newspapers subsidiary – parent company of The Sun and the now-defunct News of the World – to provide it with a series of documents in relation to the civil litigation that the media company is confronting in the courts.

“Ofcom is gathering evidence which may assist it in assessing whether BSkyB is and remains fit and proper to continue to hold its broadcast licences,” the regulator said when asked whether it had made contact with Mr Murdoch’s UK newspaper business.

Until now the regulator has been monitoring all the publicly available evidence – such as select committee evidence, the Leveson inquiry and newspaper reports – relating to the phone-hacking scandal. However, it is now calling for documents that are not in the public domain as it escalates its probe.

Ofcom said it had contacted News Group Newspapers requesting documents “which it understands are held by the company and which may be relevant to this assessment.” BSkyB is also party to the correspondence, the regulator said,

On the day that Mr Murdoch finished a 10-hour grilling from the Leveson inquiry into the phone-hacking scandal, the regulator also said it would ask all “relevant parties” for evidence.

It added that it would not be providing “a running commentary” to its investigation.

NGN is the parent company that published the News of the World. READ MORE...

WalMart appoints global antibribery watchdog

Brad Dorfman — Wed, 25 Apr 2012 14:26:19 -0700

(Reuters) - Wal-Mart Stores Inc (WMT.N) said on Tuesday it has appointed a global officer to oversee compliance with a U.S. law that forbids bribes to foreign officials as it grapples with a bribery scandal that has led to more than $10 billion being cut from its market value.

The move is one of the steps the world's largest retailer has taken in the past year to manage issues related to the U.S. Foreign Corrupt Practices Act (FCPA), a 1970s law that forbids bribing foreign officials.

Wal-Mart shares closed 3 percent lower, adding to declines from Monday that wiped $10 billion from the company's market value.

Wal-Mart spokesman David Tovar declined to say when the post was created or who was named to fill it. The person appointed will report to the general counsel for Wal-Mart's international unit.

On Saturday, the New York Times reported that a senior Wal-Mart lawyer received an email from a former executive at Wal-Mart de Mexico (WALMEXV.MX) in September 2005 that described how the Mexican affiliate, known as Walmex, had paid bribes to obtain permits to build stores in the country.

According to the Times, Wal-Mart sent investigators to Mexico City and found a paper trail of suspect payments totaling more than $24 million. But the company's leaders shut down the probe and did not notify U.S. or Mexican law enforcement officials until after the newspaper informed Wal-Mart it was looking into the issue, the Times reported.

The lawyer also identified Eduardo Castro-Wright as the driving force behind years of bribery. Castro-Wright became CEO of Walmex in 2003 and moved on to other senior roles with the company. He is set to retire on July 1.

On Tuesday, MetLife Inc (MET.N), the largest U.S. life insurer, said Castro-Wright had resigned from that company's board.

"Over the past weekend, I notified you of recent events that will require my immediate and personal attention," Castro-Wright said in a letter to MetLife CEO Steve Kandarian, a copy of which was filed with securities regulators.

"Accordingly, I now must focus my energy in spending personal time with my family and in protecting my good name and business reputation," he added at the end of the letter.

Castro-Wright could not be reached for comment. READ MORE...

Fraud lawsuit survives over Goldmans Abacus CDO

Grant McCool — Wed, 25 Apr 2012 13:55:41 -0700

(Reuters) - Goldman Sachs Group Inc (GS.N) must defend fraud claims brought by a bond insurance company over its notorious Abacus mortgage product deal, a New York state judge ruled, but she decided that the investment bank did not unjustly enrich itself.

In a lawsuit last year, ACA Financial Guaranty Corp accused Wall Street's most influential investment bank of financially inducing it to provide insurance for Abacus 2007-ACI - a synthetic collateralized debt obligation (CDO). Goldman settled with the top U.S. market regulator in 2010 over the same CDO transaction for $550 million without admitting wrongdoing.

New York State Supreme Court Justice Barbara Kapnick said in a written decision made public on Tuesday: "that portion of Goldman Sachs's motion seeking to dismiss the first two causes of action for fraudulent inducement and fraudulent concealment are denied."

ACA's "third cause of action for unjust enrichment is dismissed" the judge said in her ruling dated April 23.

A spokesman for Goldman Sachs, Michael DuVally, declined to comment on the decision. ACA is no longer writing new insurance policies. It is collecting premiums and paying claims on existing policies until they expire.

Two years ago, the U.S. Securities and Exchange Commission sued Goldman and a vice president of the firm, Fabrice Tourre, over the Abacus CDO, accusing them of failing to tell investors the Paulson & Co hedge fund helped choose and bet against the subprime residential mortgage backed securities underlying Abacus.

The SEC cases against Tourre is continuing in Manhattan federal court. The regulator accuses him of misleading ACA Management LLC, a third party with experience in analyzing credit risk in residential mortgage-backed securities, that Paulson's hedge fund was an equity investor.

ACA Financial Guaranty said in its lawsuit that the CDO was designed to fail so that Paulson could reap "huge profits" and Goldman Sachs could reap "huge fees."

It said Goldman deceived ACA into believing that Paulson was to be the long investor in the product when the bank knew he would take a short position.

Kapnick wrote that ACA Financial Guaranty Corp's complaint "certainly contains a 'rational basis' to infer that Goldman Sachs intentionally misled ACA from its silence in the face of ACA's manifest detrimental reliance on its mistaken belief that Paulson was on the same side of the transaction as it was." READ MORE...

Exclusive SEC probes movie studios over dealings in China

Aruna Viswanatha — Wed, 25 Apr 2012 11:31:31 -0700

(Reuters) - U.S. regulators are investigating major U.S. movie studios' dealings with China as the entertainment companies try to get a greater foothold in one of the fastest-growing movie markets in the world.

The Securities and Exchange Commission has sent letters of inquiry to at least five movie studios in the past two months, including News Corp's 20th Century Fox, Disney, and DreamWorks Animation, a person familiar with the matter said.

The letters ask for information about potential inappropriate payments and how the companies dealt with certain government officials in China, said the person, who was not authorized to speak publicly about the letters.

The Chinese film market is seen as one of the largest potential markets for Hollywood, but it has also historically been tightly controlled by the state-owned China Film Group.

China Film Group had limited foreign films to 20 per year, but it eased some control in February of this year, after China's leader-in-waiting Xi Jinping, who is known to admire some American movies, spent a week in Washington.

Vice President Joe Biden and U.S. Trade Representative Ron Kirk hailed the deal, which allows 14 premium format films, such as IMAX or 3D, to be exempt from the quota, as will the 2D versions of the films.

Also in February, DreamWorks Animation announced a landmark deal of its own in which it will build a production studio in Shanghai with some of China's biggest media companies.

DreamWorks Animation found success in China last year with "Kung Fu Panda 2," which became the highest-grossing animated movie in China with ticket sales of about $100 million.

China Film Group did not respond to repeated requests for comment. Representatives of DreamWorks, Disney, and News Corp declined to comment.

A spokesman for the SEC declined to comment. READ MORE...

US charges exBP engineer obstructed spill probe

Bruce Nichols — Wed, 25 Apr 2012 09:34:35 -0700

(Reuters) - A former BP Plc engineer was arrested and charged on Tuesday with intentionally destroying evidence related to how much oil was spilling from the company's broken well in the Gulf of Mexico in April 2010, the U.S. Justice Department said.

Kurt Mix, 50, was accused of deleting text messages between himself and a supervisor that included "sensitive internal BP information collected in real-time" as BP tried to stop the leak, the Justice Department said.

During his first court appearance in Houston on Tuesday, he told U.S. Magistrate Stephen Smith in a firm voice that he understood the charges against him.

Mix, of Katy, Texas, about 25 miles west of Houston, was charged with two counts of obstruction of justice for allegedly deleting records related to the amount of oil flowing from the Macondo well after the blowout. If convicted, he faces a maximum of 10 years in prison and a $250,000 fine for each count.

He was released on $100,000 bond on Tuesday. His next court appearance was scheduled for May 3 in New Orleans, where the case is filed. He surrendered his passport, and his travel was restricted to Texas and Louisiana.

The spill was found after BP's troublesome Macondo deepwater well blew out, causing deadly explosions aboard Transocean's Deepwater Horizon drilling rig that killed 11 men and sank the rig.

The biggest offshore oil spill in U.S. history spewed more than 4 million barrels of oil into the basin before BP capped it in mid-July 2010. The company killed the well two months later.

Mix, a drilling and completions engineer for BP before he resigned in January this year, worked on various efforts to stop the leak, including a "top kill" that involved pumping heavy mud into the ruptured well to try to push back the oil. READ MORE...

Construction Company Admits Fraud Scheme

By WILLIAM K. RASHBAUM — Tue, 24 Apr 2012 10:59:35 -0700

The giant construction company that worked on the Sept. 11 Memorial and Citi Field projects has admitted to a massive fraud scheme and agreed to pay $50 million in fines and restitution in a deal to avoid criminal charges for overbilling on scores of public and private projects, according to federal court documents unsealed on Tuesday.

The company, which changed its name from Bovis Lend Lease to Lend Lease after a fatal fire during its demolition of the Deutsche Bank building, will not be prosecuted criminally as a result of the agreement with federal prosecutors in Brooklyn, who say it is the largest construction fraud settlement ever in New York City. The man who led the company until the investigation was disclosed in 2009 and was one of the most prominent construction executives in the city, pleaded guilty to fraud charges on Tuesday in United States District Court in Brooklyn.

At the heart of the overbilling scheme is a practice that investigators contend – and that many construction executives concede — is widespread, so much so that it has a name: eight plus two. It is the practice of paying labor foremen for two hours of overtime that they do not work each day as an incentive to stay on a construction project. READ MORE...

Walmart investigates claims of coverup over $24m in Mexican bribes

Guardian News and Media Limited — Mon, 23 Apr 2012 14:38:37 -0700

New York Times claims the retailer's senior executives hushed up an internal report into bribery allegations.

Walmart is investigating claims that its executives hushed up an internal report that found it paid $24m (£14.8m) in bribes to Mexican officials.
The world's largest retailer said it was aggressively looking into allegations that it bribed officials in virtually every corner of Mexico as it fought to build up its empire in the country.

The New York Times claimed that senior Walmart executives, including the CEO, Michael Duke, were made aware of the bribery claims in 2005 but hushed up an internal investigation by a former FBI special agent.
The bribes were allegedly paid to middlemen to speed up planning permission applications for the construction of new stores across Mexico, its fastest-growing market, where it employs 209,000 people.

In a confidential report to his superiors, the former FBI agent who was Walmart's lead investigator – who has not been named – said: "There is reasonable suspicion to believe that Mexican and US laws have been violated." He called on Walmart executives to launch a wider inquiry, but bosses at the company's US headquarters suppressed the report.

Lee Scott, Walmart's then CEO, is said to have rebuked internal investigators for being overly aggressive, according to the New York Times report. Neither the US nor Mexican authorities were informed of the allegations, which could fall foul of the US foreign corrupt practices act (FCPA).

The company, which owns Asda in the UK, said it had recently admitted the allegations to both the US justice department and the Securities and Exchange Commission and warned its shareholders of the potential fallout. READ MORE...

Special Report Chesapeake CEO took $11 billion in shrouded personal loans

Anna Driver and Brian Grow — Wed, 18 Apr 2012 12:13:58 -0700

(Reuters) - Aubrey K. McClendon is one of the most successful energy entrepreneurs of recent decades. But he hasn't always proved popular with shareholders of the company he co-founded, Chesapeake Energy Corp., the second-largest natural gas producer in the United States.

McClendon, 52, helped cause Chesapeake shares to plummet amid the financial crisis when he sold hundreds of millions of dollars in stock to raise cash for himself. Later, to settle a lawsuit by shareholders, he agreed to buy back a $12 million map collection that he'd sold to Chesapeake.

His approach to running his company also is renowned: Among other employee perks, on-site Botox treatments are available at its headquarters in Oklahoma City, Oklahoma.

Now, a series of previously undisclosed loans to McClendon could once again put Chesapeake's CEO and shareholders at odds.

McClendon has borrowed as much as $1.1 billion in the last three years by pledging his stake in the company's oil and natural gas wells as collateral, documents reviewed by Reuters show.

The loans were made through three companies controlled by McClendon that list Chesapeake's headquarters as their address. The money is being used to help finance what could be a lucrative perk of his job - the opportunity to buy into the very same well stakes that he is using as collateral for the borrowings.

The size and nature of the loans raise concerns about whether McClendon's personal financial deals could compromise his fiduciary duty to Chesapeake investors, according to more than a dozen academics, analysts and attorneys who reviewed the loan agreements for Reuters. READ MORE...

UK auditing watchdog plans tougher penalties

Reuters — Wed, 18 Apr 2012 11:27:25 -0700

* Watchdog moving to fines based on turnover, income

* New cases in pipeline likely to face new fines regime

(Reuters) - Britain's auditing watchdog unveiled draft guidelines on Wednesday for imposing "credible" fines after top auditor PricewaterhouseCoopers (PwC) escaped earlier this year with a relatively light penalty.

The Financial Reporting Council's accountancy and actuarial discipline board (AADB) said past fines were no longer an adequate benchmark for maintaining public confidence.

It fined PwC, one of the world's "Big Four" auditing firms, 1.4 million pounds in January for wrongly telling local regulators for seven years that JPMorgan Securities was keeping client money safe.

Although a record fine, it was a fraction of PwC's gross revenue which topped $29 billion in its financial year to end-June 2011.

The present system is prone to haggling by companies at tribunal over the size of fines imposed, which are typically based on the severity of penalties handed out in the industry previously.

Policymakers are also questioning why auditors gave banks a clean bill of health just before many had to be rescued with taxpayer money in the 2008-09 global financial crisis.

The AADB said it wants the new guidance in place quickly as there are a number of disciplinary cases coming up. A public consultation will end July 11.

"The time is right for a genuine debate about the appropriate level of sanction for professional misconduct by accountants," AADB Chairman Timothy Walker said in a statement. READ MORE...

City Official Said to Misuse $30 Million

MARK PETERS — Wed, 18 Apr 2012 10:46:15 -0700

Federal authorities arrested the comptroller of a small city in Illinois on Tuesday, saying she used more than $30 million in municipal funds to live a lifestyle that included a horse farm, a convertible and a $2.1 million motor home.

Rita Crundwell was charged with one count of wire fraud. The 58-year-old has been the comptroller of Dixon, Ill., since the early 1980s. In the role, she oversaw all finances for the city, which is best known as the boyhood home of Ronald Reagan.

A lawyer for Ms. Crundwell didn't return a call seeking comment, and no one answered the phone at a number listed in Dixon under Ms. Crundwell's name.

Ms. Crundwell, over a nearly six-year period, paid out more than $30 million from a city account for her personal and business expenses, according to the U.S. Attorney for the Northern District of Illinois.

A federal court filing describes Ms. Crundwell as living a "luxurious lifestyle" that included a horse farm with stables for 150 horses. Federal officials said she used city funds to purchase the 2009 Liberty Coach motor home, several trucks and trailers, and a Ford Thunderbird convertible. Ms. Crundwell has an annual salary as comptroller of $80,000. READ MORE...

Quebec construction tycoon Antonio Accurso arrested in anticorruption raid

INGRID PERITZ AND DANIEL LEBLANC — Tue, 17 Apr 2012 13:30:56 -0700

Quebec’s anti-corruption unit carried out a series of raids and arrested high-profile construction magnate Antonio Accurso in an early-morning police operation north of Montreal on Tuesday.

It’s being billed as the first major sweep by the year-old corruption-fighting squad known under its acronym UPAC.

Provincial police made 14 arrests while a 15th suspect, the mayor of the city of Mascouche, is expected to return from Cuba to face charges including fraud and municipal corruption.

In all, police have filed 47 charges ranging from fraud and breach of trust to conspiracy and corruption.

The results come after a year-and-a-half long investigation that began when two witnesses stepped forward to provide information about the awarding of contracts in the fast-growing municipality of Mascouche, north of Montreal, police said.

The investigation led police “to establish that a system had been put into place a few years ago allowing certain companies to gain an advantage toward the attribution of lucrative municipal contracts,” Sûreté du Québec Lieutenant Guy Lapointe told reporters at a press conference.

“Everyone arrested today (allegedly) had a role in this system, whether they were on the receiving end or the giving end,” Lt. Lapointe said. “But in the end, it comes down to a very simple, “You give something, and you get something in return.”

The police operation began before dawn and involved about 120 officers, who carried out raids at locations in Terrebonne, Mascouche and Laval, municipalities north of Montreal.

Mr. Accurso was arrested and taken into custody at about 6 a.m. All suspects are being released with a promise to appear in court at a later date, police say.

News reports have linked Mascouche Mayor Richard Marcotte with a local developer who received $40 million in city contracts; the entrepreneur reportedly carried out renovations at the mayor’s home.

Mr. Accurso has been at the heart of controversies in Quebec’s construction industry and municipal politics in recent years, in large part after high-profile politicians and union leaders vacationed on his luxury yacht. READ MORE...

UK sentences exgovernor of Nigerias Delta State to 13 years for fraud money laundering

Associated Press — Tue, 17 Apr 2012 11:50:10 -0700

LONDON — A former governor of Nigeria’s oil-rich Delta state was sentenced in Britain on Tuesday to 13 years in prison for fraud and money-laundering, capping a spectacular fall from flashy political kingmaker to convict.

The sentencing of James Ibori in London culminated years of probes both in London and his native Nigeria, where the ex-governor once held great political sway. But it ultimately took Britain, Nigeria’s former colonial ruler, to imprison a corrupt politician from the West African nation where graft dominates politics.

“You turned yourself in short order into a multimillionaire through corruption and theft in your powerful position as Delta state governor,” Judge Anthony Pitts said in his ruling at Southwark Crown Court.

Ibori stood accused of stealing $250 million from the public purse and funneling much of the stolen funds to banks in England to fund a lavish lifestyle of private jets and luxury cars. He pleaded guilty in February to fraud and money-laundering sums of approximately 50 million pounds ($79 million).

“During his two terms as governor of Delta State, James Ibori deliberately and systematically defrauded the people whose interests he had been elected to represent,” Britain’s Crown Prosecution Service said in a statement after the sentencing. “Very significant cooperation was secured from many countries worldwide to enable us to bring this prosecution.”

Ibori held great political power in Nigeria before leaving his gubernatorial office. He was a kingmaker in the People’s Democratic Party, the ruling political force in Nigeria since the country became an uneasy democracy in 1999 after years of military rule.

The ex-governor’s guilty pleas in London capped an inquiry which began in association with Nigerian anti-corruption investigators in 2005. Ibori was immune from prosecution in Nigeria between 1999 and 2007, when he was serving as governor of Delta state, police said. READ MORE...

Litigation Netherlands

International Law Office - Robert Verburg at Clifford Chance LLP — Tue, 17 Apr 2012 09:55:21 -0700

The Supreme Court recently handed down an important ruling in the Van Hees qq/Y case on the possibility to reclaim money from investors involved in a classic Ponzi scheme - a scheme in which money from new investors is used to fund (fictitious) profits for other investors.

Background

Mr Van den Berg set up a Ponzi scheme that was uncovered in 2005. He was declared bankrupt, convicted for fraud and jailed for five years. He had defrauded some 1,400 investors of a total amount of approximately €85 million.

As in any Ponzi scheme, Van den Berg's scheme created winners as well as losers. The bankruptcy trustee sought to claw back the profits that one of the investors had made (as a trial case) on behalf of, among others, the defrauded investors.

The defendant had entered into loan agreements with Van den Berg for approximately €1.4 million. The interest rates of the loan agreements varied, but included rates of 33.33%, 50% and 80%. The bankruptcy trustee sought to claw back approximately €1 million.

The bankruptcy trustee claimed that the payments:

were based on void agreements because of breaches of mandatory laws (the Securities Transactions (Supervision) Act and the Credit System (Supervision) Act, now both replaced by the Financial Supervision Act);
were void as they were contrary to good morals because of the exorbitant interest rates; and
resulted in the unjust enrichment of the defendant.

Both the district court and the Court of Appeal denied the bankruptcy trustee's claim. The Supreme Court upheld these rulings (although with a different reasoning on the issue of unjust enrichment).

Loan agreements valid despite act breaches

In principle, agreements that violate a mandatory statutory provision are void unless the relevant statutory provision does not purport to invalidate the agreement. The current Financial Supervision Act stipulates that, unless otherwise stated, legal acts that breach the act are valid. This rule was not contained explicitly in preceeding acts. However, the Supreme Court found – under reference to the parliamentary history of Article 1:23 of the Financial Supervision Act – that the same exception applied to the credit and securities supervision acts.

Agreements not contrary to good morals

The Supreme Court confirmed the Court of Appeal's ruling that the alleged disproportionate interest rates as such were insufficient grounds on which to rule that the underlying agreements were void. If there were additional circumstances (eg, the fact that the agreements formed part of a fraudulent scheme) and the investor had been or should have been aware of Van den Berg's immoral intentions (the high interest rates alone were insufficient for this), the conclusion would have been different. The Court of Appeal had found, however, that the investor acted in good faith. The Supreme Court upheld this decision.

Is the investor unjustifiably enriched? READ MORE...

New phishing scam targets military users DFAS warns

Kevin McCaney — Tue, 17 Apr 2012 09:37:01 -0700

A new phishing campaign is targeting military service members, retirees and civilian employees receiving disability compensation, the Defense Finance and Accounting Service warns.

The e-mail scam dangles the prospect of additional disability compensation in an effort to get recipients to give up their personal information, according to a post on DFAS' website, which urged anyone receiving such an e-mail not to respond to it.

The e-mails, which appear to come from a DFAS employee, display a spoofed .mil e-mail address and say that recipients of disability compensation from the Veterans Affairs Department could also be eligible to get money from the IRS, DFAS said. The phishing scam asks recipients to submit their VA award letters, income tax returns, 1099-R forms and other documents to a supposed retired colonel in Florida. READ MORE...

ExSynergy Brands Chief Charged in $26 Million Bank Fraud

Mon, 16 Apr 2012 09:46:23 -0700

The former head of Synergy Brands Inc. (SYBRQ) (SYBRQ), a bankrupt baking mixes and spices company in Syosset, New York, was charged with a fraud that led to a $26 million loss for New York-based Signature Bank (SBNY) (SBNY).

Mair Faibish, 52, Synergy’s former chief executive officer, was arrested today and pleaded not guilty in federal court in Brooklyn, New York. The fraud arose from a check-kiting scheme meant to inflate Synergy’s sales, according to a statement from U.S. Attorney Loretta E. Lynch in Brooklyn. Faibish defrauded both Signature and McLean, Virginia-based Capital One Financial Corp. (COF) (COF), according to the indictment.

“The defendant allegedly defrauded an FDIC-insured bank out of millions of dollars through a massive check-kiting scheme, as well as fraudulently inflated Synergy’s financial statements in order to make the struggling company appear prosperous,” Lynch said in the statement.

Synergy Brands filed a Chapter 7 liquidation petition in January 2011 in Central Islip, New York. The petition listed assets of $21.7 million and debt totaling $44.7 million. The company was delisted from the Nasdaq in December 2008.

‘Complicated Transactions’

“These were complicated transactions and I think when comprehended it’ll be clear that they were not fraudulent,”Faibish’s lawyer, Bradley Simon of Simon & Partners LLP in Manhattan, said after the court hearing. “After it’s fully understood, we’ll be able to show that it’s not what the government alleges it is.”

Faibish kited about $750 million worth of checks not backed by sufficient funds through banks in the U.S. and Canada, according to the indictment. He had those checks deposited into accounts of associated food makers and distributors in Canada, which then sent checks in corresponding amounts back to Synergy in the U.S., prosecutors said.

Because the funds were immediately available, they artificially inflated Synergy’s bank balances. READ MORE...

Best Buy Probes CEO Relationship

MIGUEL BUSTILLO, JOANN S. LUBLIN and ANN ZIMMERMAN — Fri, 13 Apr 2012 12:07:23 -0700

Best Buy Co.'s BBY -0.56% investigation into the personal conduct of former Chief Executive Brian Dunn is exploring whether he misused company assets in the course of an alleged relationship with a female subordinate, people familiar with the matter said.

The electronics retailer declined to discuss any details of its continuing investigation Thursday, saying it planned a full airing of its findings once the inquiry by the board's audit committee is complete.

Best Buy declined to disclose whether the woman, a 29-year-old who worked in a leadership training institute at the company's Richfield, Minn., headquarters, was still employed by the company, or to detail her exact duties. As of Thursday, her Facebook page still listed her as a member of the company network.

The woman in question declined to speak to The Wall Street Journal, which reached her through her family. Her parents declined to comment.

But a person close to her said the incidents that led to complaints to the board were "something small that people blew out of proportion."

Best Buy declined to comment on that assertion. "The board's findings will be made public and appropriate action will be taken if warranted," said Greg Hitt, an outside public-relations consultant who is acting as spokesman for the board.

Mr. Dunn, who is 51 years old and married, couldn't be reached for comment Thursday. He resigned from the company on Monday, culminating a 28-year-career that began as a salesman on the store floor, amid what the company described late Tuesday as a probe into his personal conduct instigated by complaints to the board.

The audit committee tapped high-powered legal talent more than a week ago to help investigate the allegations, according to a person familiar with the situation. It is using William R. McLucas, a former enforcement chief of the Securities and Exchange Commission, and Thomas L. Strickland, who, like Mr. McLucas, is a partner at Wilmer Cutler Pickering Hale & Dorr LLP in Washington, D.C. Best Buy directors hired the law firm "within a day or two" after they got wind of complaints concerning Mr. Dunn, another person close to the situation said. READ MORE...

RCMP searches SNCLavalin headquarters

Ross Marowits — Fri, 13 Apr 2012 11:35:24 -0700

MONTREAL – RCMP investigators were executing a search warrant Friday at the Montreal headquarters of embattled engineering giant SNC-Lavalin, which has been searching for millions of dollars of mysterious payments.

The global construction and engineering company said the police action relates to an investigation of some former employees.

“The company is co-operating fully with all investigations regarding this or any other matters and intends to respond to all requests from the authorities,” spokeswoman Leslie Quinton said in a news release.

The Montreal-based company said last month that it planned to inform police and other authorities about the results of an internal investigation into US$56 million of payments that resulted in the departure of its CEO and two other senior executives.

Chief executive Pierre Duhaime stepped aside after a probe revealed he signed off on payments to undisclosed agents on two large projects, breaching the company’s code of ethics.

SNC-Lavalin (TSX:SNC) has refused to indicate the whereabouts of the projects involved, or rule out if they included construction projects in Canada.

However, the company has said that it didn’t believe the payments in question were related to its operations in Libya. SNC was one of the major Canadian companies doing business in the North African country prior to the fall of Moammar Gadhafi last year.

Duhaime, 57, is slated to receive nearly $5 million as a golden handshake severance package after he was relieved of his duties.

He will remain an SNC employee until June 27 but will not have any responsibilities or perform any policy-making decisions, the Montreal-based company said in a regulatory filing ahead of its May annual meeting.

SNC-Lavalin has said Duhaime co-operated with its internal investigation, but couldn’t provide details of the payments. Investigators believe those details are known by two former senior employees, including one who has since left the country.

Executive vice-president of construction, Riadh Ben Aissa and vice-president of finance Stephane Roy, parted ways with the company after the board said their conduct had recently been questioned. Their departure coincided with the February launch of a board investigation into $35 million in questionable payments.

The company said Aissa — who did not co-operate with the investigation — authorized the signing of agreements for the projects, which were improperly documented.

It said Aissa “is believed to have significant knowledge about most of the investigated transactions, but has not been met despite a request to his counsel.” He is believed to have left Canada, possibly for Tunisia.

SNC added that Roy may also have knowledge, but he has not been interviewed since prior to his dismissal in February.

It’s not the first time that SNC’s offices have been raided by the RCMP. READ MORE...

Exclusive SEC Goldman to settle research case for $22 million sources

Sarah N. Lynch and Aruna Viswanatha — Thu, 12 Apr 2012 13:29:04 -0700

(Reuters) - U.S. securities regulators are preparing to announce that Goldman Sachs will pay $22 million to settle allegations the bank did not have adequate policies to prevent research from being passed inappropriately to preferred clients, people familiar with the matter said on Wednesday.

The Securities and Exchange Commission's case against Goldman is expected to be similar to one that the bank settled last year with Massachusetts securities regulators, several sources told Reuters.

The $22 million penalty will resolve charges by both the SEC and the Financial Industry Regulatory Authority, which self-polices the brokerage industry, these people said.

Sources spoke anonymously because the settlement has not yet been made public.

The settlement could be announced as early as Thursday, though the SEC agreed to the terms of the settlement a few weeks ago, several of those people said.

Both an SEC spokesman and a Goldman Sachs spokesman declined to comment. READ MORE...

Insight Energy regulators in new push to quash manipulation

Scott DiSavino and Jonathan Leff — Thu, 12 Apr 2012 13:19:30 -0700

(Reuters) - Emboldened energy market regulators are mounting an aggressive new campaign to stamp out a once-common trading practice that crosses physical and paper markets, unnerving traders who fear a backlash over years-old deals.

Away from the contentious debate over Dodd-Frank derivative market reforms that followed the 2008 financial crisis, this new battle takes place in the gray area separating cash markets for commodities like crude oil and power from the swaps or futures contracts that are tied to those prices.

While many companies legitimately trade in both markets, often to hedge their positions, regulators say others are manipulating one market in order to profit in the other.

The Federal Energy Regulatory Commission (FERC), armed in 2005 with expanded powers to tackle manipulation, is leading the charge with advanced enquiries into several big energy firms and banks, its orders show. The Commodity Futures Trading Commission (CFTC), which gained a broader mandate to pursue price fixing in derivative markets in 2010, joined the fray last year.

A broadside last month reverberated across the industry: FERC accepted a record $245 million settlement with Constellation Energy over allegations the utility's traders had scheduled physical flows of electricity at a loss in order to reap a greater profit on derivative positions.

Initially viewed by some analysts as a concession from Constellation to win approval of its merger with Exelon Corp, more signs are starting to emerge of a broader effort to address a type of trading activity that in the past had threatened to slip between financial regulators with differing mandates and a history of battling over regulatory turf.

The FERC declined to discuss its enforcement approach on Wednesday, but FERC Chairman Jon Wellinghoff told Reuters in March that the commission has beefed up market enforcement. The Constellation settlement signals "there is no profit to be made in manipulating the market; it will be a huge net loss for you," he said.

Last week FERC quietly gave notice of "alleged violation" by four former Barclays Capital power traders for deals in California between 2006 and 2008 that were similar to what Constellation did in New York -- making uneconomic trades in physical electricity markets to profit from financial swaps on the IntercontinentalExchange.

A Barclays Capital spokesman said the allegations were "without basis" and that the bank had been fully cooperating with the investigation. All the traders named by the FERC had left the firm and that the bank had ceased trading in the Western power market this year for unrelated reasons.

Within the past 10 months, BP and Deutsche Bank have also been given such notices.

The heightened scrutiny comes just as many of the same banks and trading companies are struggling to adjust to tough new derivative rules, including the need to post more collateral.

Some fear the impact could be the same: Diminished liquidity, greater volatility, higher prices.

"What worries me about the interrelated markets theory is that it's so amorphous," said one senior executive with a large commodity merchant. "Even legitimate activities could be cast in this pejorative light, which tends to have a chilling effect. Maybe the easiest way to stay out of trouble is not trade." READ MORE...

ExNova Scotia politician pleads guilty

By Michael MacDonald The Canadian Press — Thu, 12 Apr 2012 10:51:04 -0700

YARMOUTH, N.S. – A former Nova Scotia cabinet minister publicly apologized to his family and constituents Thursday after pleading guilty to fraud and breach of trust, marking the second time a former provincial politician has admitted to defrauding the public purse since a spending scandal erupted two years ago.

Richard Hurlburt entered his pleas Thursday in the Nova Scotia Supreme Court in Yarmouth, the largest community in his former riding.

Outside the courtroom, Hurlburt stood before a row of television cameras with his wife, Nancy, at his side.

“I take full responsibility for my actions,” he said amid a steady whirr of camera shutters.

“I also want to apologize to my wife, my family, my friends and I thank them for their continued love and support. I want to apologize to the constituents of Yarmouth for any hardship that has been put on the constituency of Yarmouth and all of Nova Scotians.”

Dressed in a dark business suit, Hurlburt then took his wife by the hand and they walked out of the courthouse, a gaggle of reporters and photographers in tow. He declined to answer questions.

Hurlburt, who served in cabinet when John Hamm was premier, is one of four Nova Scotia politicians charged in February 2011 after the province’s auditor general asked the RCMP to investigate allegations of inappropriate use of constituency allowances.

Two months ago, Hurlburt’s lawyer said his client wanted to take responsibility for his actions before his former constituents.

On Thursday, Crown lawyer Andrew Macdonald said outside the courtroom that Hurlburt’s actions related to the submission of claims for expenses he didn’t incur, but the prosecutor didn’t elaborate.

He said an agreed statement of facts will be presented at a sentencing hearing in Yarmouth on July 5. Macdonald declined to say what penalty he would seek.

In all, Hurlburt faced five charges, but three charges of uttering forged documents were withdrawn.

“He understands the nature and consequences of his pleas,” Macdonald told the silent courtroom, filled with about 40 people. “He is tendering his pleas voluntarily.”

First elected in 1999, Hurlburt was re-elected in 2003 and 2006 and served as the natural resources and energy minister.

The scandal broke in February 2010 after provincial auditor general Jacques Lapointe released a bombshell report that revealed what he described as excessive and inappropriate spending of constituency funds between July 2006 to June 2009. READ MORE...

Md couple accused of using HIV funds on home cars

Mary Pat Flaherty — Thu, 12 Apr 2012 09:27:28 -0700

A Fort Washington couple is accused of embezzling $1 million in funds intended to fight global HIV infections and using it to renovate their home and buy luxury cars, a federal grand jury in the District charged Wednesday.

The indictment names Mark Adams, 43, who was deputy director of a private firm working for the United States Agency for International Development on HIV and AIDS health education and data analysis in developing countries. With his wife, Latasha Bell, 36, he is accused of submitting bogus invoices for work and services that were not provided and using proceeds for their own benefit, the indictment in U.S. District Court states.

The alleged scheme took place between 2005 and 2010 and involved companies whose identity is not disclosed in the indictment, which grew out of a continuing investigation.

Adams and Bell pleaded not guilty at their arraignments Wednesday.

The couple made “extensive” improvements to their home and bought a Cadillac EXT and Mercedes S550 with money that federal prosecutors charge was stolen through the invoicing scheme. READ MORE...

SarbanesOxley For Dummies

John Wiley & Sons, Inc. — Wed, 11 Apr 2012 12:35:22 -0700

Enacted in the wake of corporate mismanagement and accounting scandals, Sarbanes-Oxley (SOX) offers guidelines and spells out regulations that publicly traded companies must adhere to. Sarbanes-Oxley guidelines offer best-practice principles for any company, especially those providing services to other businesses bound by SOX. READ MORE...

BC credit debit fraud tied to Montreal crime group

Jason Proctor — Tue, 10 Apr 2012 12:09:10 -0700

A Montreal-based criminal organization has targeted banks and stores in multiple credit and debit card frauds in B.C. and across Western Canada, CBC News has learned.

Connections between suspects uncovered in a CBC News investigation indicate a pattern of criminal behaviour dating back to at least 2007, including convictions in Australia and New Zealand.

Vancouver Crown prosecutor Peter Stabler describes the phenomenon as "tsunami fraud."

"Usually about a dozen or so people are sent out en masse as a group to either go and skim information from ATM machines — but normally, that's already been pre-skimmed by another group. Then they make massive amounts of forged credit cards and these twelve people, for example, are each given 10 or 20 or 30 credit cards and they hit 10 or 12 ATM machines in an area all at the same time," Stabler said.

"So they just overload that system. They just take out so much money. It's within usually a 24-hour period so by the time the alert comes on, they're gone."

Tsunami fraud is part of an identity theft phenomenon that appears to be growing exponentially. Stabler says an increasing number of organized crime groups are choosing credit and debit card fraud over drug profits, drawn by the promise of a lucrative payout with relatively little danger. READ MORE...

The Evolution of the Audit Process

Regis Quirin — Tue, 10 Apr 2012 11:28:46 -0700

By this time, your annual audit is either complete or winding down. You have documented the auditor’s requests and considered how you could make the process easier next year. You may have had your exit discussion and are in the process of considering how and when to implement any suggested process improvements. In year’s past, that was it, until you received your engagement letter next November/December.

But this year may be different. One change being discussed may alter the process, in the next twelve months –

In August 2011, the Public Company Accounting Oversight Board (http://pcaobus.org) released for comment PCAOB Release No. 2011-006, which proposed an audit FIRM rotation. PCAOB questions how objective an auditing firm could be if the audit firm and the client have had a long-standing relationship.

As of March 24, 636 letters were received, i.e. some for the proposal and some against. The comment period will stay open until April 22, 2012.

This proposal represents a more stringent requirement than the one imposed by the Sarbanes-Oxley Act (2002). As a way to ensure independence and objectivity of audit firms, Sarbox requires senior managing audit PARTNER rotation every five years.

The primary objection, for those that oppose the PCAOB proposal, are that as you shorten the time of engagement, you lose the expected efficiencies and cost savings associated with a long-standing relationship.

According to a study entitled “Audit Partner Rotation: An Analysis of Benefits and Costs” audit partners reported that it required two-to-three years before client familiarity was established. Based on this research, audit clients only receive the benefits of an established audit relationship for two years, prior to a partner rotation. At this early stage, Firm Rotation research is spotty.

Even though these actions technically are imposed only on public companies, it would be prudent for a CFO to take note. Quickly when business methods are adopted and accepted by key stakeholders, they have a way of becoming a “Best Practice,” i.e. a business requirement that is expected, but not legally based.

What is your experience? READ MORE...

Obama signs insider trading bill wants more curbs on Congress

Laura MacInnis; Editing by Vicki Allen — Thu, 05 Apr 2012 13:37:03 -0700

(Reuters) - President Barack Obama called on Wednesday for stricter controls on lawmakers to confront "the corrosive influence" of money in Washington as he signed into law an insider trading ban he said was needed to help restore trust in the U.S. government.

The Democrat, who is running for re-election in November, said the STOCK Act he signed at the White House made plain that members of Congress using non-public information to improve their personal investment portfolios were breaking the law.

Enforcement of the core stock trading disclosure provisions will begin in July.

He also called for more restrictions, saying lawmakers should not be allowed to own stocks in industries they have the power to affect and that people who bundle campaign funds for Congress should not be able to lobby elected representatives.

"The powerful shouldn't get to create one set of rules for themselves and another set of rules for everybody else," Obama said, linking the insider trading legislation to one of his key campaign themes: economic fairness.

"If we expect that to apply to our biggest corporations and to our most successful citizens, it certainly should apply to our elected officials, especially at a time when there is a deficit of trust between this city and the rest of the country," he said. READ MORE...

SFU launches audit of directors expense claims

Tara Carman, Vancouver Sun — Thu, 05 Apr 2012 13:11:38 -0700

Simon Fraser University is launching an audit of the expense claims made by one of its directors who was reimbursed by the university for more than $2,000 spent attending B.C. Liberal events in 2012.

Former BC Liberal MLA Wilfred Hurd, now SFU’s director of government relations, expensed $2,045 in just over one month to attend seven party fundraisers, The Sun reported on Tuesday. He also donated $18,766 to the B.C. Liberals between 2005 and mid-2011, Elections B.C. records show.

SFU spokesman Don MacLachlan could not say how much of that money was reimbursed by the university, but SFU’s internal auditor will be looking into all Hurd’s expense claims going back “as far as they need to,” he said.

The auditor will also evaluate the university’s procedure for approving business expenses with an eye to identifying improvements, MacLachlan said.

Hurd, who did not respond to interview requests on Wednesday, has held the position at SFU since 2002. The audit will only apply to Hurd’s expenses as the university is not aware of anyone else who has been in a similar situation, MacLachlan said.

MacLachlan could not say how long the audit will take, saying only that it should be “fairly fast.”

“There’s a lot of paperwork to go through,” he said, adding the decision to bring in an auditor was made after The Sun broke the story on Tuesday.

“University funds should not be used to make contributions, whether directly or indirectly, to any political party ... federal, provincial or municipal and the practice, which has apparently existed for some years, has been firmly and permanently stopped,” he said. “We are also working on a definitive policy to ensure this never happens again.”

The expenses claimed by Hurd included $1,000 for six tickets to attend an event put on by Liberal MLA Harry Bloy and $350 to attend an event by Liberal MLA and deputy Speaker Linda Reid. READ MORE...

Regulator to penalize JPMorgan over Lehman demise NYT

Sakthi Prasad; Editing by Mark Potter — Thu, 05 Apr 2012 12:22:36 -0700

(Reuters) - A U.S. regulator is set to penalize JPMorgan for actions linked to the demise of investment bank Lehman Brothers at the height of the financial crisis in 2008, the New York Times said, citing people briefed on the matter.

The Commodity Futures Trading Commission (CFTC) is expected this week to file a civil case against JPMorgan. The bank is expected to settle the Lehman matter and pay a fine of about $20 million, the paper said.

Such a move will be the first federal enforcement case resulting from Lehman's downfall, the New York Times said.

The CFTC is expected to accuse JPMorgan of overextending credit to Lehman for two years leading up to its bankruptcy in 2008, according to the newspaper.

JPMorgan extended the credit using an inaccurate evaluation of Lehman's worth, improperly counting Lehman's customer money as belonging to the firm, the newspaper said, adding that firms are not allowed to use customer money to secure or extend credit under federal law.

The regulator is also set to accuse JPMorgan of withholding separate Lehman customer funds for nearly two weeks, rather than turning them over to authorities, the New York Times said.

JPMorgan declined to comment to the New York Times. The newspaper said the bank is expected to neither admit nor deny wrongdoing as part of the settlement.

JPMorgan and CFTC could not immediately be reached for comment by Reuters. READ MORE...

Fraud in the Rubble Man Accused of Being Disaster Relief Impostor

ANGELA M. HILL and BRIAN ROSS (@brianross) — Wed, 04 Apr 2012 09:42:55 -0700

In the aftermath of the monster tornado last month the people of Henryville, Indiana, needed all the help they could get and Gerald Flint, dressed in his trademark flight suit, was welcomed with open arms as he showed up and started issuing orders.

Once Flint arrived he "portrayed himself as some kind of commander, an on-scene commander," tornado relief volunteer Jerry Lucas said.

When he introduced himself, Flint said he was with a natural disaster relief group, according to local volunteer Kevin Coley. Others said Flint also claimed he was with Homeland Security and the EPA and took charge of teams of volunteers.

Then, among the rubble left by the deadly storm, Flint began to collect loads of emergency supplies.

"We got his truck loaded up, his trailer up and off they go," said Rose Aycock, director of the local Covenant Cooperative Food Pantry.

But despite all of Flint's badges and claims, people in Henryville began to have suspicions, especially when they said he asked residents to collect donations. Coley said Flint had asked contributors to make their checks out to cash.

It was enough for people in Henryville to call the state police and now Flint has been accused of stealing of some of the supplies and impersonating a government official. READ MORE...

TripAdvisor complains about Google to EU regulators

Foo Yun Chee — Tue, 03 Apr 2012 15:49:32 -0700

(Reuters) - Online travel agency TripAdvisor has asked EU antitrust regulators to halt what it calls anti-competitive practices by Google, adding to more than a dozen complaints being investigated by the European Commission.

The EU watchdog opened a probe into the world's most popular search engine in November 2010 after rivals, including Microsoft, accused Google of manipulating search results and promoting its own services while demoting theirs.

TripAdvisor competes with Google's online service Place, which aims to help consumers search for local businesses. It took its grievance to the Commission on Monday.

"TripAdvisor filed a complaint with the European Commission to address anti-competitive and unfair practices by Google that harm the marketplace and consumer welfare," the company said in a statement. "We hope that the Commission takes prompt corrective action."

In a two-paragraph statement, TripAdvisor gave no details of the specifics of its complaint or of how it believed it was being harmed.

Google said it was working closely with the Commission to explain how its business works.

"We haven't seen this complaint yet, but we will continue to discuss any concerns with the Commission, knowing that there's always room for improvement," Al Verney, Google's spokesman, said in a statement. READ MORE...

SEC Probes Groupon

SHAYNDI RAICE And JEAN EAGLESHAM — Tue, 03 Apr 2012 14:29:53 -0700

The Securities and Exchange Commission is examining Groupon Inc.'s GRPN -1.67% revision of its first set of financial results as a public company, according to a person familiar with the situation.

The regulator's probe into the popular online-coupon company is at a preliminary stage and the SEC hasn't yet decided whether to launch a formal investigation into the matter, the person said.

The SEC decision to examine the circumstances surrounding Groupon's surprise revision is the start-up's latest run-in with the regulator. Groupon twice revised its finances before its November IPO. An SEC spokesperson declined to comment, as did a spokesman for Groupon.

Groupon shares plunged Monday, ending the day down nearly 17% at $15.27, far below its $20 IPO price. The selloff came despite damage control efforts by Groupon's top two executives, Chief Executive Andrew Mason and finance chief Jason Child.

The Chicago company also closed ranks around Mr. Child, even as accounting experts and investors criticized his performance. People familiar with the situation said Mr. Child, who joined Groupon from Amazon.com Inc. in December 2010, continues to have the support of Mr. Mason and others at the company.

Groupon said Friday it was revising its results for the fourth quarter after discovering executives had failed to set aside enough money for customer refunds. The company had reported a loss of $37 million for its fourth quarter. The accounting changes reduced the company's revenue for the quarter by $14.3 million and widened its loss by $22.6 million. READ MORE...

JOBS Act Debate Should PreIPO Companies Resolve Accounting Issues Behind Closed Doors

WSJ�s Michael Rapoport — Tue, 03 Apr 2012 14:23:30 -0700

Groupon’s latest financial restatement has brought to light a little-noticed provision in the new JOBS Act that allows companies to iron out disagreements with regulators behind closed doors before they go public, reports WSJ’s Michael Rapoport.

President Obama is expected to sign the bill this week that includes the provision that lets companies submit confidential drafts of their IPO documents to the SEC before they file publicly.

In September Groupon had to refile its IPO documents and restate how it accounts for revenue after the SEC took offense to a metric called “adjusted consolidated segment operating income.” On Friday Groupon disclosed another revenue restatement after failing to set aside enough money for customer refunds.

Critics of the provision are concerned that Groupon would have been able to resolve its accounting issues under the radar before its IPO. “I find it amazing that Congress would allow any firm to work behind closed doors on any accounting or auditing issue,” J. Edward Ketz, an associate professor of accounting at Penn State University, told WSJ. “We learned a long time ago that sunshine is the best antiseptic.” READ MORE...

Dame Amelia offers hedge funds a regulatory window

boyd erman — Mon, 02 Apr 2012 16:24:02 -0700

For the hedge fund industry, facing the threat of heavy regulation, it comes down to the old maxim: If you want something done right, do it yourself.

Hedge funds were vilified for feeding the U.S. housing bubble, for pushing Europe to the brink of crisis, and pretty much anything else bad that befell investors in the global crisis and since. Even though plenty of hedge funds did nothing wrong, the perception of managers as a bunch of over-levered gamblers put the industry on the regulatory hit list.

However, rule makers have been so tied up with trying to fix the banking system in recent years that hedge funds have largely gotten a pass. It’s not going to last, and hedge fund managers and investors know it. So those in the industry are scrambling to put its image and its practises right before the regulators do it for them.

At the head of the effort is a former Morgan Stanley senior executive, Dame Amelia Fawcett, who is now at the helm of the four-year-old Hedge Fund Standards Board.

The board is an attempt by a growing group of the industry’s large investors to work with managers to improve the way funds are run, by enforcing a high bar in areas such as risk management and disclosure. Backers include the Government of Singapore Investment Corp., the world’s third-largest sovereign wealth fund, and Australia’s $73-billion Future Fund. READ MORE...

CFTC Alleges Massive Trading Scheme by Royal Bank of Canada

JEAN EAGLESHAM, JAMILA TRINDLE and CAROLINE VAN HASSELT — Mon, 02 Apr 2012 14:05:19 -0700

U.S. regulators alleged a "wash trading scheme of massive proportion" by Royal Bank of Canada, RY +1.96% which was accused in a lawsuit Monday of unlawfully trading hundreds of millions of dollars in stock futures in order to get tax benefits.

The Commodity Futures Trading Commission filed the civil suit lawsuit against the Canadian bank in the Southern District of New York on Monday.

The scale of the alleged misconduct makes the lawsuit one of the biggest ever brought by the agency. It comes as the CFTC is flexing its enforcement muscles in response to being granted much greater oversight powers as part of the Dodd-Frank financial-overhaul law.

RBC denies wrongdoing and intends to fight the allegations, according to a person familiar with the matter. A spokesman for the bank wasn't immediately available for comment.

The CFTC alleged that Royal Bank of Canada broke laws banning "wash trades," or trades a firm does with itself to make it look as if stocks or other securities have been bought and sold.

Wash trades are fictitious trades that carry no market risk.

The trades were orchestrated by a small group of senior bank officials, as part of a strategy to minimize Canadian tax, according to the CFTC's complaint.

A CFTC official declined Monday to say whether the regulator is investigating other financial firms for trading linked to similar tax avoidance strategies.

The regulator alleged that the Royal Bank of Canada scheme was designed to realize "lucrative" Canadian tax breaks on dividend payments.

The scheme ran from at least June 2007 to May 2010, the CFTC said. It alleged that the Royal Bank of Canada made hundreds of trades in U.S. and Canadian stock with the aim of getting tax-free dividends.

The CFTC alleged that the bank eliminated the risk of investment losses on the stock by coordinating with two of its subsidiaries the sale and purchase of futures contracts that gave the right to sell the stock in the future at certain prices.

The law requires trades between two different arms of a financial firm to be negotiated at "arms length." But the CFTC alleged that prices paid for these contracts were set by a bank official in the bank's Central Funding Group, which was coordinating the tax strategy, the CFTC said.

The regulator also alleged that the bank tried to cover up the scheme when questions were first asked about it.

From 2006 to 2010, the trades between different RBC subsidiaries were the only transactions of certain products on OneChicago, an electronic futures trading exchange in Chicago.

CME Group Inc., CME +0.65% a part owner of OneChicago which also runs the exchange's regulatory functions, was asked by the CFTC to investigate. READ MORE...

Expedia files Google complaint to EU regulators

Foo Yun Chee — Fri, 30 Mar 2012 13:55:54 -0700

(Reuters) - Online travel agency Expedia on Friday accused Google of breaching EU rules with a formal complaint to EU antitrust regulators as it joined a dozen other firms that have taken their case to the European Commission in the last two years.

The EU watchdog is now investigating the world's most popular search engine after rivals, including Microsoft, accused Google of abusing its dominant position in the market for Web search engines.

EU Competition Commissioner Joaquin Almunia said earlier this week that he would decide after Easter whether to formally charge Google or drop the investigation.

Expedia said it had details of specific business and search practices by Google that violated EU competition and consumer protection laws.

"The complaint offers evidence of how Google's conduct harms not only competition, but consumers," Brent Thompson, senior vice president of government affairs, said in a statement.

"Expedia believes that strong action is needed by the European Commission to restore a fair and competitive marketplace in online search that respects consumers' rights," he said.

Google said it has not been informed of the complaint yet. READ MORE...

Visa and Mastercard warn of massive security breach

BBC — Fri, 30 Mar 2012 12:07:36 -0700

Visa and Mastercard have warned US banks that details of credit card holders' personal information could be at risk after a security breach.

Both Visa and Mastercard said there had been "no breach" of its own system, instead blaming a third-party.

Security blog KrebsOnSecurity, which first reported the story, said industry sources believed more than 10 million cards may have been compromised.

Reports suggested the stolen details had been obtained in New York.

The Wall Street Journal quoted its own industry sources as saying card-processing firm Global Payments was the company that suffered the breach. Shares in the company fell by more than 9% on Friday.

Global Payments has not responded to requests for comment.

Concern

Neither Visa nor Mastercard would confirm how many customers were affected.

In a statement, Mastercard said: "[We are] concerned whenever there is any possibility that cardholders could be inconvenienced and we continue to both monitor this event and take steps to safeguard account information.

"If cardholders have any concerns about their individual accounts, they should contact their issuing financial institution."

Visa echoed Mastercard's statement, emphasising that its customers are not responsible for fraudulent purchases.

Gartner analyst Avivah Litan said she believed the breach was related to a taxi garage in New York City.

"So if you've paid a NYC cab in the last few months with your credit or debit card - be sure to check your card statements for possible fraud," she said. READ MORE...

AuditorGeneral battles BC for access to documents in corruption case

mark hume — Thu, 29 Mar 2012 11:29:06 -0700

Government delays in producing documents, restrictions on access to material, and blanket claims of privilege are threatening to derail an investigation into the payment of legal fees in a political-corruption case, the Auditor-General of British Columbia claims.

The allegations are made in a series of petitions and affidavits filed in a Supreme Court of B.C. case that pits the Auditor-General’s office against the Ministry of the Attorney-General.

But in a statement issued Wednesday night, Attorney-General Shirley Bond said it is her understanding legal differences have now been resolved.

"As recently as last Friday, the Auditor-General assured me that he has been provided with access to all records not subject to solicitor-client privilege in the possession of Legal Services Branch in the Ministry of Justice and in the possession of the Risk Management Branch in the Ministry of Finance," she said in a statement.

The court record, however, shows no sign that matters have been resolved.

At the core of the dispute is the Auditor-General’s demand for access to records related to the government’s decision to pay the $6-million legal fees of Dave Basi and Bobby Virk, two former ministerial aides who entered guilty pleas on breach of trust charges.

The Auditor-General’s office last year set out to investigate the government practice of providing indemnity for officials who face charges.

But a legal battle soon erupted concerning the Auditor-General’s access to government files. The matter is still before the courts, with the next hearing set to take place in June, and documents filed in the case show the Auditor General fears the audit could be in jeopardy.

“As a result of the delays in production, withholding of documents and restriction on obtaining information the completion of the audit planning phase has been significantly delayed. If access to documents in situ is not provided, the Auditor-General advises me that he is uncertain whether he can even complete the audit in accordance with the audit standards,” states an affidavit sworn by Beverly Romeo-Beehler, assistant auditor general. READ MORE...

Options for pursuing a fraud case

David Rosen — Thu, 29 Mar 2012 10:30:35 -0700

There are generally 3 legal routes you can take if you have been the victim of fraud.

1. You can do nothing at all

On many occasions, I learn of people who were the victims of fraud, who did or said nothing because they felt silly or stupid for being conned. They were ashamed to admit that as successful business people who know better. By saying and doing nothing, you allow others to become the victims of fraud. You allow the cancer of crime to take its hold on innocent law-abiding people.

2. You can consider Civil Proceedings against the fraudster:

This can be expensive. You need to consider many things, before you take such action:

Do you know who they are, where they live, or whether they have any money or assets?

If you do not know who they are, whey live, or whether they have any money, then this is not the route to take.

If you know who they are, and where they live, but not whether they have any money or assets, it may be sensible to commission an investigation to consider this, before taking any further steps.

Civil Proceedings for fraud can take many avenues.

If you know they have funds, but they may be moving them elsewhere, you will want to consider a Freezing Injunction, previously known as a Mareva Injunction. It is something that needs to be done when you have reasonable grounds to believe that something is amiss. Work is time-sensitive. It is a short-term resolution to stopping funds from being moved or transferred and is not effective until Financial Institutions and Banks are served with it. Work is considerable, and labour intensive. A full Witness Statement needs to be drafted, exhibiting what evidence there is to believe something is wrong. A Claim Form and Particulars of Claim need to be drafted, together with an application notice, and the wording of the Freezing Injunction. Costs of taking such action are not insignificant.

If you know they are holding onto key documentation, objects, computers, electronic storage equipment, articles of importance, you will want to consider a Seizure Injunction, formerly known as an Anton Piller Injunction. Again, there is similar work, time-pressure, and costs involved, like with the Mareva.

If you are in possession of the evidence, and money is not moving anywhere (i.e. you have appropriate undertakings for assets, or property to be preserved), then you would apply on Notice for an Injunction and make a claim for civil fraud.

Costs of Civil Proceedings are significant and each case attracts its own time estimate of costs. You should still consider this as an option, because time-wise you are likely to obtain a faster result than to go through the criminal proceedings route.

What do you have to prove to bring civil Proceedings v criminal Proceedings, for fraud?

To start with, if you are bringing case of Fraud or Deception against another party, the onus is upon you to prove your case.

A Civil case requires that you prove your case on a balance of probabilities. A criminal case requires that you prove your case beyond reasonable doubt. A civil case, where there is fraud/deception involved, is a more serious case which requires a test of more than a balance of probabilities, but less than beyond reasonable doubt.

3. You can report the matter to the Police

There has been much frustration from my clients and potential clients that reporting to the Local Police Station takes time. Usually the person you talk to, does not fully understand the type of crime, and delays inevitably occur.

In conjunction with the City of London Police, the National Fraud Authority has launched a very helpful initiative to report such fraud more efficiently to ACTION FRAUD. I can do no better than to refer you to their website .

It remains to be seen whether this initiative will speed matters up, but I sincerely hope that it does. It is certainly a welcome step in the right direction for Police Forces to share more readily information Nationally, and various Multi-National Companies have bought into the concept. There is a dedicated number to ring.

4. You could take out a Private Prosecution

This requires very careful consideration. You would have the same options available to you, but it would be at your cost. It is likely to be quicker to proceed to Court, but you will lack the resources that the Police have of levels of expertise and speciality to collect and preserve evidence.

David Rosen

David Rosen is a Solicitor-Advocate, Partner and head of Litigation at Darlingtons. He is a Certified Fraud Examiner with the Association of Certified Fraud Examiners, a member of the Fraud Advisory Panel, and a member of the Proceeds of Crime Lawyer’s Association. He is also a visiting associate Professor of Law at Brunel University. READ MORE...

Navy employees contractors plead guilty to fraud involving $1 million in bribes in Calif

Associated Press, Published: March 28 — Thu, 29 Mar 2012 09:28:31 -0700

SAN DIEGO — Four Navy employees and three defense contractors pleaded guilty to participating in a wide-ranging corruption scheme in which the contractors won millions of dollars in military orders after offering officials massage chairs, bicycles, flat screen TVs and other bribes, federal officials announced Wednesday.

The civilian employees who worked for a Navy aircraft maintenance program accepted a total of more than $1 million in bribes, U.S. Attorney Laura Duffy said.

It was unclear if the scheme put national security or military operations at risk.

Assistant U. S. Attorney Robert S. Huie said the Navy employees worked for a program tasked with ensuring aircraft were combat ready at the Naval Air Station North Island in Coronado, near San Diego.

“Corruption of this nature strikes at the heart of our national security and erodes public confidence,” said Chris Hendrickson, the special agent in charge of the Defense Criminal Investigative Service Western Field Office.

The four Navy employees — Donald Vangundy, Kiet Luc, David Lindsay and Brian Delaney — worked for the Navy’s Fleet Readiness Center and were assigned to maintaining the Navy’s Grumman E-2 Hawkeye, an early warning aircraft, and the C-2 Greyhound, a derivative of the E-2 that has a widened fuselage with a rear loading ramp. READ MORE...

Fraud costs Asia $1 billion a year Progress Software

Mark Tay; Editing by John O'Callaghan — Wed, 28 Mar 2012 11:31:50 -0700

(Reuters) - Many banks still do not have enough teeth to tackle fraud, which costs Asia around $1 billion a year, but social media could be a game changer due to the reputational risk, said a top official from business software firm Progress Software Corp (PRGS.O).

Fraud cases include bank card skimming or copying of card data, security issues in Internet banking and theft of credit card details, Progress Software's deputy chief technology officer Giles Nelson told Reuters in an interview on Tuesday.

The costs of fraud include direct monetary loss, fines from regulators and lost potential customers.

"Fraud is a billion-dollar problem in Asia," Nelson said, noting the financial and telecommunications sectors are the most targeted. "Much of the fraud that happened went unreported and perhaps some of it is seen as an acceptable loss." READ MORE...

Ingushetia Pension Fund Head Arrested on Fraud Charges

The Moscow Times — Wed, 28 Mar 2012 10:38:36 -0700

The head of the Ingushetia State Pension Fund has been arrested on suspicion of fraud, Interfax reported Wednesday.

An unnamed source at the region's investigative committee said Movli Vyshegurov was arrested Tuesday night after multiple investigations into the fund showed large-scale violations and abuse of power by officials in issuing so-called "maternity capital," government subsidies for families with more than one child.

The source added that deputies and experts at the fund were also arrested. READ MORE...

Gupta loses wiretap ruling wins on SEC notes

Wed, 28 Mar 2012 10:11:27 -0700

(Reuters) - Former Goldman Sachs Group Inc (GS.N) director Rajat Gupta lost his bid to suppress wiretap evidence at his upcoming criminal trial on charges that he leaked boardroom secrets to hedge fund founder Raj Rajaratnam.

But Gupta also won a key victory as U.S. District Judge Jed Rakoff in Manhattan directed federal prosecutors to review U.S. Securities and Exchange Commission notes from a separate civil fraud case and turn over to the defense any evidence that might show Gupta's innocence.

A former global head of the McKinsey & Co consulting firm, Gupta is the most prominent corporate executive charged in the U.S. government's sweeping investigation of illicit trading on Wall Street. His criminal trial is set for May 21.

Prosecutors say Gupta tipped his friend Rajaratnam between March 2007 and January 2009 about developments at Goldman and Procter & Gamble Co (PG.N), where Gupta was also a director.

Rakoff also ruled on Tuesday that Gupta's lawyers could depose Goldman Chief Executive Lloyd Blankfein and ask him about meetings he held with federal investigators about the case. READ MORE...

Regulator at a crossroads

Michael McKiernan — Mon, 26 Mar 2012 16:20:21 -0700

The Ontario Securities Commission is looking far beyond the province’s borders as it formulates a plan for its future approach to regulation.

High-profile proceedings against Chinese companies have forced the commission to confront the challenges of pursuing foreign-based companies, while enforcement initiatives unveiled late last year borrow heavily from measures already in place at regulators internationally.

The OSC is still drafting its strategic plan, but hinted at its future approach in October 2011 with a staff notice that controversially mooted no-contest settlements and whistleblower bounties, among others, as new weapons in its enforcement armoury. Both ideas have a history south of the border at the U.S. Securities and Exchange Commission, where companies have for decades been able to settle without admitting to a breach of securities law, and recent legislation allowed whistleblowers to share in the monetary sanctions it imposes.

While some say the proposals could prove a springboard to strengthened enforcement and increased investor protection in Ontario, others are warning the commission is in danger of overreaching.

Anita Anand, chair of the OSC’s Investor Advisory Panel, says the regulator can learn a lot from its foreign counterparts. “This type of initiative and focus on making enforcement more effective is extremely important. Studying other jurisdictions enhances the quality of the proposal. The investor advisory panel believes that investors in Ontario should be as well protected as they are in other jurisdictions,” she says. “Thus, learning what other jurisdictions are doing is extremely important.”

Susan Hackett, the former general counsel of the Association of Corporate Counsel, says the increasingly global nature of business forces all securities regulators to consider the approach of their foreign counterparts.“You’re going to see an awful lot more handholding on enforcement, because companies are multinational. To regulate them one way in one jurisdiction and another way in every other jurisdiction doesn’t really make sense,” she says. “And if regulators deem one jurisdiction to have created a best practice, they’re certainly going to examine it and potentially implement it.”

READ MORE...

SEC takes Wells Fargo to court to enforce subpoenas

Sarah N. Lynch and Rick Rothacker — Mon, 26 Mar 2012 15:46:11 -0700

(Reuters) - U.S. securities regulators accused Wells Fargo & Co on Friday of repeatedly ignoring its subpoenas for documents in connection with a probe into the bank's $60 billion sale of mortgage-backed securities.

The Securities and Exchange Commission's filing in a San Francisco federal court seeks to compel the fourth largest U.S. bank to hand over documents. The SEC said it has issued several subpoenas since September.

A Wells Fargo spokeswoman called the SEC's action "inappropriate" and pledged the bank would "vigorously defend itself in court" against the SEC action.

"Wells Fargo has extensively cooperated in the commission's investigation and believed it had an understanding with the SEC staff with regard to the outstanding document requests; the filing of this action violates that understanding," said Wells Fargo spokeswoman Mary Eshet.

The SEC said on Friday it is looking into whether Wells Fargo made "material misrepresentations or omitted material facts" in offerings it made to investors from September 2006 through early 2008, a period that included the beginnings of the financial crisis.

The SEC charges that a due diligence review of a sampling of the securitized loans was done, and some of those loans would be dropped because they failed to meet the bank's underwriting standards.

But the regulator said it "does not appear that Wells Fargo took any steps to address similar deficiencies in the remainder of the loans in the pool, which were securitized and sold to investors." READ MORE...

Baines BCSC and RCMP ramp up investigation into alleged $40million Ponzi scheme

David Baines, Vancouver Sun columnist — Mon, 26 Mar 2012 09:05:07 -0700

Vancouver notary Rashida Samji has retained high-profile lawyer Rod Anderson of Harper Grey LLP to represent her as the B.C. Securities Commission and RCMP ramp up their investigation into her alleged involvement in an estimated $40-million Ponzi scheme.

Anderson is the go-to guy for people who are implicated in securities cases. Other high-profile clients include Victoria investment adviser Ian Thow, who perpetrated a $10-million investment fraud in 2004, and Vancouver geologist John Patterson, who is facing criminal charges in an allegedly bogus assay scheme.

Both the BCSC and the RCMP have made the Samji case a top priority. The commission has seized files from Samji’s notary office and the RCMP, in turn, have seized those files from the commission’s office. RCMP have also executed a second search, details of which have not yet been made public.

BCSC enforcement staff are expected to issue a notice of hearing within a few weeks. That document would presumably cite Samji for alleged securities offences and order her to appear before a hearing. The RCMP investigation will take months, if not years.

To date, I have been unable to contact Samji and have no idea where she is. On Feb. 7, after the scheme was exposed, she reportedly checked herself into emergency at Vancouver General Hospital. Neighbours in her condominium complex at 1596 West 14th Ave. in Vancouver say they haven’t seen her lately.

The condo complex is very luxurious, with rooftop swimming pool and 24-hour concierge. Samji’s unit is assessed at $2.16 million. Property documents indicate she bought it in 2000, about five years before the alleged Ponzi scheme got underway. READ MORE...

Stiff sentence sought in Vancouver firefighters band fraud

CBC News — Mon, 26 Mar 2012 08:55:00 -0700

Jason William Davidson now deputy chief in Yellowknife

The director of the Vancouver Firefighters Band Society says the court should make an example of the man who defrauded the organization.

Jason William Davidson pleaded guilty in Vancouver Friday to stealing more than $100,000 while acting as the society's treasurer.

The Crown is asking for a one-year conditional sentence, while the defence is asking for a conditional discharge.

"They're supposed to be honest people and here he is milking the band fund," said David Waterhouse, who speaks for the band society.

"Shouldn't the public be saying, 'Well let's make an example of him and let's show the public that they can't do that thing when they're in a position of trust.' "

Davidson used the band society's funds as a personal bank account, stealing or borrowing more than $100,000 over the five years he served as treasurer. He bought a garden shed, an engagement ring, a domain name for his wife's business and lent himself $10,000 to put a down payment on a house he later sold for a $96,000-profit.

Vancouver Fire Chief John McKearney gave the court a character reference as did the chief in Yellowknife, where Davidson landed as deputy after resigning from his job in Vancouver. READ MORE...

SEC Probes Rapid Trading

Scott Patterson and Jean Eaglesham — Fri, 23 Mar 2012 09:33:37 -0700

Federal securities regulators are examining whether some sophisticated, rapid-fire trading firms have used their close links to computerized stock exchanges to gain an unfair advantage over other investors, people familiar with the matter say.

The wide-ranging probe, being handled by the enforcement staff of the Securities and Exchange Commission, is focusing on the computer-driven trading platforms of exchanges, including BATS Global Markets Inc., the people said.

The SEC probe illustrates a bigger push by regulators to examine less-transparent parts of the securities markets, such as the fast-growing area of so-called high-frequency trading. High-speed trading firms use powerful computer systems for rapid-fire trades, in which they often hold stocks for only fractions of seconds. They benefit by being able to move quicker than less technologically proficient investors.

Federal securities regulators are examining whether some sophisticated, rapid-fire trading firms have used their close links to computerized stock exchanges to gain an unfair advantage. Financial News trading editor Michelle Price explains.

Computer-driven exchanges operated by firms such as BATS are the favored venue of high-speed trading firms. BATS has moved up to third in U.S. share-trading volume behind exchanges run by NYSE Euronext and Nasdaq OMX Group Inc., NDAQ -0.93% with about 11% of average daily volume. READ MORE...

The International Emergence of Legal Protections for Whistleblowers

Elaine Kaplan - Special Counsel, U.S. Office of Special Counsel — Thu, 22 Mar 2012 10:57:21 -0700

The International Emergence of Legal Protections for Whistleblowers*

As the international community is increasingly recognizing, employees (especially public employees) are an invaluable source of information about official corruption. Anti-corruption efforts are hampered when employees are reluctant to become “whistleblowers” by coming forward and sharing their knowledge of official corruption and malfeasance with the proper authorities.

Whistleblower protection laws are intended to make it safe for employees to disclose misconduct that they discover during the course of their employment. Indeed, when accompanied by other initiatives, such laws can actually help foster an environment that rewards and encourages whistleblowing.

In the United States, statutory protection for whistleblowers has existed for at least 20 years. Further, constitutional guarantees of free speech have long been interpreted to protect public employees who speak out on matters of public concern—including corruption and malfeasance.

Other members of the international community have recently begun to enact their own laws to protect and encourage whistleblowers. Indeed, whistleblower protection is receiving the attention of multinational organizations. Section 8 of the Inter-American Convention Against Corruption provides that members of the Organization of American States should consider the establishment of “systems for protecting public servants and private citizens who, in good faith, report acts of corruption, including protection of their identities, in accordance with their Constitutions and the basic principles of their domestic legal systems.”

This article presents a brief overview and comparison of some of the laws that have been or may soon be enacted to protect whistleblowers against retaliation. It concludes with observations based on the U.S. experience regarding the role such laws play in efforts to uncover corruption, and what additional measures are needed to promote a culture that not only accepts, but actively encourages, whistleblowing. READ MORE...

Ethisphere Institute Unveils 2012 Worlds Most Ethical Companies

Ethisphere Institute — Thu, 22 Mar 2012 10:37:16 -0700

Ethisphere recognizes exceptional ethical leadership at the Global Ethics Summit and World’s Most Ethical (WME) Companies Honoree Dinner in New York

NEW YORK, N.Y. – March 15, 2012 – The Ethisphere Institute, a leading international think-tank dedicated to the creation, advancement and sharing of best practices in business ethics, corporate social responsibility, anti-corruption and sustainability, announced today the sixth annual selection of the World’s Most Ethical (WME) Companies,highlighting a record 145 organizations that show leadership in promoting ethical business standards.

This year’s list covers more than three dozen industries, from aerospace to wind power, with 43 of the WME winners headquartered outside the U.S.

Each 2012 honoree – including U.S. industry standard-bearers like Cisco, Ford and Timberland and smaller international firms like the Ethical Fruit Company (UK), Tokio Marine Holding (Japan) and the Panama Canal Authority – was chosen for promoting ethical business standards and practices by exceeding legal minimums for compliance, introducing innovative ideas that benefit the public and forcing their competitors to follow suit. They demonstrate how corporate citizenship is undoubtedly tied to the success of a company’s brand and bottom line.

Click here or visit www.ethisphere.com/wme to view the complete list of the 2012 World’s Most Ethical Companies, past lists, and to read the methodology behind it.

“Each year the competition for World’s Most Ethical Companies intensifies as the number of nominations submitted for consideration grows,” said Alex Brigham, Executive Director of Ethisphere. “This year’s winners know that a strong ethics program is a key component to a successful business model, and they continue to scrutinize their ethical standards to keep up with an ever-changing regulatory environment. Corporate ethics has become much more important globally, as well, and that is reflected in the truly global nature of this year’s honorees.”

There have been 23 companies that have been honored each of the six years the WME has been awarded, including Aflac, American Express, Fluor, General Electric, Milliken & Company, Patagonia, Rabobank and Starbucks, among others. READ MORE...

Canadian Tire others plead guilty to gas pricefixing in Ontario

By Derek Abma, Postmedia News — Thu, 22 Mar 2012 10:24:36 -0700

Three companies, including Canadian Tire, have pleaded guilty to fixing gasoline prices in southeastern Ontario, resulting in combined fines of $2 million, the national Competition Bureau says.

Canadian Tire Corp., Pioneer Energy LP and Mr. Gas pleaded guilty to charges under the Competition Act that they consulted with each other between May and November 2007 to set gasoline prices in the cities of Kingston and Brockville, the bureau said in a statement.

The bureau said the charges were the result of an extensive investigation that followed evidence that local representatives of these companies were making phone calls to each other to set gas prices during the time in question.

"Consumers in Kingston and Brockville were denied a competitive price for gasoline as a result of this criminal price-fixing cartel," Melanie Aitken, the commissioner of competition, said in a statement. "The bureau will not hesitate to take action when it uncovers evidence of illegal price-fixing."

The bureau said it is continuing to investigate potential cases of gasoline price-fixing in southeastern Ontario.

As for the specific fines, the bureau said Canadian Tire was fined $900,000, Pioneer $985,000 and Mr. Gas $150,000.

In another recent case, 38 people and 14 companies were charged in connection to fixing gas prices in the Quebec cities of Victoriaville, Thetford Mines, Magog and Sherbrooke.

Les Petroles Therrien Inc., operating under the Petro-T banner; Ultramar; Philippe Gosselin and Associes, operating under a Shell banner; and Les Petroles Cadrin, operating under Sonerco, were four of the main companies involved in the case. They pleaded guilty in 2008 and paid fines of more than $2.7 million.

That investigation had dated back to 2005. READ MORE...

Creating Successful Programs for Global Compliance March 2728 2012

Dow Jones Global Compliance Symposium — Tue, 20 Mar 2012 16:17:11 -0700

Regulatory agencies in the U.S. and abroad are starting to release guidance on new regulations. Now what?

Join leading compliance officers, general counsel, and other legal, compliance and ethics professionals for two days of unparalleled networking and peer-to-peer learning about how to create successful compliance programs that help you avoid wrongdoing, protect you from regulatory violations and prepare you to respond to issues once they arise.

Hosted by editors from Dow Jones and The Wall Street Journal, the Global Compliance Symposium will provide practical strategies for developing strong compliance programs with leading government officials. Focused breakout sessions will allow participants to drill-down into key areas of interest, including:

Anti-Money Laundering – Compliance Technologies – Financial Services – Insider Trading – Social Media – Africa – Russia – The U.K. – and much more…

Confirmed speakers for the 2012 program include:

Francisco Hernandez, General Counsel for Latin America and the Caribbean, Tyco International
Jo Levy, Global Director, Legal Compliance, Intel Corp.
Marie Wilson, Senior Manager of Office of Ethics and Compliance, Symantec Corporation
Yvette Hollingsworth, Managing Director & Head, Financial Crime Compliance, Barclays Capital
Andy Hinton, Associate General Counsel & Chief Compliance Officer, Google Inc.
Ashley Watson, VP, Chief Ethics and Compliance Officer, Hewlett-Packard Co.
Suzanne Folsom,SVP, Chief Regulatory & Compliance Officer and Deputy General Counsel, ACADEMI LLC
Doug Lankler, SVP, Chief Compliance Officer, Pfizer
Mike Koehler, Assistant Professor of Business Law, Butler University and Author of the FCPA Professor Blog
Ty Cobb, Partner, Hogan Lovells
Herbert A. Igbanugo, Founding Shareholder, Igbanugo Partners Int’l Law Firm PLLC
Mark F. Mendelsohn, Partner, Paul, Weiss, Rifkind, Wharton & Garrison LLP

Don’t miss your chance to join top compliance officers from the world’s leading corporations, both internal and outside legal counsel, other legal professionals and top regulatory officials for this essential event in one of the most important areas of business today.

Start your learning now at the GCS Resource Center: http://www.dowjones.com/events/resources/gcs

Registered Participants Only: Have you created your Pathable profile yet? Join other conference speakers and attendees in this exclusive online community, created specifically to enhance your conference experience. Get a head start on your networking, set up meetings or begin discussions with other participants about those issues most important to you.

To get started, click here: http://gcs-dowjones.pathable.com. REGISTER

Inside the mind of Madoff Exclusive The Secret Madoff Prison Letters

Diana B. Henriques, Contributor — Tue, 20 Mar 2012 12:12:16 -0700

This article appears in the April 9 issue of Forbes Magazine.

Bernie Madoff hated e-mail. He rarely used it at his high-tech Wall Street trading firm. When others did, he fretted about the trail it left behind. He wasn’t crazy about letters, either. A staffer had standing orders to destroy his correspondence with one important client. Even after December 2008, when the world learned that Madoff had run the largest Ponzi scheme in history, few personal letters surfaced. He always preferred to deal with people face-to-face.

But early in his 150-year prison sentence that all changed. His wife, Ruth, stopped visiting. His estranged older son, Mark, committed suicide; his surviving son, Andrew, never visited and swore he never would. His encounters with the world beyond the prison’s razor-wire perimeter shrank down to occasional meetings with lawyers.

In September 2010, in the first months of this intensifying isolation, Bernie Madoff became my pen pal–forced by captivity to rely almost entirely on e-mail and letters to carry out his last, desperate mission.

That mission: rewriting history–his own history. Where better to start than with his biographer?

I first interviewed Madoff in person at the medium-security prison in Butner, N.C. in August 2010 for my book The Wizard of Lies (Times Books, 2011). It traces the roots of his dishonesty to 1962 and details his many cliff-hanger escapes from detection, his precipitous downfall in 2008 and the epic legal struggle over the wreckage he left behind.

After that first visit–I saw him again early last year– we began to exchange letters. Soon Madoff enrolled me in the closed prison e-mail system. We have corresponded ever since, at least monthly, more often weekly, sometimes several times a day.

At first he simply responded to follow-up questions for my book. But even after The Wizard came out in hardcover last spring, his need to reach out has continued. Perhaps he believes he can use me to “set the record straight,” despite our profound disagreements about what that record is. Maybe he is trying to paint a more bearable portrait of himself in his own mind, and our correspondence is just a tool for doing that. READ MORE...

The Corruption Challenge Unmasking the Handlers

ACFE — Tue, 20 Mar 2012 11:31:04 -0700

INTERVIEW WITH NICK KOCHAN

Investigative Journalist and Freelance Writer and keynote speaker at the ACFE European Fraud Conference, 25-27 March in London

You plan to address “The Corruption Challenge” in your presentation. What are some of the current challenges you see anti-fraud professionals facing?

The Western investigator faced with investigating funds introduced into his country’s banking system from a foreign power or individual has a number of challenges. First, he has to negotiate complex political systems in the country from which the funds have been allegedly stolen to obtain evidence. His capacity to investigate the funds may be impeded if the funds are not recognised as stolen, or not removed as a result of a corrupt act.

For example, those engaged at the highest levels of many countries will seek to form conspiracies with business entities and their owners, to blend corrupt money with legitimate proceeds of the business. This is a classic money-laundering technique to disguise sources, and it tests the investigation to seek to disinter the corrupt from the quasi-genuine. That said, the businessman who connives with the corrupt politician is a party to the laundering, and he is likely to be a beneficiary as a result of providing a favour to the politician.

The investigator’s task of extracting details from a country where political corruption is rampant is likely to be coloured by a regime of fear and silence. Even where investigations are triggered by a change of regime (such as recently in the Arab Spring), information from new incumbents may not be forthcoming, it may not be reliable, or it may have been obtained in ways that are not supportable in a UK or European court. READ MORE...

2012 PDA FDA Joint Regulatory Conference

Parenteral Drug Association — Fri, 16 Mar 2012 09:42:38 -0700

Compliance through Quality Systems: Implementing & Advancing a Sustainable Global Quality Culture

September 10-12, 2012 | Baltimore Marriott Waterfront Hotel | Baltimore, Maryland
Exhibition: September 10-11 | Post- Conference Workshop: September 12-13 | Courses: September 13-14

Program Highlights

“The 2011 PDA/FDA Joint Conference was excellent. I was impressed by the large number of participants which expanded my networking opportunities.” Lynn Collins, BD

“Cross-cutting topics such as combination products, global supply chain and emerging markets are just a few of the pulse areas for today’s industry, where the collaboration of the PDA and FDA are vital in providing a forum for exchange. This conference truly provides something for everyone, regardless of your capacity in the industry.” Winston Brown, Baxter Healthcare

“It was great to listen and be able to meet and talk with the FDA speaker. I am back to France with a lot to share with my company.” Brigette Gayet, Guerbet

Important Deadlines – Register before June 29, 2012 - the first registration savings deadline | Hotel Cut Off: August 10, 2012

READ MORE...

CIT Group offers to pay $75 million to end fraud lawsuit

Basil Katz — Wed, 14 Mar 2012 10:45:42 -0700

(Reuters) - CIT Group Inc (CIT.N) on Tuesday asked a federal judge to approve a $75 million settlement proposal with former CIT shareholders in a class-action securities fraud lawsuit over actions preceding the large commercial lender's 2009 bankruptcy.

The preliminary settlement, which was submitted for Manhattan federal court Judge Barbara Jones' approval, would put an end to a lawsuit brought on behalf of purchasers of CIT securities from December 12, 2006 to March 5, 2008.

CIT once lent to 1 million small- and mid-sized businesses, but filed one of the five largest bankruptcies in U.S. history on November 1, 2009, after loan losses surged. The New York-based company emerged in 2010 after a prepackaged reorganization.

CIT and the plaintiffs called the settlement a "very good result" and urged the judge to grant her initial approval of the proposed deal. The deal calls for CIT to pay $75 million in cash to be distributed among class members.

"Given the complexities and the continued risk the parties would face if the litigation were to proceed, the settlement represents a reasonable resolution to the parties' disputes and eliminates the risk that the settlement class might recover nothing, or a vastly smaller amount, following trial and inevitable appeals," the proposed agreement said. READ MORE...

SEC charges five with insider trading from AA tip

Sarah N. Lynch — Wed, 14 Mar 2012 10:38:48 -0700

(Reuters) - Securities regulators charged two Ameriprise Financial advisers and three others with insider-trading, saying they made $1.8 million in illicit profits based on confidential merger information one of the advisers learned through an Alcoholics Anonymous relationship.

The Securities and Exchange Commission said Timothy McGee, one of the advisers, was tipped about a pending merger of insurer Philadelphia Consolidated Holding Corp and Tokio Marine Holdings.

The SEC said he learned of the deal from a Philadelphia Consolidated senior executive who was confiding in him through their relationship at Alcoholics Anonymous about pressures he was confronting at work.

McGee purchased Philadelphia Consolidated stock in advance of a merger announcement on July 23, 2008, and tipped Michael Zirinsky, a fellow Ameriprise adviser, the SEC said.

Zirinsky bought stock for himself and also for accounts that belonged to his wife, mother and grandmother, the agency said. He also told his father, Robert Zirinsky, and a friend in Hong Kong, Paulo Lam, about the tip.

Lam in turn informed another friend, and that friend's wife, Marianna sze wan Ho, also traded on the non-public tip, the SEC said. READ MORE...

SEC charges Thornburg mortgage execs with fraud

Aruna Viswanatha and Jonathan Stempel — Wed, 14 Mar 2012 10:31:35 -0700

(Reuters) - Three former executives at now-bankrupt Thornburg Mortgage Inc have been charged with fraud by the U.S. Securities and Exchange Commission, accused of hiding the fast-deteriorating financial condition of the large home lender.

The SEC said on Tuesday that former Chief Executive Larry Goldstone, former Chief Financial Officer Clarence Simmons and former Chief Accounting Officer Jane Starrett schemed to fraudulently overstate Thornburg's income by more than $400 million in its 2007 annual report.

According to the SEC, this occurred even as Thornburg, based in Santa Fe, New Mexico, was facing a liquidity crisis and substantial margin calls from its lenders in the weeks before it filed its 2007 annual report on February 28, 2008.

The complaint filed in a federal court in New Mexico quotes a February 25, 2008 email from Starrett to Goldstone and Simmons saying: "We have purposely not told <the auditors> about the margin calls so that we don't escalate an issue which we believe will be put to rest" by the time they issue their opinion.

SEC enforcement chief Robert Khuzami said in a statement on Tuesday: "The truest test of corporate executives' commitment to full and accurate shareholder disclosure comes not during times of soaring profits and double-digit growth, but when companies are under financial stress and shareholders have the greatest need for accurate information." READ MORE...

Fraud investigation targets recruiting program for Army National Guard Reserve

Robert O�Harrow Jr., Published: March 13 — Wed, 14 Mar 2012 10:13:59 -0700

A recruitment campaign to boost the Army National Guard and Reserve at a difficult time in Iraq and Afghanistan is the focus of a wide-ranging Pentagon fraud investigation, including allegations of kickback schemes involving military personnel, internal documents show.

The alleged fraud involves programs that paid $2,000 bounties to soldiers or civilians who signed up as “recruiting assistants” and brought in new enlistees. Investigators have found evidence that recruiters for the Guard and Reserve who were not eligible for the bounties worked with some recruiting assistants to secretly secure and split up the money.

More than 1,700 recruiters and hundreds of recruiting assistants are under scrutiny for $92 million in potentially fraudulent transactions — more than a quarter of all the bounty money paid, according to an internal Army Audit Agency document. Investigators have found that dozens of the recruiters apparently shared bank accounts with individuals who received bounties.

Faced with a report on the abuses, Army Secretary John McHugh canceled the programs and ordered a probe of “systemic weaknesses and shortfalls, some of a potentially criminal nature,” according to an internal memo signed by McHugh on Feb. 9. READ MORE...

Whistleblowers drawn by tipoff payouts

Financial Times - Kara Scannell in New York — Wed, 14 Mar 2012 09:51:19 -0700

Company informants tempted by the prospect of multimillion dollar payouts are rushing to US regulators with audio recordings and internal documents to take advantage of a new programme that can make whistleblowing on wrongdoing lucrative, lawyers and regulators say.

Many of the complaints, lawyers say, involve allegations of accounting fraud and foreign bribery at financial and industrial companies. Others include allegations of market manipulation or other crimes by hedge funds and private equity firms. READ MORE...

On the DoddFrank act and regulation in America

Letters to Economist — Tue, 06 Mar 2012 16:01:57 -0800

In defence of Dodd-Frank

SIR – As America and the world struggled to recover from an historic economic crisis, Barney Frank and I were not concerned about the page length of our proposal or about more work for financial regulators. We were, however, concerned about the millions of Americans who lost their jobs, the $648 billion of lost income for American households, the millions of Americans who are still losing their homes, and the trillions of taxpayer dollars required to prevent a global meltdown.

Your analysis of the implementation of the Dodd-Frank act (“Too big not to fail”, February 18th) irresponsibly ignores that history. This is not 1864 or 1913, and a simple solution would not have fixed the myriad problems that led to this crisis.

A comprehensive overhaul of our regulatory structure was required to keep up with a 21st century global financial marketplace. To limit our response to 30 or 40 pages would have made easier reading, but that would have been the height of irresponsibility. You suggest that we would instead be better off repealing Dodd-Frank, returning to a world where taxpayers bail out failing financial firms, predatory lenders and unscrupulous brokers prey on vulnerable homeowners, the public absorbs losses because of Wall Street’s risky behaviour, and regulators are left in the dark, unable to prevent another global financial meltdown.

Over the past two years critics of Dodd-Frank have had ample opportunity to craft changes to the legislation. Instead, they tried to kill it. Now, as its implementation begins, those critics have the choice of working with regulators to make the system safer, or simply to roll back sensible reforms, such as the creation of an agency to protect consumers from the kind of abusive practices that spawned this crisis in the first place.

Christopher Dodd
Former senator for Connecticut
Washington, DC

SIR – Does The Economist seriously contend that the grave, systematic and repeated errors of the ratings agencies were irrelevant to the causes of the financial crisis? Simply repeating the claims of a few in the industry, who fear that we are moving away from the disastrous era of light-touch regulation, falls short of the independent analysis that your readers have a right to expect.

Barney Frank
Former chairman of the House Financial Services Committee
Washington, DC

READ MORE...

The DoddFrank act Too big not to fail

Feb 18th 2012 - Economist — Tue, 06 Mar 2012 15:55:22 -0800

SECTIONS 404 and 406 of the Dodd-Frank law of July 2010 add up to just a couple of pages. On October 31st last year two of the agencies overseeing America’s financial system turned those few pages into a form to be filled out by hedge funds and some other firms; that form ran to 192 pages. The cost of filling it out, according to an informal survey of hedge-fund managers, will be $100,000-150,000 for each firm the first time it does it. After having done it once, those costs might drop to $40,000 in every later year.

Hedge funds command little pity these days. But their bureaucratic task is but one example of the demands for fees and paperwork with which Dodd-Frank will blanket a vast segment of America’s economy. After the crisis of 2008, finance plainly needed better regulation. Lots of institutions had turned out to enjoy the backing of the taxpayer because they were too big to fail. Huge derivatives exposures had gone unnoticed. Supervisory responsibilities were too fragmented. Dodd-Frank, named after its co-sponsors, Senator Chris Dodd and Congressman Barney Frank, attempted to address these issues (section 404 is one of those aimed at excessive risk exposure). But there is an ever-more-apparent risk that the harm done by the massive cost and complexity of its regulations, and the effects of its internal inconsistencies, will outweigh what good may yet come from it. READ MORE...

RESPONSE LETTERS TO ECONOMIST FROM Christopher Dodd and Barney Frank

Executive Pay Votes Spur Shifts in Policies

JOANN S. LUBLIN — Fri, 02 Mar 2012 16:16:33 -0800

Shareholder votes on executive pay are starting to change the shape of compensation at some big companies.

A group of institutional investors recently joined forces to seek executive-pay and governance changes at 10 companies where nonbinding "say on pay" votes narrowly passed last year.

The informal coalition, led by unions and public pension funds, already has persuaded Allstate Corp., Northern Trust Co. and five other companies to ban "gross-up" payments to executives. Those payments cover taxes executives owe on benefits provided by their employer.

Coalition members also withdrew 2012 shareholder resolutions opposing pay policies after a few companies required top managers to hold their company's stock longer and put limits on accelerated vesting of equity grants after a takeover.

"The changes demonstrate that say-on-pay votes are working to make companies more responsive to shareholder concerns about runaway CEO pay levels," said Brandon Rees, deputy director for the AFL-CIO's Office of Investment.

He helped coordinate the coalition, which includes the International Brotherhood of Electrical Workers union and the pension system for firefighters in Kansas City, Mo.

In legally mandated advisory votes on executive-compensation policies last year, 358 publicly held companies got less than 80% support from their investors, according to proxy adviser Institutional Shareholder Services.

Some of those companies have revamped pay practices, rather than face investor criticism during annual meetings this year.

Among them is Allstate. The big insurer got the support of about 58% of the votes cast for its executive-pay practices, and Chief Executive Tom Wilson was re-elected to the board by just 68% of the votes, the lowest margin last year for any CEO of a company in the Standard & Poor's 500-stock index, according to ISS.

After the vote, Mr. Wilson spoke with owners of 30% of Allstate's shares, because he wanted to know "why people were concerned," he said in an interview. "My job is to make our shareholders happy," he said.

As a result of those efforts, the company was on its way to changing its practices when coalition members submitted four resolutions for this year's annual shareholders' meeting, Mr. Wilson said.

During talks, Allstate accepted a compromise suggested by the firefighters pension plan: require executives to hold on to 75% of their company shares until they meet their stock-ownership requirements. READ MORE...

Rwanda Whistleblowers Protection Act Vital MPs

James Karuhanga, — Thu, 01 Mar 2012 16:30:17 -0800

MPs in the lower chamber of Parliament Tuesday stressed that the Whistleblower Act will create awareness so that people, rise above fears of possible reprisals and play a more proactive role to flush out violations of the law.

This was after the committee on national budget and patrimony presented a report on the draft law, to the plenary, after a final scrutiny of the bill together with pertinent government officials, earlier in the morning.

In a lengthy debate yesterday, Constance Mukayuhi and Abbas Mukama, the Committee's Chair and Deputy Chairpersons, respectively told the House that the law was very sensitive and crucial.

Once promulgated, the act will ease difficulties often experienced by law enforcement organs in exposing crimes such as corruption, murder, and many others, Mukayuhi said.

"Think about the difficulty in exposing corruption; think about the difficulty in exposing an intended murder. I believe that even in the standpoint of a strategy to curb crime, this law also puts emphasis on prevention of crime," Mukayuhi said.

"It will enable law enforcement organs, those responsible for fighting corruption, organs responsible to get enough information so that they can prevent crime or misconduct, before it happens."

Mukayuhi stressed that Rwandans need to have ownership of the good governance drive. She said that though there were awareness campaigns, they must go hand-in-hand with relevant laws.

She explained that it will ensure that citizens participate in making sure various professional ethics are adhered to and the law is respected. More punitive measures will be highlighted in the yet to be passed penal code.

It is not clear which of the legislations - the whistleblower law or the penal code - will be passed first, but it was noted that most offenders, if finally found guilty by courts of law, will be punished according to their respective codes of ethics.

Doctors and other professionals have relevant guiding codes of ethics that they must adhere to. It is clear that whistleblowers can also provide information on cases where leaders in public offices fail on service delivery.

Venantie Tugireyezu, the Minister in the President's Office, also backed the bill's importance in the House. READ MORE...

Keeping Cool in the Hot Seat

Kate O'Sullivan — Thu, 01 Mar 2012 13:56:05 -0800

The CFO’s role has expanded in recent years, perhaps most notably in the area of risk management. Finance chiefs frequently took charge of assessing and guarding against risk during the financial crisis, and as the economy has slowly recovered, few have relinquished the task. More than half of the finance executives responding to CFO’s latest Deep Dive Survey say their responsibility for risk management has increased over the past two years, while just 3% say it has declined.

Overall, 72% of survey respondents say their companies have increased the amount of time and resources devoted to risk management over the past two years, with 23% calling the increase significant. Most are satisfied with the way their companies approach risk, as 66% say they have struck the right balance: neither too cautious nor too aggressive. Maybe that’s because, at nearly half of the companies surveyed, the CFO bears most responsibility for risk management, followed distantly by the CEO at 24%.

As for the risks finance executives deem most critical, “customer demand and profitability” tops the list, with two-thirds of CFOs calling it one of their biggest areas of concern. While many finance chiefs report signs of an improving economy, the shakiness of the recovery means this is an “ongoing risk,” according to Kevin Lamb, CFO at Sauder Woodworking, a manufacturer of ready-to-assemble furniture sold through large retail chains like Wal-Mart and Target. READ MORE...

Risk and Compliance Webcast

Victor Anderson — Thu, 01 Mar 2012 11:53:18 -0800

Waters gathered leading industry experts to discuss the latest developments in the risk management and compliance space in a webcast.

Risk management and compliance have emerged as two of the most important business processes in the wake of the recent market downturn, as institutions look to get a better understanding of the risks associated with investment decisions, while regulators and investors have come to expect far greater transparency into investment operations in ever decreasing timescales. Risk management is also moving from an ex-post to an ex-ante basis, which places new pressure on firms to manage large numbers of computations in ever decreasing timeframes.

- What technologies are available to firms trying to get as close to a real-time view of their risk exposure as possible?
- What are the challenges facing financial institutions is developing a cross-asset, firm-wide view of their risk exposure?
- To what extent are compliance functions within financial services firms being driven by external factors (regulators and investors) as opposed to internal ones?
- Liquidity risk has the potential to ‘kill' a firm faster than any other risk challenge. How are financial institutions and third party vendors addressing this issue?

CLICK HERE to listen to the archived webcast

Insider Probe Targets a Top Goldman Manager

SUSAN PULLIAM And MICHAEL ROTHFELD — Wed, 29 Feb 2012 15:56:51 -0800

Wall Street's most high-profile securities firm is being drawn further into the government's insider-trading investigation.

Federal criminal authorities are investigating whether a top Goldman Sachs Group Inc. manager passed inside information about technology stocks to the firm's hedge-fund clients, people close to the situation said.

David Loeb, a Goldman managing director who acts as a middleman between the Wall Street firm and some of its most important hedge-fund clients, is the latest Goldman official to be investigated in the insider-trading probe. As a senior Goldman salesman, Mr. Loeb deals with many technology hedge-fund employees.

Mr. Loeb, 41 years old, declined to comment, as did Goldman. Known at Goldman and among clients as self-deprecating and colorful, Mr. Loeb sometimes signs his emails "cbf," for "chunky but funky."

Mr. Loeb, a technology specialist who speaks Chinese, worked closely with a Goldman technology analyst, Henry King, whose activities also are being investigated by criminal authorities in connection with information he provided to Goldman hedge-fund clients about technology companies, people close to the situation said. Mr. King, a managing director based in Hong Kong, didn't return calls for comment. READ MORE...

Exclusive Justice Department conducting criminal Libor probe

Carrick Mollenkamp — Tue, 28 Feb 2012 14:09:47 -0800

(Reuters) - The Justice Department is conducting a criminal probe into whether the world's biggest banks manipulated a global benchmark rate, according to a person familiar with the situation.

While the Justice Department's inquiry into how the London interbank offered rate, or Libor, is set had been known, the criminal aspect of the probe was not.

A criminal inquiry underscores the serious nature of a worldwide investigation that includes regulators and law-enforcement agencies in the United States, Japan, Canada and the UK.

A Justice Department spokeswoman declined to comment.

Libor is set everyday in London for 10 currencies for a range of maturities. The rate is supposed to reflect the rate at which banks lend to one another. Dollar Libor, for example, is calculated after 18 banks submit the costs to borrow dollars.

The investigations are examining whether traders at the banks tried to influence whether the rate went up or down. A change in the rate could produce tens of millions of dollars if a trader has bet correctly on the direction of Libor.

A number of big banks have disclosed in regulatory filings that the Justice Department was investigating the matter.

Swiss bank UBS AG is playing a key role in the probes because it agreed to come forward and cooperate in the inquiries. READ MORE...

Japan regulator investigates broker in pension scandal sources

Mon, 27 Feb 2012 10:29:30 -0800

(Reuters) - Japan's securities watchdog is investigating a small Tokyo-based broker, ITM Securities Co, over its possible role in a scandal involving the suspected disappearance of more than $2 billion in corporate pension funds, two sources with knowledge of the matter said.

Tokyo-based AIJ Investment Advisors was ordered to halt operations on Friday on suspicion that it has lost most of the roughly 210 billion yen in assets it managed on behalf of clients, mainly smaller firms.

The Securities and Exchange Surveillance Commission (SESC) is also investigating the role of ITM, which is located in the same small office building as AIJ in central Tokyo and acted as its agent in selling AIJ funds, the sources said.

The sources spoke on condition of anonymity because the investigation is not public.

As a policy the SESC does not comment on individual cases.

AIJ could not be reached for comment.

Yasuo Tsuneyoshi, an official at ITM Securities, said he could not comment about any potential investigation related to the AIJ scandal.

ITM Securities has 17 employees and was established in 1998 by Hideaki Yoshimura, a former executive at Yamaichi Securities before it collapsed in the late 1990's in one of Japan's largest bankruptcies, according to ITM's website. READ MORE...

Alberta doctors bullied by bosses panel finds

CBC - Canadian Press — Thu, 23 Feb 2012 14:17:18 -0800

A report released Wednesday found that patient wait times are too long in Alberta, and doctors who advocate for the care of their patients face widespread intimidation.

Patients wait too long in emergency rooms and doctors dare not advocate for patients if they want to keep their jobs, according to a report on Alberta's healthcare system.

The Alberta Health Quality Council panel, which authored the report, said it has found widespread instances of physicians experiencing intimidation and muzzling when advocating for patients, evidence of a culture of fear and alienation across the province.

The panel said the provincial government doesn't need a full-scale inquiry into doctor intimidation and should instead spend that money on combatting the problem.

It issued 21 recommendations, including creating a task force to develop clear lines of authority in Alberta Health Services (AHS) and halting further restructuring in the health system until a clear plan is in place that allows physicians to advocate.

The report says the province has tried to change too much too quickly in the health-care system over the past four years. It accuses politicians of meddling and says doctors have been cut out of the important decisions over how the system is run.

"Doctors are saying to us that they're worn out. In fact, we were quite alarmed to learn that many have just disengaged," Dr. John Cowell said at a news conference Wednesday where the report's results were unveiled.

"They're simply not going to get involved anymore." READ MORE...

This is only an outline Looking closely at DoddFrank

The Economist online — Thu, 23 Feb 2012 10:58:09 -0800

Jonathan Macey of Yale Law School explains why the Dodd-Frank bill might not have prevented the financial crisis, but will create jobs for regulators and lawyers. View Video

ExBond Highflier Is Warned by SEC

JEAN EAGLESHAM — Tue, 21 Feb 2012 14:39:14 -0800

U.S. securities regulators have warned a former top architect of the structured-finance boom that they are considering civil charges alleging he misled investors in a mortgage-bond deal that imploded, people familiar with the situation said.

Alexander Rekeda, who led Japanese bank Mizuho Financial Group Inc.'s charge into the then-red-hot business of U.S. subprime debt in 2006, was warned by the Securities and Exchange Commission in October that he faces the potential charges, according to a regulatory filing. Mr. Rekeda received a so-called Wells notice, a letter typically giving the recipient a final opportunity to dissuade the SEC from filing an enforcement action.

It isn't clear how Mr. Rekeda responded to the warning, but SEC officials haven't dropped the case, according to people familiar with the matter. Civil charges could be filed by this summer, these people said, though the process has been slowed by the large number of individuals and companies involved in the probe and the complexity of some legal issues related to the case.

A lawyer for Mr. Rekeda declined to comment. READ MORE...

Exclusive SEC widens probe of exchangetraded funds

Jessica Toonkel, Carrick Mollenkamp and Cezary Podkul — Tue, 21 Feb 2012 10:11:17 -0800

(Reuters) - U.S. securities regulators have widened their inquiry into the trillion-dollar market for exchange-traded funds, according to a person familiar with the matter.

Prompted by a delay in a big trade at a popular ETF, the U.S. Securities and Exchange Commission is taking a closer look at a possible connection between high-frequency traders and hedge funds jumping in and out of ETFs, and instances where ETF trades fail to settle on time, this person said.

The SEC's inquiry is part of a wider probe that began last year and focused on complex ETFs that allow investors to magnify returns or bet against stock indexes.

U.S. and UK regulators are concerned that so-called settlement fails - when trades are not completed on time - could contribute to volatility and systemic risk in financial markets.

The probe's main focus is on illiquid ETFs, but regulators are now also examining popular ETFs and failed trades, according to the person.

An SEC spokesman confirmed that the agency is looking into failed trades and ETFs, but declined to elaborate.

The SEC's inquiry comes amid greater scrutiny of the ETF industry, which has surged in popularity since the early 1990s. It is still unclear how settlement delays might affect retail investors in ETFs.

ETFs are baskets of securities that, like mutual funds, give investors exposure to a pool of assets. But unlike mutual funds, they trade throughout the day. Early ETFs were created to mirror benchmarks such as the Standard & Poor's 500 index. ETF assets have doubled since 2007 to about $1.3 trillion, according to Deutsche Bank AG. Some of the most popular ETFs are those that use derivatives to give investors exposure to commodities, high-yield bonds or ETFs that own other ETFs. READ MORE...

DoddFrank in One Graph We read DoddFrank so you dont have to

Karen Weise — Mon, 20 Feb 2012 12:45:34 -0800

Big portions of the financial reform law are set to go into effect this year. Intended to make corporate practices transparent, the law itself is anything but. The government has yet to spell out the details of most of the 400 new regulations it imposes. A non-headache-inducing guide. READ MORE...

ACFE Annual Fraud Conference Stories from behind the scenes

Mandy Moody — Mon, 20 Feb 2012 09:42:20 -0800

Vindication. The one word to aptly sum up the tumultuous rollercoaster ride for whistleblower and ex-CEO Michael Woodford after hearing news break yesterday that Japanese prosecutors had arrested three of Olympus’ top executives and four of its consultants for a $1.7 billion fraud.

At each twist and turn of the Olympus scandal, I have followed Woodford’s plight and watched anxiously as he has moved from accuser to whistleblower to now, crusader, in a saga that is not even close to being finished. This story, along with many others, will be just a few of the highlights at the 23rd Annual Fraud Conference & Exhibition in Orlando this June.

Woodford is one of five keynote speakers to address the more than 2,300 anti-fraud professionals at this year’s Conference. Joining him is U.S. Senator Chris Dodd, co-author of the Dodd-Frank Act; Pamela Meyer, CFE, best-selling author of Liespotting; Diana Henriques, The New York Times senior financial writer and author of The Wizard of Lies; and Mark Whitacre, convicted fraudster and subject of “The Informant.”

To add to the keynote roster, the more than 60 breakout sessions spread out over 12 tracks round out a conference offering something for everyone. Here are a few session titles to spark your curiosity: READ MORE...

Traders Manipulated Key Rate Bank Says

JEAN EAGLESHAM, PAUL VIEIRA and DAVID ENRICH — Fri, 17 Feb 2012 15:49:32 -0800

A group of traders and brokers successfully managed to manipulate an interest rate that affects loans around the world, one of the banks being investigated has told regulators.

In a court filing in Ottawa, Canada's Competition Bureau said a bank it didn't identify has told the agency's investigators that people involved in the alleged scheme "were able to move" interest rates.

People familiar with the situation said the "cooperating party" is UBS AG.

The Swiss bank has said it is assisting regulators in a sprawling interest-rate probe in North America, Europe and Asia, which has led to a score of individuals being fired or suspended by major U.S. and European banks and leading brokers.

No banks or individuals have been charged with wrongdoing.

The benchmark interest rates at the center of the probe are used to price home and auto loans, corporate debt and derivatives totaling more than $350 trillion. READ MORE...

Citigroup pays $158 million in mortgage fraud pact

Jonathan Stempel — Fri, 17 Feb 2012 13:02:14 -0800

(Reuters) - Citigroup Inc has agreed to pay $158.3 million to settle U.S. civil claims that it defrauded the government into insuring thousands of risky home loans made by its CitiMortgage unit.

Wednesday's settlement resolves claims under the federal False Claims Act against the third-largest U.S. bank, and arose from a "whistleblower" lawsuit brought by Sherry Hunt, a CitiMortgage employee in Missouri.

CitiMortgage "admits, acknowledges and accepts responsibility" for misleading the government into insuring risky home loans, according to settlement papers filed in U.S. District Court in New York. Investigators said the misconduct lasted for more than six years.

The civil fraud case is part of a crackdown by the Department of Justice against lenders it believes contributed to the housing crisis by originating risky home loans that should not have been made, insured or sold. READ MORE...

Onts air ambulance program under investigation

Tristin Hopper, Postmedia News — Fri, 17 Feb 2012 12:19:36 -0800

TORONTO — Long suspected of mismanaging taxpayer funds, Ornge, Ontario's non-profit air ambulance service, has become the subject of a criminal investigation.

"The (Ontario Provincial Police) is conducting an investigation into possible criminal activities on the part of Ornge," Acting Insp. Cathy Bell said on Thursday. The OPP's Criminal Investigation Branch was summoned by the Ministry of Health, acting on preliminary data from auditors.

The police investigation is only the latest review to strike the provincial agency. Officials with the Ministry of Finance are continuing with a forensic audit, the provincial auditor general is conducting a "value-added audit" and the agency's own staff has begun an internal review of "all policies and procedures," wrote Ornge Chief Operating Officer Tom Lepine in a January statement. Lepine resigned this week.

Scrutiny of the air ambulance service emerged out of late-2011 revelations that CEO Chris Mazza was earning $1.4 million a year, effectively making him the province's highest-paid civil servant. Mazza is also accused of taking out more than $1 million in loans from the non-profit.

For years prior, former employees had been attempting to sound the alarm on Ornge, pointing to its high executive salaries and the "Crystal Palace," its posh headquarters near Toronto Pearson International Airport. Prominent in the lobby was a custom-built $50,000 motorcycle, a gift from Ornge's Italian helicopter supplier. READ MORE...

Minority report Corporate governance explains South Koreas low stockmarket ratings

Seoul - The Economist — Fri, 17 Feb 2012 11:59:34 -0800

IT is sometimes asserted that low South Korean equity valuations stem from the threat of instability in North Korea. That explanation looked a lot less convincing after the death of Kim Jong Il in December, when the KOSPI 200 index of leading shares and the won, the South Korean currency, both quickly shrugged off the news.

So what is the source of the “Korea discount”, which means that the KOSPI has a forward price-to-earnings ratio of under ten, below most other Asian stockmarkets. There are a few possibilities. The national economic model is still built on exports, often in highly cyclical industries such as shipbuilding. The capital structure of South Korean firms has historically been debt-heavy.

But the prime cause of the discount is more likely to be poor corporate governance at the family-run chaebol conglomerates that dominate the economy. Nefarious schemes to pass on control to sons, avoid taxes and exploit company assets for the benefit of family members are widely discussed in private. They are also lambasted abroad: a 2010 survey by CLSA, a broker, placed the country third-from-bottom in Asia on governance, ahead of only Indonesia and the Philippines.

The issue is now also getting more of an airing at home. A recent report by Tongyang Securities, a broker, drew an explicit link between Korea’s low equity valuations and the practices of “tunnelling” and “propping”, which benefit insiders at the expense of smaller investors. READ MORE...

Sask care home operator jailed for theft from client

By Lori Coolican, Postmedia News — Fri, 17 Feb 2012 11:06:26 -0800

Michelle Millora was sentenced to 15 months in jail on Wednesday for stealing from a care home resident she was responsible for.

SASKATOON — A former operator of a Saskatoon care home who used a mentally ill client's debit card to steal nearly $100,000 is headed to jail for the crime.

Michelle Millora, 36, received a 15-month sentence in Court of Queen's Bench on Wednesday. She pleaded guilty in December to stealing $98,850 and attempting to steal another $19,101 from 58-year-old Wendy Braid between October 2009 and May 2010.

Millora's actions were "a blatant breach of trust of the most vulnerable of vulnerables in society," Justice Mona Dovell said.

Braid has suffered from severe psychiatric conditions for more than 20 years and has lived in various care homes since 2000. In 2009, while living at a licensed home operated by Millora, she inherited about $168,000 from the estate of her estranged husband, who died in 2007.

Millora heard about the windfall, and got the PIN number for Braid's bank card by looking over her shoulder during a visit to a cash machine, court heard.

There was no lock on the door to Braid's bedroom and on numerous occasions during the fall and winter of 2009-10, she noticed her bank card was missing from her wallet.

Braid told family and close friends that she suspected someone at the care home was using her bank card, but due to her illness, they didn't take it seriously at first.

That changed on May 7, 2010, when Braid stopped at a cash machine, accompanied by relatives who were visiting from out of province. When she tried to withdraw a small sum, the machine notified her that her daily cash limit had already been reached.

Investigators subsequently found more than 300 suspicious transactions — including $77,000 worth of large cash withdrawals from a single bank machine at a convenience store where Braid had never been before. Surveillance camera footage from that location clearly showed Millora repeatedly using the ATM at times that matched the withdrawals. READ MORE...

Alleged Ponzi scheme promoters worked outside scope of jobs officials

By David Baines, Vancouver Sun — Fri, 17 Feb 2012 11:00:15 -0800

Investors may not be able to hold notary society, credit union liable for losses

A former financial planner at Coast Capital Savings Credit Union says he referred about two dozen people to a Vancouver notary who was promoting an investment scheme that regulators now fear is a multimillion-dollar Ponzi scheme.

Arvindbhai Patel told B.C. Securities Commission investigator Michele (Mike) Pesunti on Feb. 6 that he initially became involved in the scheme in 2005, when his wife was ill with cancer and he was on leave from work, according to court documents.

Patel said he was approached by notary Rashida Samji regarding the scheme, and subsequently referred 20 to 25 people who collectively invested $8 million to $9 million.

Patel told Pesunti that, on Feb. 3 and 5, he spoke to Samji, who assured him the investments were guaranteed in a notary trust account, and everybody would get their money back after the professional association for notaries audited the account.

However, Wayne Braid, chief executive officer of the Society of Notaries Public of B.C., said Samji didn't have her own practice, rather she acted a "roving" notary, filling in for other notaries who were sick or on vacation.

"She hasn't had a trust account in quite a number of years," he said.

Braid also said that if Samji was operating as an investment manager, she was operating outside the scope of a notary.

If this proves to be the case, investors will not likely be able to hold the society liable for any losses they might suffer. READ MORE...

Charged telemarketing firm may have BC victims

CBC News — Fri, 17 Feb 2012 10:51:03 -0800

As many as 6 calls a day demanded payment for goods never ordered

A CBC News investigation has revealed that a Montreal telemarketing company is continuing to operate despite facing more than two dozen charges — and some B.C. businesses might have fallen victim to the company’s alleged tactics.

Royal Oak Pet Clinic, north of Victoria, is alleged to be one of the targets of the company, Express Transaction Services Inc. (ETS).

The clinic was called three years ago by someone asking for their address, and a week later, started receiving unwanted office supplies and an invoice from ETS for more than $300.

When clinic office manager Teka Cook refused to pay, the harassing phone calls began — as many as six a day.

"It was bullying and it was harassment, because it was non-stop,” Cook told CBC News.

ETS's offices were raided in 2007 and the company was charged last fall with one count of fraud and 24 counts of deceptive telemarketing and misleading representations under the Competition Act.

The company has not been convicted of any of the charges.

The company also has kept operating, but possibly not for long. When contacted by CBC News, one of the managers claims the bad publicity will force ETS to shut down at the end of the month.

Cook said she is skeptical. "They'll keep phoning, until someone shuts them down," she said. READ MORE...

UBS Suspends Traders in Libor Probe

Megan Murphy and Cynthia O�Murchu — Wed, 15 Feb 2012 14:23:08 -0800

UBS has suspended some of its most senior traders in connection with an international probe into the possible manipulation of interbank borrowing rates, in the latest controversy to hit the Swiss bank since the financial crisis.

Regulators in North America, Europe and Japan have been investigating whether traders at big US and European banks colluded to influence the London interbank offered rate, or Libor, and other benchmark lending rates.

That probe has widened in recent weeks, with more than a dozen traders fired, suspended or placed on administrative leave at banks including UBS, Royal Bank of Scotland, Deutsche Bank, JPMorgan Chase and Citigroup in connection with the investigation.

People familiar with the investigation told the Financial Times that Yvan Ducrot, the co-head of UBS’s rates business, and Holger Seger, the global head of short-term interest rates trading, are among a group of Zurich-based traders who have been suspended pending further inquiries into the bank’s rate-setting processes. READ MORE...

Obama proposes large budget boosts for SEC CFTC

Christopher Doering and Sarah N. Lynch — Wed, 15 Feb 2012 11:59:43 -0800

(Reuters) - The White House on Monday proposed big budget boosts for U.S. financial market regulators, which are months behind in finalizing Dodd-Frank reforms and are under pressure to more vigorously police markets in the wake of the 2007-2009 financial crisis.

The Securities and Exchange Commission would get an 18.5 percent funding increase, while the Commodity Futures Trading Commission would receive a 50 percent rise in spending under the Obama administration's fiscal 2013 budget.

The SEC's budget would rise to $1.566 billion from 2012's budget of $1.321 billion, while the CFTC would see a spending jump to $308 million from $205 million. President Barack Obama also called for legislation to fund the CFTC through user fees, bringing it in line with most other financial regulators.

"Without sufficient funding ... the nation cannot be assured that this agency can oversee the futures and swaps markets, that customers are protected, and that the public gets the benefit of transparent markets and lower risk," Gary Gensler, the chairman of the CFTC, said in a letter to lawmakers discussing the budget.

The Obama administration, under fire for a dearth of significant prosecutions related to the 2007-2009 financial and housing market meltdown, also called for adding $55 million to the Justice Department's proposed budget to prosecute financial crimes. READ MORE...

BC notary mutual fund salesman investigated in multimilliondollar fraud

By David Baines, Vancouver Sun — Wed, 15 Feb 2012 10:20:45 -0800

Regulators sound alarm over alleged Ponzi scheme

B.C. securities regulators are investigating the alleged involvement of a Vancouver notary and Surrey mutual fund salesman in a suspected multimillion-dollar investment fraud.

On Tuesday, the B.C. Securities Commission issued an “investor alert” warning investors not to send any money to notary Rashida Samji or mutual fund salesman Arvindbhai Patel.

“We felt it was important to warn investors not to send any money to either of these individuals,” BCSC enforcement director Lang Evans said in a news release.

The B.C. Society of Notaries Public has suspended Samji and appointed a custodian to take over her practice pending its own investigation. “This appears to be a financial fraud matter,” the society said in a Tuesday news release.

Patel has also been suspended. According to BCSC registration records, he was registered as a mutual fund dealer with Ontario-based Worldsource Financial Management Inc. in Surrey, but was employed as a financial planner at Coast Capital Savings Credit Union in Surrey.

According to an affidavit sworn by BCSC investigator Sharmin Lyon to obtain an investigation order, the scheme involved purported investments in a “real estate and import/export business involving wineries.”

It was referred to as the “Mark Anthony Investment,” but had no connection to the Mark Anthony Group, which owns the Mission Hill winery in Kelowna. READ MORE...

ExBear HedgeFund Managers Settle SEC Charges

JEAN EAGLESHAM — Mon, 13 Feb 2012 16:20:24 -0800

Two former Bear Stearns Cos. hedge-fund managers agreed with the Securities and Exchange Commission to settle civil-fraud charges for a total of $1.05 million.

In addition, the two managers of the Bear funds whose collapse in 2007 marked a prelude to the broader financial crisis also agreed to securities-industry bans. Ralph Cioffi agreed to a three-year ban and former co-manager Matthew Tannin agreed to a two-year ban, the federal judge overseeing the case was told Monday.

U.S. District Judge Frederic Block in the Brooklyn, N.Y., said he was "inclined to sign off" on the deal even though "it is being settled for, relatively speaking, chump change."

Representatives of Messrs. Cioffi and Tannin declined to comment.

An SEC spokesman said the proposed settlement payments and bans are "serious sanctions" that reflected "the defendants' misconduct, their ill-gotten gains and other considerations."

The SEC will detail its rationale for the deal in a written submission requested by the judge by Feb. 21, the SEC spokesman added.

If approved by the judge, the settlement will officially end one of the U.S. government's first efforts to tackle alleged wrongdoing during the lead-up to the financial crisis. READ MORE...

SEC looks into private equity industry practices WSJ

Karl Plume in Chicago; editing by Mohammad Zargham — Mon, 13 Feb 2012 10:51:43 -0800

(Reuters) - The Securities and Exchange Commission has launched an inquiry into how the private equity industry values its investments, how those investments are marketed, and other practices, the Wall Street Journal reported on Saturday.

Federal regulators sent letters to numerous private equity firms in December in an "informal inquiry" into the $1.2 trillion industry, which historically has not been a major focus of scrutiny by the SEC, the newspaper said.

It was unclear which firms received the SEC letter which "requested information related to 12 broad areas, including fund raising and fund formation," it said. READ MORE...

FDA says it monitored workers email to investigate potential leak

Ellen Nakashima and Lisa Rein — Fri, 10 Feb 2012 15:13:35 -0800

The Food and Drug Administration said Thursday that it monitored the personal e-mails of employees who had concerns about unsafe medical devices beginning in April 2010 but said it did so to investigate allegations that the employees had leaked confidential information to the public.

The FDA’s statement came in response to a Washington Post article last month that reported that the FDA intercepted and stored the Gmail communications of a group of agency doctors who raised concerns with Congress about the agency approving cancer-screening and other devices despite the doctors’ determinations that the devices were not safe or effective.

The statement comes as congressional inquiry into the e-mail surveillance has widened. In a letter Thursday to FDA Commissioner Margaret Hamburg, House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) warned that the FDA’s monitoring of personal communications between FDA doctors and congressional staff was “unlawful and will not be tolerated.”

The Post reported that the e-mail surveillance began as early as January 2009. Documents obtained by the FDA employees — all doctors and scientists who worked for the Office of Device Evaluation— showed contents of several e-mails from January 2009 between one scientist and a congressional aide.

Those e-mails were attached to a letter sent by an FDA official to another agency as evidence why the FDA could not allow the scientist to continue to work in its organization. “We simply cannot trust him,” the letter said. The e-mails were obtained from the Equal Employment Opportunity Commission, which had collected documents in an investigation of the employee’s complaint of retaliation. READ MORE...

Get WhistleBlower Security's Anonymous Hotline - Protect your company & your employees

Whistleblowing Under Dodd Frank

Gregory Kowalsky — Fri, 10 Feb 2012 15:30:04 -0800

The Dodd Frank act has provided Wall Street with a host of new regulations to comply with. One in particular that will have far reaching effects to every publicly traded corporation is section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (otherwise known as section 21f of the 1934 Securities Exchange Act).[1] It provides that the SEC may pay awards to those persons who come forward with information that leads to the successful prosecution by the SEC of an enforcement action, which yields monetary awards of over 1 million dollars.[2] Under the statute, “whistleblowers” who provide such information may be entitled to anywhere between 10% to 30% of the total award.[3] This provision of the Dodd Frank Act didn’t take effect until August 12, 2011, so its ramifications may not be yet fully understood.

The provision allows for any employee who provides information “related to a possible violation of the federal securities laws” to the SEC to be eligible for a monetary award.[4] On top of this, the employees are also protected from any negative retaliation that their employer might take in response to their ‘whistleblowing’.[5] There was already a whistleblower protection statute in place prior to this Dodd Frank provision (Section 806), but it was much narrower.[6] The Dodd Frank Act protects those who provide information that leads to any judicial, administrative or other related proceeding, not just those that are specifically related to shareholder protections.

This new statute is sure to have a strong effect on labor relations. Since the American economy, and now the global economy as well, has been extremely unstable since 2008, and because the world of finance in America is ruled by securities laws and enforcement agencies such as the SEC, the DOJ, and the State Attorneys’ offices, the average employee is much more apt to identify securities violations. Insider trading has become a household term.[7] Regulatory bodies like the SEC are constantly watching average day-to-day financial transactions. The point of all this being that this new law is not only topical and current, but it is extremely necessary for our economy to make forward progress. READ MORE...

To Envision DoddFranks Future Look to Its Predecessor

JESSE EISINGER, ProPublica — Fri, 10 Feb 2012 08:58:57 -0800

As fears mount that Dodd-Frank, the financial overhaul law, is about to be emasculated, it’s worth reflecting on the 10-year anniversary of a major regulatory success.

I’m speaking of the mocked, patronized and vilified Sarbanes-Oxley, the law that cleaned up American corporate accounting.

SOX, as it’s known, was a response to an epidemic in corporate accounting fraud that swept American business in the late 1990s and early 2000s. Because the 2008 financial crisis dwarfs that earlier round of scandal, it’s easy to forget how rotten things were, said Broc Romanek, editor of TheCorporateCounsel.net, a site devoted to securities law and corporate governance. “Everyone had lost faith in the numbers put out by big public companies,” he said.

Cast your mind back. The scandals erupted in some of what were supposed to be the best, most recognizable companies in America. Enron and WorldCom were the two biggest names and the two biggest failures. Tyco and Adelphia were in the second tier. But there were appalling accounting disgraces at HealthSouth, Rite Aid and Sunbeam. Waste Management and Xerox barely survived theirs.

Today, there are certainly debates about stocks and their valuations — and some questionable accounting — but no company that finds itself under scrutiny now is anywhere near as large, respected or celebrated as those were then. READ MORE...

US Plans to Sue Banks Over Bonds

JEAN EAGLESHAM, SUSAN PULLIAM and DAN FITZPATRICK — Thu, 09 Feb 2012 09:48:04 -0800

SEC to Warn Several Wall Street Firms of Impending Legal Action Stemming From Financial Crisis

Federal securities regulators plan to warn several major banks that they intend to sue them over mortgage-related actions linked to the financial crisis, according to people familiar with the matter.

The move would mark a stepped-up regulatory effort to hold Wall Street accountable for its sale of bonds linked to subprime mortgages in 2007 and 2008. At issue is whether the banks misrepresented the poor quality of loan pools they bundled and sold to investors, the people said.

It isn't clear which firms will receive the formal Securities and Exchange Commission enforcement warnings, known as "Wells notices."

Banks whose activities are being examined in the civil investigation include Ally Financial Inc., Bank of America Corp., Citigroup Inc., Deutsche Bank AG and Goldman Sachs Group Inc., people familiar with the matter say.

Representatives of the banks declined to comment, as did a spokesman for the SEC.

In a meeting with reporters last month, Robert Khuzami, the SEC's enforcement chief, said the agency's mortgage-bond investigation was looking for evidence that firms "failed to disclose important information when selling these securities."

Mr. Khuzami declined further comment on the investigation.

The planned regulatory actions come at a critical juncture. The SEC, Justice Department and state prosecutors are pushing to complete a number of financial-crisis cases by the end of this year, partly to avoid having enforcement action curbed by statutes of limitations, the people said.

Some politicians have pressed federal authorities to hold Wall Street firms more accountable for questionable activity during the crisis.

President Barack Obama last month set up a new financial-crimes unit to pursue mortgage-securities fraud during the financial crisis, involving federal and state prosecutors and the SEC. This week, the SEC hosted a training day for prosecutors and other members of the new unit, the people say. READ MORE...

Diamond Removes CEO CFO Amid Probe

EMILY GLAZER And NATHALIE TADENA — Wed, 08 Feb 2012 16:10:00 -0800

Diamond Foods Inc. removed its chief executive and chief financial officer, and said it would restate two years worth of financial results, after an internal probe found it had wrongly accounted for payments to walnut growers.

Shares plunged 37% to $23.21 in after hours trading.

The company said Michael J. Mendes, who held the titles of chairman, president and CEO, and CFO Steven M. Neil have been placed on administrative leave pending negotiations about their severance and board seats, a person familiar with the matter said.

The snack company named director and former Del Monte Foods CEO Rick Wolford to serve as the company's acting president and CEO. It appointed Michael Murphy, a managing director at Alix Partners, as the company's acting chief financial officer. The company said it is launching searches for permanent replacements for the CEO and CFO posts.

Robert J. Zollars, who previously served as lead independent director, was named chairman of the board.

The board's audit committee concluded a $20 million "continuity" payment made to walnut growers in August 2010 and a $60 million "momentum" payment made to growers in September 2011 were not accounted for in the correct periods. Diamond will restate its statements for fiscal years 2010 and 2011 and said it will file all required reports with the U.S. Securities and Exchange Commission as soon as possible. READ MORE...

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Brokers suspended in Libor inquiry

Caroline Binham, Brooke Masters and Megan Murphy in London — Wed, 08 Feb 2012 15:52:30 -0800

More than a dozen traders and brokers in London and Asia have been fired, suspended or put on leave by their employers as a multinational probe into alleged manipulation of crucial global lending rates accelerates.

Regulators have been investigating US and European banks that help set interbank lending rates in London and Tokyo since late 2010, in an intensive profile inquiry that spans three continents and involves at least nine separate enforcement agencies.

In the last few months, officials have also expanded their enquiries to both hedge funds that place big bets on movements in those rates, and the interdealer brokers that serve as go-betweens with the banks, according to people familiar with the probe.

Icap, the world’s largest inter-dealer broker, has suspended one employee and put two more on administrative leave in the past six weeks. Icap, based in London, declined to comment beyond noting that it was “co-operating fully” with authorities and had disclosed the official requests for information late last year.

According to people familiar with the probe, traders have also been suspended, fired or placed on leave in recent months at Deutsche Bank, JPMorgan Chase, Royal Bank of Scotland and Citigroup. All four banks declined to comment.

Regulators are seeking to determine whether banks colluded to set the overnight lending rates known as Libor, Tibor and Euribor, and whether traders within the banks and their clients improperly used information on what future rates would be to place profitable trades. The rates, which serve as a benchmark for $3.5tn worth of financial products worldwide, are set by a daily poll of a panel of banks in each region.

US and UK regulators have sought information from the three interdealer brokers that dominate the rates market – Icap, Tullett Prebon and RP Martin. People familiar with the matter said they were looking at information-sharing among brokers, hedge funds and banks.

An RP Martin spokesman said the firm was not under investigation and declined to comment on suspensions. A Tullett Prebon spokesman said the firm had not suspended any employees.

Earlier this week, UBS said it had been granted conditional immunity from the Swiss Competition Commission relating to its submissions for certain rates. The Swiss group was granted similar immunity by the US Department of Justice last year because it is co-operating with the probe.

“Derivative traders working for a number of financial institutions might have manipulated these submissions by co-ordinating their behaviour, thereby influencing these reference rates in their favour,” said a statement published by Switzerland’s Competition Commission last week. “Moreover, derivative traders might have colluded to manipulate the difference between the ask price and the bid price [spread] of derivatives based on these reference rates to the detriment of their clients.”

Barclays, which is already being investigated over alleged improper communications between traders and back office staff over its rates submissions, declined to comment on whether any employees have been suspended in London.

With additional reporting by Kara Scannell in New York, Michiyo Nakamoto in Tokyo, and Paul J. Davies in Hong Kong

READ MORE...

Top Stanford witness says he tried to conceal fraud

Anna Driver — Tue, 07 Feb 2012 16:03:49 -0800

(Reuters) - A former top aide to Texas financier Allen Stanford said on Tuesday he continued to hide financial misdeeds as Stanford's empire was crumbling in early 2009.

James Davis, Stanford's former chief financial officer, said he drew up a document in February of that year showing Stanford's bank had assets of $6.3 billion, far more than was the case. This was despite learning in January that U.S. regulators were about to swoop down on the bank, Davis said.

Davis, who has pleaded guilty to fraud in a plea bargain, was on his fourth day of testifying against his former boss.

Stanford is on trial in federal court in Houston accused of bilking investors in his Caribbean bank in a $7 billion Ponzi scheme. He has denied the charges.

In a cross-examination that has gone on for two days, Stanford's lawyer, Robert Scardino, painted Davis as a habitual liar.

"You just said to the jury that you are no longer a liar. You quit lying?" Scardino asked.

"Yes, sir," Davis answered.

Under Scardino's questions, Davis said he was the source of a pie chart that showed the bank's assets at $6.3 billion. The chart was shown to other Stanford executives at a meeting in Miami in February 2009.

"Yes, sir I did put the $6.3 billion," Davis told the jury. READ MORE...

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SEC weighs two money market fund proposals

Sarah N. Lynch — Tue, 07 Feb 2012 15:55:03 -0800

(Reuters) - The chairman of the Securities and Exchange Commission is eyeing two potential plans to bolster the stability of money market funds, but their fate remains uncertain due to internal disagreement at the SEC over the need for more regulations.

Last month, agency staff circulated early drafts for either a capital buffer or a floating fund valuation, both aimed at preventing runs on money market funds and investor losses in the $2.6 trillion industry, people familiar with the matter said.

Regulators began to focus on new rules for the money market fund industry after the Reserve Primary Fund "broke the buck" in 2008, at the height of the financial crisis, when its net asset value below the $1 mark.

In 2010, the SEC adopted a series of new rules in response to that event, including tightening credit quality standards, shortening the maturities of fund investments and imposing a new liquidity requirement.

The industry and several SEC commissioners have questioned whether any further changes are required.

One of the new plans, favored by some SEC staff and banking regulators, would consist of both a capital buffer requirement and a 30-day hold-back on redemption requests by investors.

Under that proposal, funds would need to maintain a 1 percent capital cushion and they would hold back 3 percent of investor funds for 30 days after a redemption request.

The alternative plan calls for a floating net asset value to help curb investor complacency over the stable $1-per-share value that funds currently quote.

The concepts were first discussed by SEC Chairman Mary Schapiro in a major speech to the brokerage industry last November.

The Wall Street Journal reported on Tuesday that the SEC would unveil the plans in the coming weeks.

SEC staff are hoping to put both plans out for public comment, but would anticipate only adopting one of the two proposals, people with knowledge of the matter told Reuters. The goal is to unveil them sometime in the spring. READ MORE...

OSC launches new insider trading probe

tim kiladze — Tue, 07 Feb 2012 14:27:12 -0800

The Ontario Securities Commission is investigating its second high-profile insider trading case in as many months, signalling to Bay Street that it is cracking down on enforcement.

The latest case involves a former employee at GMP Securities, a venerable Canadian investment bank, and mining giant Ian Telfer, chairman of Goldcorp Inc. (G-T47.580.310.66%) The allegations centre on Eda Marie Agueci, a former executive assistant at GMP, who the OSC alleges tipped off others about pending transactions for which her firm acted as an adviser. Dennis Wing, a founding partner of investment bank First Marathon Securities, is also named in the case.

Although the OSC noted that Mr. Telfer did not participate in the insider trading scheme, the commission alleges that he helped Ms. Agueci to hide some trading activity and thereby acted contrary to the public interest.

It is the second case this year in which the OSC has tied high-powered mining executives to insider trading. In January, the OSC accused Jowdat Waheed and Bruce Walter of illegal insider trading, alleging that they profited from inside information only they were privy to during the prolonged takeover battle for Baffinland Iron Mines Corp.

The OSC alleges that the illegal activites generated profits of about $962,000 and that Ms. Agueci received direct and indirect payments that amounted to $25,000 in relation to this trading. READ MORE...

Symmetry Medical execs settle SEC fraud charges

Reuters — Mon, 06 Feb 2012 11:08:03 -0800

(Reuters) - Symmetry Medical Inc and several former executives and accountants have settled Securities and Exchange Commission charges over a "pervasive" alleged accounting fraud at a British unit that distorted the medical device company's results.

The settlement also marks one of the few times the SEC has invoked the Sarbanes-Oxley governance law of 2002 to claw back sums paid to senior corporate executives while a fraud was going on but who did not know it was occurring.

Former Chief Executive Brian Moore agreed to reimburse $450,000 to Symmetry, while Chief Financial Officer Fred Hite agreed to reimburse $185,000. Hite also agreed to pay a $25,000 civil penalty.

Symmetry also agreed not to violate rules related to financial reporting, books and records and internal controls.

The SEC accused Symmetry's Thornton Precision Components unit of having systematically overstated assets and revenue and understated costs, starting before the parent's December 2004 initial public offering and ending in late September 2007.

It said Symmetry was ultimately forced to restate results, reducing reported income from 2004 through the first two quarters of 2007 by more than two-thirds to about $23 million from about $76 million.

The four other former Symmetry executives settled related SEC charges, and two former Ernst & Young LLP UK auditors accused of failing to properly audit Thornton agreed to two-year suspensions from appearing before the SEC.

"Symmetry shareholders were investing their money, and Symmetry and TPC executives were collecting their bonuses, based in part on inflated numbers," Stephen Cohen, associate director of the SEC enforcement unit, said in a statement.

Thomas Sullivan, who succeeded Moore as chief executive last January, in an interview said the company reported the irregularities to the SEC in 2007 immediately after discovering them, and is pleased to settle. He also said he looked forward to "many years" working with CFO Hite.

Russ Ryan, a lawyer for Moore, in a statement said Sarbanes-Oxley "automatically requires reimbursement of certain amounts even when the CEO is innocent of wrongdoing, and that is what Mr. Moore agreed to do here. He is glad to have put the matter behind him."

Symmetry is based in Warsaw, Indiana. Its products include orthopedic implants, surgical instruments and engine parts used in aerospace. Thornton is based in Sheffield, England.

Executives affiliated with home builder Beazer Homes USA Inc, auto parts retailer CSK Auto Inc and automated teller machine manufacturer Diebold Inc have also agreed to clawbacks in other SEC cases that invoked Sarbanes-Oxley.

The cases are SEC v. Senior et al, U.S. District Court, Northern District of Indiana, No. 12-00060; SEC v. Moore, U.S. District Court, Northern District of Indiana, No. 12-00061.; In re: Symmetry Medical Inc et al, SEC Administrative Proceeding No. 3-14723; In re: Kelly et al, SEC Administrative Proceeding No. 3-14724.

For the SEC: Stephen Cohen

For Symmetry: Erich Schwartz of Skadden Arps Slate Meagher & Flom

For Moore: Russell Ryan of King & Spalding

For Hite: Nancy Grunberg of Venable

(Reporting by Jonathan Stempel and Sarah N. Lynch)

A $17 Billion Fraud Born of Earnings Management and a Poor Ethical Culture

Sheila Keefe, CFE, CPA - ACFE Insights — Mon, 06 Feb 2012 15:13:03 -0800

The $1.7 billion Olympus fraud, discovered through whistleblowing of the outgoing CEO Michael Woodford, has sent shockwaves throughout the corporate governance world as many wonder if such a fraud could occur at other organizations. To consider this validity of this concern, let’s look at the accounting piece and the role of poor corporate culture that allowed this fraud to continue for 13 years.

The Numbers

The accounting piece of the Olympus fraud was facilitated by the now-outlawed practice of tobashi, in which organizations spread the recognition of losses over multiple periods rather than immediately. To state it simply, tobashi is a form of earnings management. Olympus executed its tobashi scheme by selling devalued investments to an ‘unrelated’ entity under common control at historical costs. In this way, no loss was recorded by Olympus on the sale of the investment. The losses were recorded eventually as impairment of goodwill. To do this, Olympus would buy the ‘unrelated’ entity that held the investments, with the price set at the lower market value and then add in significant goodwill to the acquisition such that the new subsidiary would be bought for an amount equivalent to the historical cost of the devalued investments. Olympus would then gradually write-down goodwill from the acquisition of the previously ‘unrelated’ entity as a permanent impairment. At the end of the tobashi scheme, the devalued investment would be restored to Olympus’ balance sheet at the lower market value, and the losses would be recorded through the income statement but not as investment income but rather as impairment of goodwill.

While the tobashi scheme that Olympus initiated is no longer legal, earnings management is still popular with companies interested in avoiding shocks to stock prices. As recently as 2009, General Electric was fined $50 million by the SEC for earnings management.

The Role of Olympus’s Poor Ethical Culture: READ MORE...

Fighting Fraud 5 Key Concerns

Tracy Kitten, — Fri, 03 Feb 2012 11:57:15 -0800

Alisdair Faulkner of ThreatMetrix says financial institutions and businesses should focus on five key security areas. What make up the top five, and where do banks need to make the greatest fraud-prevention investments?

Faulkner, a technology entrepreneur who oversees security products for ThreatMetrix, says e-commerce, enterprise-level security, the need for stronger authentication, cyberwarfare threats and malware's multichannel attacks are top risk-management and security focuses for banks and business.

But addressing those security concerns won't be easy. Fighting fraud requires a multichannel approach. For financial institutions, that means addressing attacks waged against accounts from emerging channels, like mobile, while continuously monitoring attacks aimed at more traditional channels, such as online.

It also means protecting commercial and retail customers, which typically pose the greatest security vulnerabilities.

"You have to address fraud across multiple channels," Faulkner says. "What all financial institutions that look at customers' deposits find is that they need to integrate secure browsing technology. An attack does not have to come from one channel, and financial institutions not only have to protect themselves, but also those in their chain that are targeted."

Integrated, cross-channel fraud detection is critical, especially as banks and credit unions work to meet increasing regulatory demands, such as those outlined in the Federal Financial Institutions Examination Council's Authentication Guidance. READ MORE...

What Is Sarbanes Oxley

Financial Management — Fri, 03 Feb 2012 15:49:37 -0800

When the Enron and MCI scandals broke, it became clear to the US government as well as everyone else that something needed to be done to prevent financial abuses from harming the public. A bipartisan team of legislators led by Senator Paul Sarbanes and Representative Michael G. Oxley put together the Sarbanes Oxley Act, also titled the Public Company Accounting Reform and Investor Protection Act of 2002, and more manageably called SOX for short. It was overwhelmingly passed by the House of Representatives, and the Senate voted unanimously to pass the Sarbanes Oxley bill.

The Sarbanes Oxley Act was signed into federal law on July 30, 2002. Its primary purpose is to protect investors by making corporate information released about accounting and finance more accurate and reliable. It addresses issues like the establishment of a public company, creation of an accounting oversight board, auditor independence, corporate responsibility, and enhanced financial disclosure.

According to President Bush, Sarbanes Oxley includes ‘the most far-reaching reforms of American business practices since the time of Franklin Delano Roosevelt.’

That may be true, but it’s also one of the most complex and difficult to understand reforms ever passed. It covers topics such as:

Personal loans by the company to executive officers or directors

Financial report certification

More timely insider trading reporting

Strong limitations on insider trades

Public reporting of top executive real compensation and company profits
Auditing independence

Personal accountability by the chief officers of the company, backed up by criminal and civil penalties including serious jail time and financial penalties on individuals who misstate financial statements and commit securities violations

You can see how a bill covering so many different topics might be seen as discouragingly complex

Understanding Sarbanes Oxley

There are a few things you can do to learn how Sarbanes Oxley works. First, read reviews and synopses of the Sarbanes Oxley Act on the SEC website; they give an excellent overview of what the law is about. Second, you can get training focused in several different ways on the part of Sarbanes Oxley you need to understand.

The main thing to understand about Sarbanes Oxley, though, is that it primarily affects how you do your accounting, and thus how you run your IT services. Electronic controls must properly manage your financial information, so that you have clear, easy-to-access real-time information on your company’s finances. Corporate finances must be kept separate from executive finances, payroll, and other moneys. Auditing for accountability is crucial, so that if errors or misinformation enter the data stream you will be able to determine the source.

With Sarbanes Oxley, even if you were ignorant of what was going on in your accounting, if you are a major executive you will be both civilly and criminally liable for any errors released to the public, or the failure to release certain information in a timely manner. You must learn about Sarbanes Oxley, not just to comply with more government regulations, but to protect your personal life. READ MORE...

SEC Appoints GAOs Jeanette Franzel to PCAOB

Michael Cohn, Accounting Today — Fri, 03 Feb 2012 15:37:00 -0800

The Securities and Exchange Commission has named Jeanette M. Franzel, a managing director of the Government Accountability Office, as a member of the Public Company Accounting Oversight Board.

She will be replacing Daniel L. Goelzer, one of the founding members of the PCAOB, who has served two consecutive five-year terms with the PCAOB since the board was founded in 2002.

The Sarbanes-Oxley Act of 2002 created the PCAOB to provide independent oversight of audits of public companies and broker-dealers. The board is responsible for setting audit standards and for registering, inspecting, and disciplining public accounting firms. The SEC oversees the PCAOB and appoints its members.

Franzel currently leads all aspects of the GAO’s financial audit oversight of the federal government. She heads a team of approximately 250 staff that focuses on financial and performance audits, proper use of federal funds, internal control, financial systems, and federal audit and financial management policy. She is a CPA, Certified Internal Auditor, Certified Management Accountant, and Certified Government Financial Manager.

“Jeanette’s commitment to the public trust and America’s investors is demonstrated by her life-long public service and her constant dedication to increasing accountability, audit quality and audit standards,” said SEC chair Mary L. Schapiro in a statement. “She has extensive hands-on experience leading financial audits and deep expertise in audit quality control, which will serve the PCAOB well as it continues to execute a rigorous standard-setting, inspections, and enforcement agenda.”

“We look forward to working with Jeanette on the PCAOB’s important statutory mission of overseeing the auditors of public companies and SEC-registered broker-dealers,” said SEC chief accountant James L. Kroeker. “Her qualifications as a nationally and internationally recognized expert in auditing standards will benefit the PCAOB as it works to protect the interests of investors and strengthen audit quality.” READ MORE...

SEC advisory panel concerned about crowdfunding

By Sarah N. Lynch — Thu, 02 Feb 2012 11:43:14 -0800

(Reuters) - An advisory committee urged U.S. securities regulators on Wednesday to relax outdated rules that trigger public financial reporting for companies, but it stopped short of backing a new capital-raising strategy known as "crowdfunding."

In a public meeting, members of the Advisory Committee on Small and Emerging Companies voted on two proposed regulatory changes for the Securities and Exchange Commission to consider that would help private companies raise capital.

However, they raised concerns with crowdfunding, a new capital-raising strategy that lets investors take small stakes in private start-ups over the Internet, even though the idea has received some support from President Barack Obama and Congress.

The panel said it needed more time to study the issue to ensure it does not lead to investment scams.

"This is just an opportunity for fraud in the extreme," said committee co-chair Stephen Graham, who advises on securities offerings as co-chair of Fenwick & West's Life Sciences Practice.

"You can just imagine the unsophisticated investor that is just bombarded on the Internet." READ MORE...

Internal Control Manager FINCA Russia

FINCA International Inc. — Tue, 31 Jan 2012 15:37:12 -0800

Description
FINCA International, one of the world's leading microfinance institutions, provides financial services to more than 750,000 clients through 21 wholly-owned and operated subsidiaries in Africa, Eurasia, Latin America and the Greater Middle East. FINCA International is currently looking for an Internal Control Manager, Russia, to be based in Samara. The Internal Control Manager will manage a team of professionals; partner with regional and Company level management, and, serve as a member of FINCA team, and will report to the Chief Executive Officer (functional and administrative), and to the Regional Internal Control Manager (functional and technical). In conjunction with FINCA Eurasia Internal Control Manager, the Internal Control Manager will assist company’s management in creation and maintaining of internal control environment that supports the Company in pursuing its mission with a minimum of risk and a maximum of efficiency. The Internal Control Manager will assist company’s management in improving the overall performance and activities of the Company and in making decisions on the issues of risk identification and analysis. Working with the framework of FINCA regulation and in coordination with corporate functional heads, the Internal Control Manager will manage and monitor control activities and recommend corrective actions.

Ideal profile:
- University Degree in Business, Finance, Economics, Management or equivalent education.
- Minimum 2 years of experience in best-practice internal control management such as internal audit, independent audit, compliance, risk management.
- Minimum 1 year experience in a supervisory role.
- Outstanding interpersonal, communication and training skills.
- Strong business management and negotiating skills.
- Excellent technical report writing skills and computer literacy.
- Strong analytical and organizational skills.
- Fluency in Russian and English.

FINCA International Inc. is an Equal Opportunity Employer.

APPLY or VISIT the full vacancy description

Two Credit Suisse ExEmployees Plead Guilty in Bond Probe

CHAD BRAY, MICHAEL ROTHFELD and JENNY STRASBURG — Wed, 01 Feb 2012 11:17:59 -0800

NEW YORK—Two former Credit Suisse Group AG employees pleaded guilty Wednesday to criminal charges over alleged misstatements regarding the bank's mortgage-bond valuations during the financial crisis.

David Higgs, a U.K. citizen, pleaded guilty to conspiracy to falsify books and records and to commit wire fraud at a hearing before U.S. District Judge Alison J. Nathan in Manhattan federal court on Wednesday. Mr. Higgs, who is cooperating with prosecutors, faces up to five years in prison on the charge.

About an hour later at a separate hearing in the downtown Manhattan federal courthouse, Salmaan Siddiqui, a former Credit Suisse trader who reported to Mr. Higgs, pleaded guilty to conspiracy to falsify books and records. Mr. Siddiqui also is cooperating in the investigation.

The long-running investigation is expected to result in charges against fewer than half a dozen former Credit Suisse traders, according to people familiar with the matter.

The Manhattan U.S. Attorney's office is planning to allege in a criminal complaint as early as today that several former traders at the global investment bank misled its investors by booking inflated prices of mortgage bonds to boost their bonuses, despite knowing the values of those securities had dropped, The Wall Street Journal reported Tuesday night, citing people familiar with the matter.

The Securities and Exchange Commission is planning to file related civil charges, the people said.

Credit Suisse itself won't be charged in the case, the people said. A spokeswoman for Credit Suisse declined to comment Wednesday. READ MORE...

Money From MF Global Feared Gone

SCOTT PATTERSON and AARON LUCCHETTI — Mon, 30 Jan 2012 15:35:41 -0800

Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation.

Many officials now believe certain employees at MF Global dipped into the "customer segregated account" that the New York company was supposed to keep separate from its own assets—and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

Investigators also are examining other scenarios that have gained traction in recent weeks, such as the possibility that MF Global suffered steep losses on investments made using customer money. Officials investigating the case have looked into whether such investments were appropriate under rules at the time. READ MORE...

In Stanford Fraud Case Longtime Friends Become Courtroom Enemies

CLIFFORD KRAUSS — Mon, 30 Jan 2012 15:00:12 -0800

HOUSTON — R. Allen Stanford and James M. Davis were roommates at Baylor University and trusted friends over three decades who together built an international financial empire. But this week they are scheduled to confront each other in federal court as indicted swindlers ready to cross swords.

Mr. Davis, who was the chief financial officer of the Stanford Financial Group before it collapsed three years ago, is now the chief prosecution witness against Mr. Stanford. He will testify that he witnessed and participated in a $7 billion Ponzi scheme set in motion and directed by Mr. Stanford from a bank on the island of Antigua.

“It’s very similar to an organized crime or Mafia case,” said Adam Gershowitz, a professor of criminal law at the University of Houston, “where you have friends who go back years and have worked together for years and one turns on the other to save his own skin.”

Mr. Stanford’s lawyers have already told the jury that Mr. Davis’s story is a lie. They are certain to cross-examine him hard on his contention that all of the illegal things he has already confessed to — cooking the books for an empire that included offshore banking, two airlines, Caribbean real estate and even a cricket team — were all at the instruction of Mr. Stanford. The case could well come down to who the jury decides was really the mastermind of what prosecutors described as an international crime that defrauded nearly 30,000 investors from 113 countries over more than 20 years and corrupted the highest levels of the government of Antigua. READ MORE...

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From the Experts Preparing for Whistleblowers Under DoddFrank

Matt Morley and Carol Elder Bruce — Fri, 27 Jan 2012 16:20:53 -0800

Dodd-Frank’s Whistleblower Provisions

The Dodd-Frank whistleblower provisions, codified as Section 21F of the Exchange Act, require the SEC to pay bounties to persons who provide information leading to a successful securities law enforcement action, in which more than $1 million is recovered. Bounties will range from ten to 30 percent of the total monetary sanctions obtained by authorities, with the precise amount to be determined unilaterally by the SEC.

Whistleblowers are not required to inform the company of their concerns at any time, and almost anyone can be a whistleblower, including current or former employees, spouses, consultants, or competitors. Whistleblowers can submit tips anonymously by acting through counsel, and their identity may never be publicly known. Even persons bound by fiduciary duties or ethical obligations can, under certain circumstances, become eligible to receive a bounty for reporting to the SEC.

For example, compliance and internal audit personnel are ordinarily ineligible for bounties, but may qualify if they have a reasonable basis to believe that disclosure may be necessary to prevent substantial injury to the company or its investors, or if the company fails to report a violation to the SEC within 120 days after learning of it. Whistleblowers can even qualify for an award if they obtained their information in breach of civil or criminal law, unless they are convicted of a criminal violation in connection with obtaining the information.

SEC investigations arising out of whistleblower tips may prove more difficult to handle than staff-initiated inquiries, given the potentially active involvement of a financially motivated whistleblower who may push the SEC to undertake investigative steps that it might not otherwise pursue. Indeed, it seems likely that SEC investigations arising from whistleblower complaints will receive a disproportionate amount of staff attention and resources, given the importance of the program and the staff’s sensitivity about previous failures to heed whistleblowers. These factors may also make such investigations, once initiated, more difficult for the staff to close. READ MORE...

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Obama announces a Wall Street crackdown

SOX First — Mon, 30 Jan 2012 12:00:52 -0800

In his State of the Union address, Obama has announced a task force to go after the fraud that caused the financial crisis.

"We will…establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people's investments. Some financial firms violate major anti-fraud laws because there's no real penalty for being a repeat offender. That's bad for consumers, and it's bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count. And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans."

The lack of prosecution of the bankers and financial engineers who caused the financial crisis is one of the great public frustrations with this administration. A New York Times analysis , nearly all of the biggest financial companies – Citigroup, Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America to name a few – have settled fraud cases by promising the SEC that they would never again violate an antifraud law, only to do it again in another case a few years later. In other words, they weren't prosecuted because they made a promise, and then they broke the promise.

We don't know where this will go. As The Wall Street Journal says, it's an unashamedly populist speech in an election year. Who know? Maybe, we'll see some big banks getting prosecuted in the lead up to the election. For Obama, it might be a winner. READ MORE...

Phillips & Cohen Says Appointment of Director for CFTC Whistleblower Office Gives Program a Jumpstart

PRNewswire via COMTEX - SOURCE Phillips & Cohen LLP — Fri, 27 Jan 2012 16:13:18 -0800

WASHINGTON, Jan. 27, 2012 /PRNewswire via COMTEX/ -- With the recent appointment of a director for the new Commodity Futures Trading Commission (CFTC) Whistleblower Office, the CFTC has shown it is ready to move forward with its new whistleblower program, says whistleblower law firm Phillips & Cohen LLP.

The CFTC announced earlier this month that it hired Vincente Martinez as the first director of the CFTC's Whistleblower Office. Prior to coming to the CFTC, Martinez was Assistant Director in the Securities and Exchange Commission's Division of Enforcement.

"The CFTC has long made clear from its statements and actions that it welcomes whistleblowers who know of misconduct in the commodity markets," said Erika A. Kelton, a Washington, DC, attorney with Phillips & Cohen. "With the appointment of Mr. Martinez, the CFTC has chosen someone with experience in enforcement who can jumpstart the program." READ MORE...

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Doctors must not sign antiwhistle blowing contracts

Claire Churchard - People Management — Fri, 27 Jan 2012 15:30:09 -0800

More to be done to protect patients, says NHS Employers

Doctors must not sign work contracts that include ‘gagging clauses’ preventing them from raising concerns about poor quality care, according to new guidance from the General Medical Council (GMC).

The doctors’ regulator called such clauses “totally unacceptable” and said that doctors complying with them are breaking professional obligations and risking patient welfare, and their own careers.

This move throws additional weight behind efforts to encourage healthcare staff to speak out about unacceptable standards of care as staff fear reprisals and even the sack.

Niall Dickson, GMC chief executive, said: “Being a good doctor involves more than simply being a good clinician. It means being committed to improving the quality of services and being willing to speak up when things are not right – that is not always easy but it is at the heart of medical professionalism.

“Our new guidance also makes clear that doctors must not sign contracts that attempt to prevent them from raising concerns with professional regulators such as the GMC and systems regulators, such as the CQC. Nor must doctors in management roles promote such contracts or encourage other doctors to sign them. Those who promote or sign such agreements are breaking their professional obligations and putting their careers at risk.”

Commenting on the new guidance Dean Royles, director of NHS Employers, said that the right to raise concerns is “underwritten in NHS terms and conditions of employment” making it a professional duty to report problems because it is crucial to patient safety.

"The NHS has worked hard to create a culture that encourages staff to report misconduct, malpractice or wrong-doing that might affect patient safety, without fear of victimisation. Anonymous NHS staff surveys show that most staff know how to report concerns and feel confident to do so,” Royles said. READ MORE...

Cabinet to discuss protection for whistleblowers

The Journal — Mon, 30 Jan 2012 11:51:11 -0800

THE CABINET IS set to discuss whistleblower legislation at a meeting tomorrow morning.

The issue, which has been raised in recent weeks following the dismissal of a whistleblower working in St Brendan’s Hospital at Grangegorman, is contained within the Programme for Government.

Fine Gael TD for Dublin Mid-West Derek Keating welcomed the move.

“If advocates like Louise Bayliss are to continue to unveil wrong-doings as they see them, they need to know that they will be protected by the State,” he said.

“Louise’s treatment at the hands of her employer has led her to believe that there are many other people who are being treated badly or threatened by middle management in an attempt to cover up low standards, wrong-doings to service users or bad management practices”.

The Programme for Government contains a plan for a Whistleblowers Act which would protect public servants who expose serious issues in their jobs.

There was controversy last year when the HSE took over a Dublin nursing home after allegations that residents may have been subjected to physical and verbal abuse.

Kathleen Lynch, the Minister for State with responsibility for Older People, said at the time that she was horrified that whistleblowers had been afraid to be interviewed by the health services watchdog. READ MORE...

Subpoenas issued to financial firms in expanded probe

Aruna Viswanatha and James Vicini — Mon, 30 Jan 2012 09:07:41 -0800

(Reuters) - The Justice Department issued civil subpoenas to 11 financial institutions as part of a new effort to investigate misconduct in the packaging and sale of home loans to investors, Attorney General Eric Holder said on Friday.

Holder declined to provide specifics, including the names of the firms.

"We are wasting no time in aggressively pursuing any and all leads," Holder said at a news conference announcing details of a new working group to investigate misconduct in the residential mortgage-backed securities (RMBS) market, "you can expect more to follow."

President Barack Obama said he directed Holder to create the new unit in his State of the Union speech late Tuesday, saying it was needed to "help turn the page on an era of recklessness."

On Friday a slew of federal and state officials appeared at the news conference to provide details about the new group.

Housed within an earlier financial fraud task force that Obama created in 2009, it is expected to be staffed with around 50 attorneys, analysts and agents, officials said.

Some skeptics have questioned whether the new group is largely a political move because the other fraud task force already exists.

Also, the Obama administration has received heat from left-leaning activist groups that believe a separate effort to investigate misconduct in processing foreclosures and servicing home loans may not be rigorous enough to extract a meaningful settlement.

In exchange for providing up to $25 billion in housing relief, much in the form of cutting mortgage debt for distressed borrowers, the top U.S. banks are expected to put behind them government lawsuits about lending and servicing abuses - but not securitization claims.

The banks involved in the discussions include Bank of America, Wells Fargo & Co, JPMorgan Chase & Co, Citigroup and Ally Financial Inc. READ MORE...

2011 Sees Focus on Whistleblowing and DoddFrank Claims

Chris W. Haaf and Monica C. Platt — Thu, 26 Jan 2012 15:33:16 -0800

In 2011, courts addressed a variety of securities law claims arising from the newly enacted Dodd-Frank Act. Signed into law in July 2010, passage of the Dodd-Frank Act was spurred in part by the Bernard Madoff Ponzi scheme in addition to other smaller-scale fraudulent schemes. It contains whistleblower provisions meant to both encourage reporting and expand protection from retaliation for informants. Dodd-Frank also expanded the Securities and Exchange Commission's (SEC) ability to bring aiding and abetting claims by allowing them to be brought under the Securities Act of 1933 and the Investment Company Act of 1940 in addition to the two other statutes under which they could already be brought. Many 2011 cases focused on the interpretation and the applicability of the whistleblower provisions (which included a fresh look at Sarbanes-Oxley's whistleblower provisions), but one court also considered the act's retroactivity in the area of aiding and abetting. The cases show that while Dodd-Frank may have expanded protections for informants, Sarbanes-Oxley is still very much in play. Both will likely continue to be major themes of 2012.

Whistleblowing Claims under Dodd-Frank and Sarbanes-Oxley

In 2011, a number of courts explored the intersection of the whistleblower provisions of the Sarbanes-Oxley Act and the whistleblower and bounty provisions of the new Dodd-Frank Act. In the wake of the Enron accounting scandal, Congress enacted Sarbanes-Oxley in 2002 in part as a response to a culture that discouraged employees from reporting fraudulent behavior, whether internally or to federal authorities. Under Sarbanes-Oxley, individuals successfully claiming whistleblower protection may be entitled to reinstatement, back pay, and special damages, including attorney's fees and costs. Sarbanes-Oxley's whistleblower provisions protect individuals from adverse employment action in retaliation for providing information on activity that is in violation of securities laws in addition to other federal laws relating to fraud against shareholders. Only a handful of the more than 1,400 retaliation complaints that have been lodged under Sarbanes-Oxley since its passage have been successful.

Dodd-Frank contains its own whistleblower provisions, including a bounty provision to encourage reporting. Prior to Dodd-Frank, the SEC's whistleblower provisions were limited to insider trading, with awards capped at 10 percent of penalties. Now, under Dodd-Frank, whistleblowers seeking a bounty stand to gain 10 to 30 percent of the money collected in sanctions in a successful action. Additionally, Dodd-Frank's provisions apply to individuals providing information to the SEC relating to any violation of securities laws. Similar to Sarbanes-Oxley, Dodd-Frank also has a retaliation provision, protecting informants against adverse employment action for providing information to the SEC; initiating, testifying in, or assisting in investigations or judicial or administrative actions; or making disclosures required or protected under various other federal laws and regulations. The remedies available under Dodd-Frank's whistleblower provisions are reinstatement, back pay with interest, and litigation costs. READ MORE...

Get WhistleBlower Security's Anonymous Hotline - Protect your company & your employees

SinoForest keeping OSC in dark about committees probe report

The Canadian Press — Fri, 27 Jan 2012 13:42:47 -0800

VANCOUVER — Sino-Forest Corp. has failed to respond to information requests by the Ontario Securities Commission, according to a Globe and Mail report.

It cites a senior OSC investigator as saying the timber company has not yet provided information about its assets and relationships with key business partners in China.

Wayne Vanderlaan said in a sworn affidavit that Sino-Forest has not replied to requests made Dec. 7, 2011 regarding claims that the company’s “cash balances, timber assets, book values and revenues” were “verified” by an independent committee of directors.

Vanderlaan told the Globe that the OSC letter asked the independent committee “a number of questions” about Sino-Forest’s statement that the committee’s review verified these assets, but the OSC has not received specific responses. READ MORE...

Committee Considers Enhancing Whistleblower Protections

Article provided by The Whistleblower Law Firm — Fri, 27 Jan 2012 10:44:44 -0800

Committee Considers Enhancing Whistleblower Protections

A committee hearing was held recently in conjunction with debate over a new bill that would solidify and even expand whistleblower protections for employees of government contractors.

January 27, 2012 /24-7PressRelease/ -- Recently, a bipartisan subcommittee of the Senate Homeland Security and Governmental Affairs Committee heard compelling testimony from an employee of a government contractor who was removed from a government project for voicing concerns over safety. The hearing was held in conjunction with debate over a new bill that would solidify and even expand whistleblower protections for employees of government contractors.

Whistleblower Testifies About Violations, Retaliation

The employee answered questions regarding his work on the Hanford Nuclear site in Richland, Washington, where he led an oversight project for the safe and permanent storage of radioactive waste. While committed to the project, he made clear his concerns regarding a number of cost overruns and violations of law and professional standards committed by the Bechtel Corporation in the construction of a plant to stabilize and safely dispose of hazardous nuclear waste.

As a result of speaking out, he contends that he was removed from his position with the project and relegated to a basement copy room as a warning to other would-be whistleblowers. The employee has since filed a whistleblower lawsuit under the False Claims Act against his employer and the Department of Energy, which is the agency overseeing the project.

Members of the senate committee asked pointed questions of the employee to emphasize the dilemma faced by those who question the practices of an employer. One member of the committee commented that approximately a half a trillion dollars is paid to contractors performing work for the government, and whistleblowers are vital to ensure that work is being performed competently and correctly. READ MORE...

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SEC pushes back in Koss case

Rich Kirchen - Senior Reporter - The Business Journal — Wed, 25 Jan 2012 15:21:35 -0800

The U.S. Securities and Exchange Commission has pushed back against a federal judge who questioned the adequacy of a settlement between the regulator, Koss Corp. and the company’s CEO Michael Koss.

The SEC, in a Wednesday filing, defended the agreement as “fair reasonable, adequate, and in the public interest.”

The SEC was responding to a December 2011 directive from U.S. District Court Judge Rudolph Randa that he needed more information from the SEC demonstrating the effectiveness of the agreements before he could approve them.

The SEC filed both a civil complaint and a settlement document in October 2011 on allegations the company and Michael Koss violated the Securities Exchange Act during former executive Sujata “Sue” Sachdeva’s embezzlement. [READ MORE...]

Insurance Fraud Marketforce and the IEAs 3rd Annual Conference

Marketforce — Wed, 25 Jan 2012 10:45:41 -0800

27th March 2012, One Whitehall Place, London

Conference overview:

Building on the success of our long-running The Future of General Insurance and Claims Forum events, Marketforce and the IEA are delighted to bring you the Insurance Fraud Forum.

At a time when margins are being squeezed and fraud is on the increase due to the economic environment, claims fraud is rising up the agenda. This dedicated one day conference will provide in-depth insights into advance fraud prevention and detection strategies, and presents an opportunity for the industry to share best practice and work together to combat fraud.

Why should you attend Insurance Fraud in 2012?

Learn about the psychology of fraud, how to use this to understand fraudsters and creating an effective deterrent
Hear from the City of London Police and the Insurance Fraud Bureau for updates on the latest industry collaboration
Discuss best practice and innovations in detection and prevention with leaders in the field
Take away valuable insights on where best to target future investment

Preventing Healthcare Fraud and Abuse in Professional Practices

The Identity Advocate — Tue, 24 Jan 2012 15:41:20 -0800

Preventing healthcare fraud and abuse continues to be a huge challenge for healthcare organizations. From smaller healthcare practices to giant corporations, it appears no one is immune to the threat of healthcare data breaches.

According to federal health officials, almost 300 doctors, hospitals, and insurance companies have reported medical data breaches in the past two years. US government data suggests nearly eight million people have had their medical records improperly exposed during this period. This exposure makes it easy for hackers and thieves to steal personal information, and further puts a spotlight on the need for impenetrable systems to prevent healthcare data breaches.

Professional practices are often unprepared and therefore completely vulnerable to attack. Large organizations have security systems in place, but their size often leads to the inability to control those systems and the people operating them—not to mention the fact that the amount of personal data in their systems makes them the “big fish” in the ongoing game of preventing healthcare fraud and abuse. READ MORE...

ExCIA Officer Charged in Information Leak

CHARLIE SAVAGE — Tue, 24 Jan 2012 14:22:44 -0800

WASHINGTON — The Justice Department on Monday charged a former Central Intelligence Agency officer with disclosing classified information to journalists about the capture and brutal interrogation of a suspected member of Al Qaeda, Abu Zubaydah — adding another chapter to the Obama administration’s crackdown on leaks.

In a criminal complaint filed on Monday, the Federal Bureau of Investigation accused John Kiriakou, the former C.I.A. officer, of disclosing the identity of a C.I.A. analyst who worked on a 2002 operation that located and interrogated Abu Zubaydah. The journalists included a New York Times reporter, it alleged.

“Safeguarding classified information, including the identities of C.I.A. officers involved in sensitive operations, is critical to keeping our intelligence officers safe and protecting our national security,” said Attorney General Eric H. Holder Jr., in a statement.

At the same time, the department on Monday cleared of wrongdoing a legal defense team for inmates at Guantánamo Bay, Cuba, for its efforts to identify officials involved in the coercive interrogations of “high value” suspects. The effort was a project by the American Civil Liberties Union and the National Association of Criminal Defense Lawyers to bolster the representation of detainees facing death sentences in military commissions.

Mr. Kiriakou, who was released on a $250,000 bond after appearing in federal court in Alexandria, Va., on Monday, was a leader of the team that captured Abu Zubaydah, and he came to public attention in late 2007 when he gave an interview to ABC News portraying the suffocation technique called waterboarding as torture, but calling it necessary. (It later emerged that he significantly understated the C.I.A.’s use of the technique.) His lawyer did not return a call for comment on Monday.

The prosecution of Mr. Kiriakou is the sixth criminal case brought under President Obama against current or former government officials accused of providing classified information to the media, more such cases than all previous presidents combined. The crackdown, long sought by the C.I.A. and other agencies, has won the administration some credit with security officials angered by the president’s earlier decision to release classified legal opinions on the agency’s interrogation program.

Officials have said the administration’s campaign against leaks has resulted from a belief among the intelligence agencies and members of both parties in Congress that unauthorized disclosures by government employees holding security clearances were out of control. But Mr. Obama entered office pledging unprecedented transparency for government operations, and his record has drawn fire from civil libertarians and groups supporting whistle-blowers and press freedoms.

Among other things, the F.B.I. complaint accuses Mr. Kiriakou of being a source for a June 2008 front-page Times article, written by reporter Scott Shane. It identified a C.I.A. employee, Deuce Martinez, who played a major role interrogation of Abu Zubaydah, believed to have handled logistics for Al Qaeda, and Khalid Shaikh Mohammed, the self-described mastermind of the Sept. 11 attacks.

Robert Christie, a spokesman for The Times, declined to comment.

The case is the second against a former C.I.A. officer for allegedly disclosing classified information to reporters within the past year. In 2011, Jeffrey Sterling, a former agency employee, was charged with leaking information allegedly used by James Risen, a Times reporter, in his 2006 book, “State of War.” (That case may be collapsing due to a judge’s ruling barring two witnesses from testifying; the prosecution has appealed.)

In a statement on Monday warning C.I.A. employees not to leak information, the C.I.A. director, David H. Petraeus, took note of both cases, saying that the agency “fully supported the investigation from the beginning and will continue to do so.”

The agency had initially pressed for an investigation of the Guantánamo detainee lawyers — not of its own former employee. The inquiry traces back to the spring of 2009, after government officials learned that Guantánamo defense lawyers were trying to identify C.I.A. interrogators — including the discovery of 32 pages of photographs in the cells of several Guantánamo detainees. The photos were a line-up of random people and suspected interrogators; the attorneys were trying to identify potential witnesses who could testify about abusive treatment, as mitigating evidence against death sentences.

That discovery led to an uproar within the C.I.A., where critics feared the move could put officials involved in the interrogation program at risk. The agency pressed for a criminal investigation, and Mr. Holder eventually appointed Patrick J. Fitzgerald, a United States attorney who led a high-profile C.I.A. leak investigation during the Bush administration, to handle it.

The investigation, in turn, led to Mr. Kiriakou. Citing e-mails, the complaint said he had disclosed the name of a different C.I.A. officer involved in the Zubaydah operation to another journalist, who in turn had supplied it to the a defense team investigator; it ended up in a classified court filing by defense attorneys in January 2009. (The investigator did not photograph the officer because his identity was covert, the complaint said, and no one has published his name.)

The F.B.I. also discovered other messages that it claimed showed Mr. Kiriakou was a source for The New York Times article about the interrogator. While his identity was not covert, The Times was criticized for publishing his name — including by Mr. Kiriakou.

Investigators, the complaint said, also found e-mails in which Mr. Kiriakou allegedly bragged to the co-author of his 2010 memoir, “The Reluctant Spy,” about misleading a C.I.A. review board about a classified technique for tracking cellphones, used in hunting Abu Zubaydah, so that they would not censor it. A reference to such a device also appeared in The Times article.

But, F.B.I. agent Joseph Capitano wrote in court documents, investigators cleared the defense team representing the detainees: “No law or military commission order expressly prohibited defense counsel from providing their clients with the photographic spreads in question under these circumstances.”

Anthony Romero, the executive director of the A.C.L.U., said the organization was “relieved” but criticized the opening of the investigation, saying it — and the Obama-era leak investigations more broadly — had had a “chilling effect on defense counsel, government whistle-blowers, and journalists.” READ MORE...

A version of this article appeared in print on January 24, 2012, on page A1 of the New York edition with the headline: Ex-C.I.A. Officer Charged in Information Leak.

READ MORE...

Two Insurers Sued Over Unclaimed Policies

LESLIE SCISM — Tue, 24 Jan 2012 14:38:29 -0800

A whistleblower lawsuit alleges MetLife Inc. and Prudential Financial Inc. avoided handing over unclaimed life-insurance policies to Illinois's abandoned-property department, and seeks more than $1 billion in damages on behalf of the state.

The lawsuit, filed in January 2011 and unsealed by a Cook County, Ill., state-court judge last week, underlines how litigation stemming from unclaimed policies may continue to dog the life-insurance industry even as some major companies move to settle state-government probes into possible violations.

The plaintiff, Total Asset Recovery Services LLC of Auburn Hills, Mich., is an investigative firm that specializes in unclaimed-property searches. The firm alleges that it used public records and detective work to conclude that, from 1988 to 2010, MetLife and Prudential failed to transfer to Illinois a total of 4,766 policies worth an estimated $524.3 million that they "knew or should have known" were overdue for transferring as abandoned property.

The lawsuit alleges the insurers committed "massive fraud" in not transferring the policies. READ MORE or subscribe to the Wall Street Journal

MetLife said the lawsuit vastly overstates the dollar amount of policies in question; Prudential declined to comment. Both companies have said they obey state unclaimed-property laws and go beyond contractual requirements in their policies, which specify that beneficiaries file claims for death benefits. They have said they are cooperating with the regulatory probes.

Many states are looking at whether insurers have violated laws by using a Social Security death database to cut off retirement-income checks while failing to use it to determine if death benefits should be paid to dead policyholders' survivors or turned over to states as abandoned property. Industry executives maintain that fewer than 1% of policies have gone unpaid.

Under whistleblower laws, a government entity can join a civil suit to help prove its allegations. But Tom Prescott, one of Total Asset's owners, said in an email that the Illinois Attorney General's office has told the firm's attorney it wants to join the suit to settle with the insurers.

A spokeswoman for the Illinois Attorney General's office declined to comment.

In the lawsuit, Total Asset seeks 15% to 25% of any proceeds that result if the attorney general intervenes, and 25% to 30% if the state doesn't intervene and it pursues the case on its own.

The plaintiff assumed as part of the lawsuit that each policy is worth $110,000, which is the size of the average life policy in Illinois, according to the American Council of Life Insurers.

The MetLife spokesman said the lawsuit's methods for calculating potential damages are wrong, because many of the policies at issue in Total Asset's analysis would be decades-old with maximum face amounts of $1,000.

The suit seeks penalties under the whistleblower law of $5,500 to $11,000 for each of the 4,766 policies, or at least $26.2 million. It seeks damages of three times the $524.3 million it contends is property overdue to the state.

Mr. Prescott said Total Asset has whistleblower suits pending under seal against various insurers in other state courts, declining to elaborate.

Earlier this month, Prudential agreed with 20 states to improve its effort to identify if policyholders have died by taking into account such things as possibly inaccurate Social Security numbers.

READ MORE or subscribe to the Wall Street Journal

Write to Leslie Scism at leslie.scism@wsj.com

ANONYMOUS ETHICS HOTLINE SERVICES

KPMG No Longer Loaning Tax Staff To GE

Francine McKenna, Contributor — Tue, 24 Jan 2012 15:24:36 -0800

KPMG will no longer loan tax professionals to GE during busy season, according to a source close to the situation. KPMG was billing an extra $8-10 million, over and above the audit each year, for the service.

It looks like a regulator got to both KPMG and GE, but quietly. I doubt we’ll ever see a public sanction or fine from the PCAOB or the SEC for KPMG.

My story exposing this prohibited activity by an auditor for an audit client was published in this column last March. Loaning, assigning, or “seconding” tax or any “bookkeeping” staff to an audit client is prohibited by the Sarbanes-Oxley Act of 2002 and by regulations that precede Sarbanes-Oxley.

KPMG was recently sanctioned by the SEC for a similar transgression involving their Australian office.

KPMG Australia and at least one other KPMG member firm outside Australia seconded non-tax professional staff to work at each client’s premises, under the supervision and direction of each client, doing the same types of work that each client’s own employees or managers ordinarily would perform, in violation of the prohibition under Rule 201(c)(4)(vi) against “[a]cting, temporarily or permanently, as a director, officer, or employee of an audit client, or performing any decision-making, supervisory, or ongoing monitoring function for the audit client.”

I guess they thought the SEC/PCAOB would never go after them in the U.S. – and never for trying to “please” such a long-term, high-profile client. KPMG has been GE’s auditor for more than 100 years.

Going Concern reported in September, based on a tip, that KPMG professionals had been ordered to preserve all correspondence and documentation related to the tax “loaned staff” assignment with long-time client GE. That meant someone – the SEC or PCAOB – was investigating my story. READ MORE...

The 2012 Governance Risk Management and Compliance Summit

The GRC Summit — Tue, 24 Jan 2012 13:58:22 -0800

About The GRC Summit

Learn best practices from case studies and thought leaders in the GRC arena:

May 8-10, 2012 • Hyatt Harbor Side • Boston, MA

The summit provides risk and compliance executives a venue to share ideas, learn from peers and evolve existing methodologies that have been created to support the people, process and technologies of their organizations. The GRC Summit is an intimate gathering that focuses on educating today’s leaders on the significance of the GRC methodology.

In it’s 6th installment The 2012 Governance, Risk Management and Compliance Summit will be looking at a multitude of GRC topics. From more general discussions surrounding the GRC framework to more granular topics of financial risk assessments, regulatory compliance and IT GRC. Among topics covered an emphasis will be given to the following major GRC discussion points:

Developing and deploying an integrated GRC strategy

Managing the risk of information security and privacy

Analyzing regulatory reform and financial risk

Financial processes, mandates and audit functions

Building ethics into a coordinated GRC process

READ MORE...

he GRC Summit Boston

PDAC2012 International Convention Trade Show

PDAC.ca — Tue, 24 Jan 2012 13:50:23 -0800

Prospectors & Developers Association of Canada - International Convention, Trade Show & Investors Exchange

March 4-7, 2012, Toronto, Canada

Metro Toronto Convention Centre - South Building

Only going to one mining investment show this year? Make it this one.
PDAC International Convention, Trade Show & Investors Exchange is the world’s leading Convention for people, companies and organizations in, or connected with, mineral exploration.

The four-day annual Convention held in Toronto, Canada has grown in size, stature and influence since it began in 1932 and today is the event of choice for the world’s mineral industry. In addition to meeting over 1,000 exhibitors, between 27,700 attendees from 120 countries, it allows you the opportunity to attend technical sessions, short courses as well as social and networking events .

PDAC 2012 – Where the world’s mineral industry meets!

READ MORE...

MassMin 2012 6th International Conference & Exhibition on Mass Mining

CIM.org — Tue, 24 Jan 2012 13:39:57 -0800

June 11-13, 2012 - Sudbury, Ontario

Registration opens February 1, 2012

MassMin 2012 will bring together researces, engineers and practitioners to present the latest accomplishments, innovations and potential future directions in mass mining and its applications around the world.

The objective of MassMin is to facilitate close dialogue among experts on issues relating to research, technological development and the application of Mass Mining around the world.

This conference promotes strong interactions between academic and industry in all the aspects of the technology.

Conference Chairs

Professor Greg Baiden, Canada

Dr. Yassiah Bissiri, Canada

READ MORE...

Asia Mining Congress Capital Raising & Investment Conference for the Mining Industry

Asia Mining Congress — Tue, 24 Jan 2012 13:28:40 -0800

Asia’s most influential capital raising and investment conference for the mining industry

Exploration, investment and development for miners, financiers and investors

26 - 30 March 2012, Marina Bay Sands, Singapore

Asia Mining Congress is the number one destination for mining companies around the world looking to connect with Asian institutional, corporate and private investors.

It is the only event where a large diverse group of investors from major miners to Asian industrial conglomerates, sovereign wealth funds, private equity firms, hedge funds, family offices and many others gather to discuss investment strategies in the mining sector. No other event presents you with the largest group of investor speakers who are looking for investment, M&A, deals and partnerships. READ MORE...

Sarbanes Oxley Compliance

Global Ethics University — Tue, 24 Jan 2012 13:11:21 -0800

Understanding the Sarbanes-Oxley Act of 2002 and Sarbanes-Oxley Act Compliance for your Company

Sarbanes-Oxley act compliance can be somewhat confusing. To help you understand Sarbanes-Oxley and business a little better, you need to understand a little history about it. The U.S. federal Sarbanes-Oxley Act was created to protect investors by improving the accuracy and reliability of corporate disclosures. The act covers issues such as establishing a public company accounting oversight board, auditor independence, corporate responsibility and enhanced financial disclosure. It is officially called the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOX or SarbOx and was signed into law on July 30, 2002 by President George W. Bush. It was designed to review the dated legislative audit requirements, and is considered the most significant change to United States securities laws since the New Deal in the 1930's.

Sarbanes-Oxley and businesses work together to increase the overall integrity and ethics in business. The act came in the wake of a series of corporate financial scandals, including those affecting Enron, Tyco International, and WorldCom (now MCI ). The law is named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH). It was approved by the House by a vote of 423-3 and by the Senate 99-0.

So, how does this affect your business? Part of Sarbanes-Oxley compliance includes ethics training. Sarbanes-Oxley seminars and Sarbanes-Oxley training has become a huge part of this. As of November 1, 2004, Federal Sentencing Guidelines require compliance and Sarbanes Oxley training for ALL employees. Although you don't have to provide specific kinds of Sarbanes-Oxley ethics training, Sarbanes-Oxley seminars should include a thorough coverage of your ethics and compliance policies. Amendments to the Federal Sentencing Guidelines were proposed which require all organizations to periodically provide Sarbanes-Oxley compliance and ethics training to all employees. As of November 1, 2004 these amendments are now law. Having a code of ethics is a very important part of this Act.

Every company, both big or small, should take note of the new Federal Sentencing Guidelines which require Sarbanes-Oxley training. Ethics for a Modern Workforce and help you stay in compliance. Sarbanes-Oxley seminars are easy, economical, and has a positive impact on employees. Global Ethics University can your Sarbanes-Oxley compliance portal and provide necessary Sarbanes-Oxley seminars. Take every precaution possible to abide by the new Federal Sentencing Guidelines and don't wait until a crisis occurs before you do something. Compliance portal Sarbanes-Oxley is a necessary element in providing the right kind of training.

While the Sarbanes-Oxley Act covers only publicly traded companies, the Federal Sentencing Guidelines apply to all organizations both publicly and privately held. Simply providing employees an ethics policy or code of conduct is not enough or just distributing a code of ethics or code of conduct for employees is not enough. Effective Sarbanes-Oxley compliance ethics training is required. Compliance and ethics programs must not simply be on paper, but they must be communicated to and used by employees. READ MORE...

Mention this promo code: wbc10 and receive 10% off your next Global Ethics University course

Case Study SOX IT Compliance

Danny Lieberman — Fri, 20 Jan 2012 15:46:48 -0800

We performed a Sarbanes-Oxley IT top down security assessment for a NASDAQ-traded advanced technology company.

The objectives for the study were to evaluate the internal and external threats that impact the company’s information assets.

Using the Business threat modeling (BTM) methodology, a practical threat analysis PTA threat model was constructed and a number of threat scenarios were analyzed.

Data was collected using structured interviews and network surveillance (with a Fidelis XPS appliance). Assets were valuated by the CFO and the IT security operations and technologies were valuated by the CIO.

The output of the study was a cost-effective, prioritized program of security controls.This program was presented and approved by the management board of the company- leading to an immediate cost savings of over $120,000/year in the information security budget.

The detailed threat model was provided to the client and is currently used to perform what-if analysis and track the data security implementation.

Download the data security case study and download the data security report to the management.

Conclusions: READ MORE...

FBI Sweep Targets Big Funds

JENNY STRASBURG, MICHAEL ROTHFELD and SUSAN PULLIAM — Thu, 19 Jan 2012 12:12:03 -0800

Federal prosecutors alleged that a "criminal club" in the hedge-fund world made tens of millions of dollars trafficking inside information, following up on a string of early morning arrests that involved employees of SAC Capital Advisors LP and other prominent financial firms.

In an expansion of a high-profile investigation into alleged insider trading, the Federal Bureau of Investigation arrested four people in New York, Boston and California, and the government unsealed charges against three others. All were charged criminally with securities fraud and conspiracy to commit securities fraud.

Court documents described enormous profits on allegedly illegal trades—including more than $50 million in gains alone by a single hedge fund, Level Global Investors LP, on trades in shares of computer maker Dell Inc., according to the government's criminal complaint.

Investigators alleged that a ring of traders and analysts at competing financial firms swapped information, resulting in a total of $61.8 million in illicit gains. That figure rivals the amount of illegal profits in trades overseen by Raj Rajaratnam, the Galleon Group founder convicted last year and sentenced to 11 years in prison, a record for insider trading.

The complaint, filed in a New York federal court, "describes a circle of friends who essentially formed a criminal club," said Manhattan U.S. Attorney Preet Bharara. "It was a club where everyone scratched everyone else's back." Wednesday's allegations mark a new chapter in an unprecedented era of insider-trading prosecutions. Since late 2009, the government has secured 56 guilty pleas or convictions out of 63 people charged with insider trading.

Many of the previous charges involved the use of "expert-network" firms, which connect analysts and traders with public-company employees and other consultants seeking payment for information.

The latest charges allege that fund managers cut out the middlemen by developing their own sources of technology-company information rather than relying on consultants, and shared it with each other for mutual benefit.

The FBI early Wednesday arrested Jon Horvath, a technology analyst with SAC's Sigma Capital Management division in Manhattan, marking the first time criminal insider-trading charges have been brought against a current employee of Stamford, Conn.-based SAC Capital. Mr. Horvath was released on a $750,000 bond and $50,000 in cash.

"Throughout a 10-year career as a respected investment analyst, Jon Horvath has conducted himself with honesty and integrity," said his lawyer, Steven Peikin. "He has done nothing wrong, and the charges brought against him today will be shown to be meritless."

The criminal complaint alleged that Mr. Horvath shared information he received from another analyst with the Sigma portfolio manager to whom he reported, referred to in the complaint as "portfolio manager 1."

According to people familiar with the matter, that portfolio manager is Michael Steinberg, who has worked at Sigma since 1997 and is a close associate of SAC founder Steven A. Cohen. An SAC spokesman said the firm is continuing to cooperate in the investigation and declined further comment. Mr. Steinberg declined to comment through the spokesman.

As part of the wide-ranging probe, the government has been investigating whether SAC, which manages $14 billion, used inside information in trading health-care companies, among others, including trades in an account overseen by Mr. Cohen, according to people familiar with the matter. Mr. Cohen declined to comment through a spokesman.

Also Wednesday morning, Anthony Chiasson, a former hedge-fund manager at Level Global Investors, surrendered in New York, after FBI agents earlier converged on his apartment on Manhattan's Upper East Side and left empty-handed because Mr. Chiasson wasn't home.

A half dozen FBI agents in dark coats met a little after 5:30 a.m. at a Starbucks coffee shop across from Mr. Chiasson's apartment building. They talked quietly near a wall of windows. "There is a service exit," one agent said of Mr. Chiasson's building. Minutes later, they walked silently out of the shop.

About a block away, the agents put on bullet-proof vests and, just before 6 a.m., walked swiftly back down the street to the glass double doors of Mr. Chiasson's building. They entered and talked with a security guard before entering an elevator, turning back to face the lobby and heading upstairs. A few minutes later, the agents left the building, and drove off.

Mr. Chiasson, wearing a white dress shirt and slacks later in court, was released on a $2.5 million bond, secured by half that amount in cash or property.

"He's not going anywhere because he didn't do anything wrong and he wants to get an opportunity to clear his name," Mr. Chiasson's lawyer, Gregory Morvillo, told a judge Wednesday, arguing that bail wasn't needed for him to show up to face the charges.

In Boston, agents arrested Todd Newman, a former portfolio manager with hedge-fund firm Diamondback Capital Management who oversaw technology investments. A lawyer for Mr. Newman didn't return calls for comment. Diamondback's founders sent investors a letter saying the firm had been "proactively assisting" the government in its investigations, and considered Wednesday's actions "an important step towards putting this matter behind us." A spokesman for Diamondback declined to comment beyond the letter.

Mr. Newman was ordered to post a $3 million bond as bail, secured by $1 million in assets.

A few hours later, in California, agents arrested Danny Kuo, a vice president and technology-fund manager with Whittier Trust Co. in South Pasadena. Mr. Kuo couldn't be reached for comment. Whittier Trust didn't respond to a request for comment

The government also unsealed criminal charges against Spyridon "Sam" Adondakis, a former Level Global analyst who worked under Mr. Chiasson; Jesse Tortora, an ex-Diamondback analyst under Mr. Newman; and Sandeep "Sandy" Goyal, who until this month was a technology analyst at mutual-fund company Neuberger Berman Group LLC.

Prosecutors said Mr. Goyal, who worked at Dell before becoming an investment analyst, obtained nonpublic information from Dell insiders ahead of public earnings announcements, and shared it with other defendants. Dell hasn't been accused of wrongdoing.

Messrs. Goyal, Tortora and Adondakis have entered guilty pleas and are cooperating with the government in hopes of receiving lighter sentences, the government said.

A spokesman for Neuberger Berman said, "This unethical behavior is contrary to the core values of our firm and the culture of compliance in which we operate." Neuberger hasn't been accused of wrongdoing.

Mr. Bharara, the Manhattan U.S. attorney, called Level Global's alleged $53 million profit from trading in Dell shares "an enormous bet" that "wasn't much of a gamble because the game was rigged."

Dell has cooperated in the investigation, and the allegations described would be "a clear violation of Dell's policy regarding disclosure of material, nonpublic information," a Dell spokesman said Wednesday.

Mr. Chiasson, 38, was co-founder of Level Global, one of several firms the FBI raided in November 2010 after a Wall Street Journal article disclosed details of a sweeping federal insider-trading probe.

Level Global managed about $4 billion in assets at the time of the raid, but it closed last year, citing the impact of the probe.The hedge fund was a client of Primary Global Research LLP, a Mountain View, Calif. expert-network firm that arranged phone calls between public-company employees moonlighting as consultants and hedge funds interested in their companies and industries.

Several employees and consultants for that expert firm have pleaded guilty or been convicted in the probe. A Primary Global spokesman declined to comment.

The Journal reported on Nov. 30, 2011, that investigators were pursuing charges against Mr. Chiasson, among other individuals who currently or previously worked at prominent investment firms, citing people familiar with the matter.

A parallel civil complaint from the Securities and Exchange Commission filed Wednesday alleged that all seven men, along with Diamondback and Level Global, engaged in a $78 million insider-trading scheme. READ MORE or subscribe to the Wall Street Journal

Write to Jenny Strasburg at jenny.strasburg@wsj.com and Michael Rothfeld at michael.rothfeld@wsj.com

Public companies are required to have a whistleblower policy and process in place for employees

WhistleBlower Security - Shannon Walker — Wed, 18 Jan 2012 15:50:51 -0800

WhistleBlower Security offers services to meet the US requirements of Sabanes Oxley and Canadian Multi-Lateral Instrument 52-110 which requires that public companies have a policy and procedure in place to deal with the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and
(b) the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

With an easy to use system, WhistleBlower will ensure that you meet this requirement and also introduce a tool that employees will appreciate and feel safe to sue. READ MORE...

Trustee Sues Madoff Investors to Recover $1875 Million

JACQUELINE PALANK — Wed, 18 Jan 2012 09:33:34 -0800

The official recovering funds for Bernard Madoff's swindled investors is suing several international firms for a total of $187.5 million.

The four lawsuits, filed Thursday by trustee Irving Picard, are the latest of hundreds trying to recover money that Madoff fraudulently paid out to investors as part of the Ponzi scheme that landed him a 150-year prison sentence.

According to Mr. Picard, the defendants invested in two big Madoff feeder funds: Fairfield Sentry Ltd. and Kingate Global Fund Ltd. These funds reached out to investors around the world and funneled their money into Madoff's investment firm. When Mr. Madoff paid out returns, the money went back to these investors through the feeder funds.

The funds that went back weren't legitimate returns but other investors' money, which is why Mr Picard is seeking to claw back these funds.

For example, Mr. Picard is seeking nearly $77 million from Banco Itau Europa Luxembourg SA and Banco Itau Europa International. According to the lawsuit, much of the money—$70.6 million—came from the wealth-management firms' investments with Fairfield Sentry, while Kingate paid out the remainder.

Mr. Picard is seeking another $30.6 million from French bank Credit Agricole SA and its Credit Agricole (Suisse) unit, $16.3 million of which they received from Fairfield and the rest from Kingate.

Another defendant is Arden Asset Management Inc. and several affiliates, from whom Mr. Picard is seeking a total of $43.4 million. Of that, the investment firm received $12.6 million from Fairfield and $30.8 million from Kingate.

Finally, U.K. investment firm Grosvenor Investment Management Ltd. and its affiliates face a demand for the $36.5 million it received: $31.5 million from Fairfield and $5 million from Kingate.

Representatives of the four defendants couldn't immediately be reached for comment Friday.

The lawsuits were filed in the U.S. Bankruptcy Court in Manhattan, which is overseeing the liquidation of Mr. Madoff's investment firm, Bernard L. Madoff Investment Securities LLC. READ MORE or subscribe to the Wall Street Journal

Write to Jacqueline Palank at jacqueline.palank@dowjones.com

SEC Loses Inspector General Gains Whistleblower Official

Donna Mitchell — Wed, 18 Jan 2012 15:32:24 -0800

The SEC has appointed a former U.S. special agent, Jane A. Norberg, as its deputy chief of the Office of the Whistleblower.

More than 14 years ago, for the U.S. Secret Service, Norberg worked with confidential informants in planning, organizing and conducting investigations of federal crimes. Those offenses included bank fraud, counterfeiting of U.S. currency, and forgery of federal checks and bonds.

The Office of the Whistleblower is part of the enforcement division, and was established via the Dodd-Frank Wall Street Reform and Consumer Protection Act. Individuals who voluntarily provide original information to the SEC that leads to successful enforcement actions can earn rewards for their information.

“The whistleblower program is an important component of the SEC’s efforts to stop those who prey on investors and destroy the public’s trust in our capital markets,” Norberg said in a statement. “I am honored and excited to join the Commission staff and look forward to helping the agency build on the success achieved in the short time since the program was established.”

After her career as a special agent, Norberg was an associate at Shearman & Sterling, a law firm based in New York. She advised major public corporations on executive compensation disclosure, corporate governance issues and other securities law matters. READ MORE...

MF Global Probe Focuses on Back Office

AARON LUCCHETTI, JULIE STEINBERG and MIKE SPECTOR — Tue, 17 Jan 2012 10:24:54 -0800

Investigators on the hunt for an estimated $1.2 billion in customer money missing since MF Global Holdings Ltd. collapsed are zeroing in on the securities firm's back-office operations in Chicago, people familiar with the situation said.

One back-office employee has told people she disputes congressional testimony by Jon S. Corzine, MF Global's former chairman and chief executive, that she provided assurance that a $200 million transfer was proper, according to people familiar with the matter.

Civil and criminal regulators have "talked to a lot of people" in the Chicago office, which handled day-to-day movement of money for MF Global, including a $6 billion customer-segregated account that was tapped shortly before the company filed for bankruptcy-court protection Oct. 31, according to a person close to the investigation.

Some of the roughly 700 employees have been "approached by everyone and their mother" since regulators swept into the building two months ago, this person said. In contrast, federal prosecutors haven't interviewed Mr. Corzine, operations chief Bradley I. Abelow or Chief Financial Officer Henri J. Steenkamp, top executives who worked at the securities firm's headquarters in New York, according to people familiar with the matter. Messrs. Corzine, Abelow and Steenkamp haven't been accused of wrongdoing.

It isn't clear how much progress the Justice Department, two U.S. attorney's offices, Commodity Futures Trading Commission, Securities and Exchange Commission and other regulators have made as a result of the scrutiny in Chicago, ranging from accountants to controllers to treasury officials. Nestled between the Chicago Board of Trade and the elevated train in the city's financial district, the back office was responsible for making sure that customer futures accounts were handled properly. Another floor housed MF Global salesmen.

People close to the probe said investigators are pushing hard to determine which Chicago back-office employees knew about the movement of money in the days before MF Global tumbled into bankruptcy protection, who ordered certain money transfers and if anyone knew that the transfers would lead to a shortfall in the customer-segregated account.

As company officials tried in late October to overcome a customer exodus and demands for more collateral from counterparties, numerous MF Global employees in Chicago stayed at work around the clock, a person familiar with the situation said. Some workers, exhausted and nerve-wracked, broke down under the pressure and cried, this person said.

The back-office employee who has disputed Mr. Corzine's testimony is Assistant Treasurer Edith O'Brien. She has told people that she disagrees with Mr. Corzine's suggestion at a House subcommittee hearing in December that she provided assurance that a $200 million transfer to J.P. Morgan Chase & Co. three days before the bankruptcy-protection filing was proper, according to people familiar with the situation.

She has declined to be interviewed by a House subcommittee and the Justice Department and is seeking immunity from prosecution in exchange for cooperation, said people familiar with the matter. Ms. O'Brien, who couldn't be reached for comment, still works for a trustee now unwinding the company.

Mr. Corzine testified that he got "assurance…from our back-office people in Chicago," including Ms. O'Brien, that the transfer complied with all the relevant rules. The transfer was needed to cover an overdraft in an MF Global account at J.P. Morgan.

Mr. Corzine testified that he "contacted the firm's back office in Chicago and others and asked them to resolve this issue, which I understood they did." The former Goldman Sachs Group Inc. chairman, U.S. senator and New Jersey governor said the "back office in Chicago explicitly confirmed to me that the funds were properly transferred." At the same hearing, Mr. Corzine said Ms. O'Brien was the person he spoke to about the issue. A spokesman for Mr. Corzine said the former executive "stands by his testimony before Congress." Mr. Corzine has said he never directed anyone at MF Global to misuse customer funds. Ms. O'Brien hasn't been accused of wrongdoing.

It isn't clear exactly what Ms. O'Brien's role in the transfer was or why she has disputed Mr. Corzine's testimony. A letter sent from J.P. Morgan to MF Global the next day was addressed to her and began with "Dear Edith," according to a copy reviewed by The Wall Street Journal. The letter, from J.P. Morgan Managing Director Donna Dellosso, asked MF Global to "acknowledge and confirm that the transfer and withdrawal…out of such Customer Segregated Account…for the purpose of covering overdraft amounts in accounts with J.P. Morgan represented your actual interest in such funds" and were "made in accordance with the provisions" of U.S. commodities laws and rules.

At the bottom are two blanks where MF Global was supposed to indicate it "acknowledged and agreed" that the $200 million transfer was proper, according to the copy of the letter reviewed by the Journal. No one ever signed the letter, a person familiar with the matter said.

In addition to Ms. O'Brien, investigators have expressed interest in talking to Christy Vavra, who ran MF Global's treasury operations and helped handle the movement of customer money, according to a person familiar with the situation.

Another person of interest to investigators is Christine Serwinski, who worked with Ms. O'Brien in MF Global's Chicago office. Ms. Serwinski was the company's North American finance chief and ultimately reported to Mr. Steenkamp, the chief financial officer of MF Global. Mr. Corzine told lawmakers last month that Ms. Serwinski was "at the very top" of employees who oversaw customer funds, though she was on vacation for part of the week leading up to MF Global's bankruptcy filing. Ms. Vavra and Ms. Serwinski haven't been accused of wrongdoing.

At the time of MF Global's collapse, Ms. Serwinski had told friends that she planned to leave the securities firm in early 2012, according to people familiar with the matter. MF Global had begun working on a transition to bring in her successor, these people said. Ms. Serwinski and Ms. Vavra couldn't be reached for comment. READ MORE or subscribe to the Wall Street Journal

—Michael Rothfeld and Scott Patterson contributed to this article.

Write to Aaron Lucchetti at aaron.lucchetti@wsj.com, Julie Steinberg at julie.steinberg@dowjones.com and Mike Spector at mike.spector@wsj.com

SEC Inspector General Kotz leaving agency

By Sarah N. Lynch — Tue, 17 Jan 2012 13:55:42 -0800

(Reuters) - David Kotz, the tough internal watchdog at the U.S. Securities and Exchange Commission, is leaving the agency at the end of January, the SEC said on Tuesday.

Kotz, 45, joined the SEC in December 2007 after previously working as the inspector general of the Peace Corps.

He has made a name for himself as a prolific inspector general at the SEC, investigating everything from leasing and contracting to insider-trading and even pornography-watching by agency employees.

He has also faced some criticism from SEC employees who have complained his tactics have led to a culture of fear at the agency.

He plans to join Gryphon Strategies, a private investigative services firm where he will serve as a managing director in its Washington office. He will focus on conducting corporate fraud investigations and helping whistleblowers seeking to expose fraud, the SEC said.

"I am tremendously proud of the accomplishments of my office and the agency over the past four years," Kotz said in a statement. "The reports we have issued have not only been significant to the agency, Congress and the investing public, but they have also directly resulted in a transformation of many of the divisions and offices of the commission." READ MORE...

US charges Russian father and son with cyber fraud

Basil Katz; Editing by Greg McCune — Tue, 17 Jan 2012 14:07:13 -0800

(Reuters) - U.S. authorities on Tuesday unsealed criminal charges accusing a father and son team, both Russian citizens, of hacking into U.S. bank accounts and illegally snatching credit card numbers and stealing hundreds of thousands of dollars.

The criminal indictment, which was brought in Manhattan federal court in 2007 but made public on Tuesday, charges Vladimir Zdorovenin, and his son, Kirill Zdorovenin, with eight counts of fraud and one count of conspiracy.

The indictment was made public as Vladimir Zdorovenin, 54, was extradited from Switzerland to New York on Monday and will be presented before a federal magistrate judge later on Tuesday. He was arrested in Zurich, Switzerland in March.

Kirill Zdorovenin, remains at large, authorities said.

The indictment accuses the Russians of devising a variety of schemes in 2004 and 2005, including stealing credit card numbers and hacking into the brokerage and other accounts of their targets in the United States. READ MORE...

2011 Was a Banner Year for FCPA Enforcements and Trials

Shannon Green — Tue, 17 Jan 2012 14:20:46 -0800

It was another banner year for the Foreign Corrupt Practices Act, with the U.S. Securities and Exchange Commission and Justice Department trying more cases in 2011 than in any other year.

According to a year-end review released this week by Gibson, Dunn & Crutcher, enforcement actions also reached their second-highest level in the 34-year history of the act, with a total of 48. That number is down from an unprecedented 74 actions in 2010. (Last year’s statistics were skewed by a single large-scalesting operation.)

Enforcement numbers were lagging at the mid-year point, says John Chesley, an associate in Gibson Dunn’s Washington office and a co-author of the report. It’s significant, he says, that by year’s end, “the numbers were right up there.”

The government is dedicating significant resources to enforcing the FCPA. And that has lawyers and their corporate clients scrounging to predict which direction the law will take next. READ MORE...

Angola End Silence on Missing Funds

Human Rights Watch — Tue, 17 Jan 2012 14:25:56 -0800

Clarify US$32 Billion Accounting Gap

(Washington, DC) – The government of Angola should publicly disclose its efforts to trace tens of billions of dollars in missing public funds apparently connected to the state oil company, Sonangol, Human Rights Watch said today in an open letter to the country’s finance minister.

In December 2011, the International Monetary Fund reported that there was an unexplained US$32 billion discrepancy in the Angolan government’s accounts from 2007 through 2010.

“The Angolan government can’t account for tens of billions of dollars in public funds, and it needs to explain what happened to that money,” said Arvind Ganesan, business and human rights director at Human Rights Watch. “The people of Angola have a right to know.” READ MORE...

ExTrader David Slaine Helped Lead to Rajaratnam US Says

Bloomberg - Bob Van Voris — Tue, 17 Jan 2012 14:48:13 -0800

(Updates with excerpt from letter in third paragraph.)

Jan. 9 (Bloomberg) -- David Slaine, a former Galleon Group LLC employee who pleaded guilty to criminal charges, was crucial to the prosecution of Zvi Goffer’s insider-trading ring and helped lead investigators to Raj Rajaratnam and Primary Global Research LLC, U.S. prosecutors said.

Slaine wore a wire to record dozens of conversations with Goffer and others, helping to spur what became the biggest probe of insider trading at hedge funds, prosecutors from the office of U.S. Attorney Preet Bharara in Manhattan said today in a letter to U.S. District Judge Richard Sullivan. Calling Slaine’s cooperation “nothing short of extraordinary,” the government asked for leniency when he’s sentenced.

“Evidence gathered by Slaine played a role in, among other things, the successful prosecution of Raj Rajaratnam and his co- conspirators, as well as the defendants in the Primary Global Research case,” according to the letter. “His assistance was the launching point for many successful and ongoing criminal investigations of multiple insider trading networks.”

Slaine, who pleaded guilty to conspiracy and securities fraud in December 2009, testified at the trial of Goffer, his brother Emanuel Goffer and Michael Kimelman that he cooperated with federal agents for about 2 1/2 years to try to avoid prison. READ MORE...

Event 23rd Annual ACFE Fraud Conference and Exhibition

The Association of Certified Fraud Examiners — Tue, 17 Jan 2012 15:32:51 -0800

Conference Overview - June 17-22, 2012, Gaylord Palms Resort and Convention Center, Orlando, FL.

The 23rd Annual ACFE Fraud Conference and Exhibition is the can't miss event for anyone involved in the prevention, deterrence or detection of fraud. From the informative and inspiring sessions to the multiple networking opportunities, you'll walk away with the skills, connections and resources you need to take your fraud investigations to the next level.

Leading Speakers
The ACFE Annual Fraud Conference traditionally hosts the foremost experts in the anti-fraud field. These leaders in their fields share their insights and address the key anti-fraud issues relevant to you. Previous conference speakers include: John Walsh, Michael Chertoff, Harry Markopolos, Senator George Mitchell, Senator Paul Sarbanes, the Honorable Michael Oxley, Ben Stein, Rudy Giuliani, and many others.

Keynote speakers for the 23^rd Annual Conference include: Michael Woodford, MBE, Former Olympus Corp. CEO and Whistleblower, Pamela Meyer, CFE
Best-selling author of Liespotting, Diana B. Henriques, Senior Financial Writer, The New York Times, Mark Whitacre, Convicted Fraudster.

READ MORE...

Draghi hails tentative stabilisation

Financial Times - Mahathir Mohamad — Thu, 12 Jan 2012 17:36:11 -0800

Shannon Walker, President of WhistleBlower Security blogs: A very interesting op-ed piece written by Mahathir Mohamad, the former Prime Minister of Malaysia. This really makes one stop and ponder the future of the financial markets and the ultimate recovery and restructuring that needs to occur in Europe and the US.

West needs to go back to capitalist basics

The Malays have a saying which inter alia means that when you lose your way, go back to the beginning and start again. I believe that everyone has lost their way in handling the current financial crisis. The west in particular needs to rethink some essentials.

The world is still Eurocentric: how Europe handles the financial crisis is of universal importance. But I have serious doubts about Europeans’ "infallibility". I particularly dislike their double standards. Centuries of hegemony have convinced them they know best what is good for the world: their values are to be accepted as universal; Asian values are deemed irrelevant. READ MORE...

SEC changes settlement language for some cases

Aruna Viswanatha and Sarah N. Lynch — Mon, 09 Jan 2012 10:33:03 -0800

(Reuters) - U.S. securities regulators said on Friday that defendants can no longer settle civil cases using "neither admit nor deny" language if they have already admitted to wrongdoing in parallel criminal cases.

The policy change, announced by Securities and Exchange Commission Enforcement Director Robert Khuzami on Friday, applies only to instances where a defendant has already admitted to violating criminal laws.

It comes just over a month after a federal judge in New York rejected a proposed $285 million settlement between the SEC and Citigroup, in part because the bank had not admitted to wrongdoing. However, in that case, no parallel criminal charges have been filed.

It seemed "unnecessary" for the SEC to include its traditional "neither admit nor deny" approach if a defendant had already been criminally convicted of the same conduct, Khuzami said. READ MORE...

Key Findings from the Global Integrity Report

The Global Integrity Report — Mon, 09 Jan 2012 11:29:39 -0800

The Global Integrity Report is a tool for understanding governance and anti-corruption mechanisms at the national level. Written by local researchers and journalists, the Report is characterized by an innovative, award-winning research methodology; a robust peer review process; and start-to-finish transparency. READ MORE...

Public AntiCorruption Initiatives Russia Country Profile

Public Anti Corruption Initiatives — Mon, 09 Jan 2012 11:42:59 -0800

Legislation: President Medvedev submitted a draft anti-corruption bill On Counteraction to Corruption to the State Duma in October 2008, as part of the National Anti-Corruption Plan (see below) and Russia's international obligations stemming from the United Nations Convention against Corruption and the Council of Europe Criminal Law Convention on Corruption, to which Russia is a party. Russia is also a member to the Council of Europe Group of States Against Corruption (GRECO), but according to a May 2011 article by Moscow Times, Russia has only carried out about one-third of the 26 anti-corruption obligations required by GRECO. In May 2011, Russia joined the OECD Working Group on Bribery in International Business Transactions which is a necessary step for acceding to the OECD Anti-Bribery Convention. The anti-corruption package, the Anti-Corruption Legislation, was passed by the Duma in its third reading and adopted on 30 December 2008, coming into force on 10 January 2009 and consists of three principle laws and numerous amendments. The new anti-corruption laws gave, for the first time in Russia, a wide definition of corruption which criminalises corruption in the form of active and passive bribery, abuse of office, commercial bribery, trading in influence both in public and private sectors and corruption by agents. The anti-corruption package has widened the definition of commercial bribery in the Criminal Code to include non-commercial organisations in the scope of the law and has slightly raised the penalty for the infringement. READ MORE...

4th Russia and CIS Summit on AntiCorruption

AmericanConference.com — Mon, 09 Jan 2012 11:55:05 -0800

4th Russia and CIS Summit on Anti-Corruption

Tuesday, March 20 to Wednesday, March 21, 2012
Hotel Lotte Moscow, Moscow

Исполнение антикоррупционного законодательства коренным образом меняет подход глобальных корпораций к ведению бизнеса. Не отстает ли Ваша клмпания в данном вопросе? Посещение ключевого регионального мероприятия, посвященного антикоррупционному комплаенсу, позволит Вам быть в курсе последних вопросов, связанных с требованиями по соблюдению законодательства.

Присоединяйтесь к Вашим коллегам-делегатам “ключевого для России и СНГ события по антикоррупционному комплаенсу». Вам будет предоставлена уникальная возможность для общения с лидерами и перенятия передового опыта. Вот уже в 4-й раз, Саммит России и СНГ по Антикорруации, проводимый Американским Институтом Конференций, предоставит Вам комплексную практическую информацию о глобальных вызовах, связанных с соблюдением антикоррупционного законодательства, а также с выявлением схем взяточничества и смягчением Ваших комплаенс-рисков. Подробнее

Ожидается, что мероприятие будет распродано задолго до начала.
Зарегистрируйтесь сегодня, позвонив 1-416-926-8200 в США, +44 20 7878 6888 в Европе, или онлайн www.AmericanConference.com/anticorruptionRUS.

Conference expected to sell out. Register for this exclusive event today by calling 1-416-926-8200 in the US, or +44 20 7878 6888 in Europe; or register online at www.AmericanConference.com/anticorruptionRUS.

Russia strengthens anticorruption law

Julius Melnitzer — Mon, 09 Jan 2012 12:14:06 -0800

The Russian legislature has strengthened Russia’s existing anti-bribery law. The amendments, effective last May, expand the law to include bribery of foreign government officials by Russian nationals, create a new offence of acting as an intermediary for bribery, and impose fines up to 100 times the value of the bribe.

Sidley Austin LLP has more in its Anti-Corruption Quarterly.

Mining Exploration in Russian Federation and Kazakhstan Investment Climate Advantages and Technology Transfer

Canada Eurasia Russia Business Association — Mon, 09 Jan 2012 12:25:40 -0800

The conference is organized in collaboration with Altynalmas Gold on the margins of Association of Mining Exploration BC Round up on January 23rd in Vancouver. The objective of this event is to update Canadian mining interests on the significant opportunities in the mining sectors of the Republic of Kazakhstan and Russian Federation, and where possible - facilitate investment, technology transfer, and offer a venue for the exchange of perspectives and experience.

The conference is taking place on January 23rd from 2 to 7PM at Shangri-La Hotel Vancouver. READ MORE...

Fraud and Asset Tracing Gulf

C5 Group Inc. — Mon, 09 Jan 2012 12:42:17 -0800

Do you have the expertise and contacts in the area needed to capitalise?

Sunday, January 22 to Tuesday, January 24, 2012

Al Murooj Rotana Hotel, Dubai

As the global economy continues to emerge from a period of significant decline, the Gulf States are rebuilding business practices and establishing a solid foundation to encourage growth in the region. However, fraudulent activity is still being discovered and major international cases are unearthing the proceeds of crime, hidden in increasingly complex locations and structures and practitioners from all corners of the globe are being instructed by clients, to gather the evidence, trace and recover the assets. READ MORE...

What Companies Should Expect from the SEC in the New Year

CFO.com - Howard E. Berkenblit — Tue, 10 Jan 2012 13:05:42 -0800

New disclosure requirements and new demands on companies top the securities regulator's 2012 agenda.

Companies looking ahead at their 2012 agenda need to also consider an outside party’s to-do list that may have an impact on their business strategy. New rules the Securities and Exchange Commission plans to tackle this year fall into one of three areas: Dodd-Frank Act to-do items, proposals the SEC had temporarily tabled and will revisit, and new legislation that could help smaller companies extricate themselves from some burdensome reforms.

While many question whether the Dodd-Frank Act is actually the agent of change it set out to be, the first 18 months of its implementation have been relatively anticlimactic for nonfinancial companies and their management. One reason is the continued delay of some of the rules. The commission recently updated its schedule for when the regulator expects to propose and finalize rules, giving itself more time. Although the SEC finalized its say-on-pay rules in time for last year’s proxy season and established a new whistle-blower program last summer, the regulator still has several provisions to go that will affect the following issues at companies. READ MORE...

From Whistleblower to RICO Claimant

Thomas Fox - FCPA Compliance and Ethics Blog — Fri, 06 Jan 2012 11:11:20 -0800

The holiday season is past and many of us have returned to work. However, if you are a Chief Compliance Officer (CCO) there is a gift that you may wish to give yourself, it is "The Whistleblower’s Handbook – A Step-by-Step Guide to Doing What’s Right and Protecting Yourself" authored by Stephen Martin Kohn, Executive Director of the National Whistleblowers Center. I do not suggest that CCO’s purchase this volume for their own protection, although the former Chief Executive Officer (CEO) of Olympus might have been able to use it before he was fired by the Olympus Board last October. No, I suggest that CCOs purchase this because many others in your company may well do so and it is the best single volume collection of all laws, rights and obligations related to whistle-blowing that I have come across.

I thought about Kohn’s book when I came across a couple of whistleblower related items last month. The first one was an article in the December 28, 2011 edition of the Wall Street Journal (WSJ), entitled "Internal BNY Mellon Documents Show Panic" by Jean Eaglesham and Michael Siconolfi. In the article they report on some of the emails and other documentary evidence that whistleblower Grant Wilson was able to obtain during the two year period that he was operating "as a government informant" while employed by Bank of New York Mellon (BNY). The WSJ obtained this evidence through an open-records request. Wilson was part of a group which brought a series of whistleblower lawsuits against BNY, which have led to several states, and the Manhattan US attorney, filing civil suits against BNY. Eaglesham and Siconolfi also reported that "the bank’s [BNY] foreign-exchange traders grew concerned about a leaker" and in an earlier WSJ article, entitled "Secret Informant Surfaces in BNY Currency Probe", reporter Carrick Mollenkamp stated "BNY Mellon sought to discover the insider’s identity and to fight the lawsuits." READ MORE...

Investigating a Compliance Failure

Tracy L. Coenen — Thu, 05 Jan 2012 10:40:45 -0800

How to determine the right mix of expertise for a fraud investigation.

It's every CFO's worst nightmare. Despite your best efforts, your company’s compliance program has failed. There are credible reports of fraud and corruption inside the company, and an initial analysis of the situation confirms a problem. An internal investigation is necessary to determine the magnitude of the fraud, the parties involved, and the company’s financial and reputational exposure under government regulations.

How should you proceed? These investigations are often high stakes, so it is important to do things the right way from the start. In-house counsel should be involved in any situation involving allegations or evidence of fraud. Once executives have sufficient reason to believe the allegations are credible, they should involve outside counsel as well. Executives' responsibilities don’t end there: they can help find the proper consultants to investigate the fraud, influence the fee schedule of the outside work, and keep the investigators informed. Most important, executives can see to it that employees cooperate with the investigators and provide access to all relevant data and documents. READ MORE...

Life Partners Sued by SEC

By MARK MAREMONT and LESLIE SCISM — Thu, 05 Jan 2012 12:46:21 -0800

The Securities and Exchange Commission sued Life Partners Holdings Inc. and three top executives, alleging a years-long disclosure and accounting fraud that involved misleading financial statements and backdated documents shown to auditors.

The agency also charged Chief Executive Brian D. Pardo and General Counsel R. Scott Peden with insider trading, alleging they sold shares at artificially inflated prices while knowing the company's profits were unsustainable. Mr. Pardo, the SEC alleges, sold stock worth $11.5 million between 2007 and 2009.

Life Partners, of Waco, Texas, is a major player in the secondary market for life insurance, in which investors buy the right to receive death benefits. The original policyholder gets a lump sum upfront, while the investors continue to pay premiums, betting they will eventually collect more than they spend.

Mr. Pardo, who also is chairman, said in a statement, "It is very disappointing that the SEC has chosen to pursue litigation over issues that we believe have no merit and financial presentation issues that we do not believe are material." He said the company intends to "vigorously defend ourselves against these meritless claims." READ MORE...

What to Put on Your Risk Radar Screen

Wed, 04 Jan 2012 14:00:47 -0800

Here’s a top 10 list of risk “hotspots” to worry about in 2012.

IT security, global expansion, and excess cash top the list of 10 risks companies should be particularly concerned about in 2012, according to the Corporate Executive Board (CEB).

The research firm comes up with a list of so-called risk hotspots every year, based on discussions with clients, surveys, and observations about what's going on in the corporate world. The CEB offers its tally as a starting point for senior executives to use with their boards and internal-audit teams to discuss how their company should do risk assessments in the coming year.

For the latest list, the first two items make intuitive sense. Companies have been on a long-term track to mitigate the risk of outside sources attacking their technology systems, as the means for carrying out such damage continue to proliferate. "Companies are trying very hard to eliminate vulnerabilities in their systems that may impact financial performance," says Kate Guerra, senior director of research at the CEB. READ MORE...

Overachieving Fraud Wolves in Sheeps Clothing

Jeffrey Horner, CFE, CRCMP — Tue, 03 Jan 2012 10:37:22 -0800

Targeting Top-Performing Employees Gaming the Bonus System

Follow this CFE consultant as he uncovers top collection reps at a business call center who inflated their performances for more money and job advancement. Lesson? Do not always follow the money.

Sometimes we find fraudulent activity occurring in the most unsuspecting places. What started out as a routine examination into a tip from an anonymous call-center employee who was concerned with the large number of suspicious credit card payments a few fellow employees were processing, turned out to be the discovery of a whole new area of call center fraud operating right under the noses of management, compliance, internal audit, quality assurance and even fraud committee members.

A call center environment can foster many credit card processing scams. The most popular is for call center agents to retain credit card account numbers, expiration dates and security codes for themselves or to sell to fraudsters. We also see this scam in restaurants and other retail industries. Fortunately, in this case, the employee who called the hotline supplied the locations and names of the suspicious employees and claimed that the number of payments they processed was far beyond the norm.

As an outside consultant, I first had to become familiar with the work of the business unit and the group in which the suspected employees worked. That unit handles inbound and outbound phone calls with customers who are past due on delinquent accounts. The collectors, who use defined call scripts, process payments through a number of payment options for consumers, including mailing payments, self-performed Internet payments, check by phone, automatic account debit and, naturally, credit card and debit card payments processed over the phone. The company provides exceptional training services for the employees and monitors their work so they comply with company policies, procedures and applicable federal, state and even some local statutes. An automated account management system documents all work, and the company records all phone calls. READ MORE...

Digital Currencies MoneyLaundering Bogeyman or Real Concern

The Fraud Examiner - By Jacob Parks, J.D. — Wed, 21 Dec 2011 14:29:00 -0800

Recently, there has been some rustling from lawmakers and others that indicates a serious money-laundering threat might be upon us:decentralized digital currencies.

In June of this year, U.S. senators Charles Schumer and Joe Manchin appealed to the Department of Justice to do something about what they perceived to be a major money laundering threat. They pointed to a website called Silk Road, where people could anonymously purchase illegal items, such as drugs. The site’s payment mechanism of choice? Bitcoins -- units of a peer-to-peer digital currency that enable people to make payments over the internet almost instantly and without going through a bank or government. Schumer and Manchin urged for the shutdown of the illicit site and identified Bitcoin as a vehicle for money laundering.

But what are digital currencies, and should you lose sleep over them? READ MORE...

Why and How to StressTest Done right stress testing helps companies imagine the worst and prepare accordingly

Nicolas Kunghehian — Tue, 20 Dec 2011 10:58:21 -0800

In recent years, stress testing has become more important, fueled by regulatory requirements and the weakened economic environment. Indeed, many companies are undertaking stress testing for more than just regulatory compliance; a growing number are integrating the process into business-planning and strategy-setting procedures. But stress testing has a long way to go before it becomes a fully embedded risk-management practice.

Stress testing is an important component of risk management. It defines a plausible scenario that could have important consequences for a company. Doing this exercise helps determine an adequate solution should the crisis scenario happen. Let us try to define one of the other benefits: a CFO is constantly under pressure to find new funding sources. To reach this goal, investors must be convinced of a company’s stability. Stress tests can be a very useful tool to restore or maintain confidence in a company. A CFO will never be keen to disclose too much information; however, presenting different outcomes of a stressed scenario will provide valuable transparency.

Imagine a company publishing various crisis scenarios (for example, default of a European country, an increase in oil prices, or movements in currency exchange rates) and their potential impact on its operations, finances, or both. Of course, there may be a negative outcome overall. But the CFO has the opportunity to prove that the company will survive and face relatively low losses. Investors invest only if they have enough clear information to assess the risk of an investment appropriately — and a stress test could tip the scale in the capital-seeking company’s favor.

Having a comprehensive stress-testing framework requires greater collaboration between the CFO and the business lines. Scenarios for stress testing are best developed with the participation of multiple teams. The objective of this collaboration is to generate scenarios that are both plausible and relevant. For example, before opening an office in a new country, a CFO needs the help of people who know the specifics of the area; that is, the evolution of salaries, the trend in real estate prices, and data on currency exchange rates. READ MORE...

Retailers must prepare for fraud this Christmas

Michael Norton, Managing Director of PayPoint.net — Mon, 19 Dec 2011 15:24:59 -0800

As the online retail industry continues to go from strength to strength it is expected that consumers will do more shopping than ever online this Christmas, with a study by the Centre for Retail Research forecasting a 17% increase in sales in the last six weeks of the year. Currently £1 in every £10 is thought to be spent through e-commerce, and this could grow further as mobile and social media commerce start to take off. However, are retailers ready to take advantage of the new opportunities available during the festive season?

Last year it was estimated that £67 million worth of fraud took place at Christmas, and despite measures being put in place by retailers to try to combat this, it is thought 2011’s figure will be just as high. According to the PayPoint.net study, ‘Gangsters’ Paradise or Shoppers’ Delight?’ the expected impact of e-commerce fraud on the UK economy means it will rise by 18%, from £165.2 million in 2011 to £195.3 million in 2015. Shopping on a mobile phone or a favourite social media site is the next big thing in e-commerce, but criminals are likely to capitalise on poor awareness of the risks by consumers and retailers alike. READ MORE...

Thousands to be stripped of Canadian citizenship in historic fraud sweep

Postmedia News — Thu, 15 Dec 2011 09:07:32 -0800

OTTAWA — The federal government is set to crack down on 4,700 more people believed to have obtained citizenship or permanent resident status illegally in what’s being dubbed the biggest citizenship fraud sweep in Canadian history.

Immigration Minister Jason Kenney is expected to make the announcement that “Canadian citizenship is not for sale” on Friday.

He will unveil the details in Montreal where Nizar Zakka — an immigration consultant suspected of fraud — was arrested in 2009. Zakka is suspected of providing would-be Lebanese immigrants with false evidence — indicating that they were living in Quebec when they were not — to support their cases for permanent residency. READ MORE...

Fraud alert Police dont say seasons thievings for nothing

dawn walton - globe and mail — Thu, 15 Dec 2011 09:11:30 -0800

This is the most wonderful time of the year – for fraudsters.

As Canadians go in-store and online to shop for their friends and family, they expose themselves in greater numbers, and through repeated purchases in chaotic environments, to identity theft.

“The busiest retail season of the year has already begun and with an increase in financial transaction comes an increase in opportunities for fraud artists,” according to the RCMP.

No wonder police call this “season’s thievings” and advise shoppers to be a Scrooge with their personal information.

The cost of fraud is stunning.

According to the Canadian Anti-Fraud Centre, fraud offences now cost the country between $10-billion and $30-billion a year, making it as profitable as the illegal drug trade. And almost 80 per cent of these offences are the work of organized crime, police say. According to the RCMP, debit card fraud rang in at $119-million last year, while credit card scams added up to almost $366-million. READ MORE...

3 of 4 Americans Would Blow Whistle on Wrongdoing Law Firms Survey Finds

Mark Hansen — Thu, 15 Dec 2011 09:20:30 -0800

Three out of four Americans say they would blow the whistle on wrongdoers in the workplace under the protections and incentives now being offered by the government, a new poll shows.

According to the poll, released Monday, 78 percent of those surveyed said they would report wrongdoing on the job as long as they could do so anonymously, without retaliation, and collect a monetary reward, Thomson Reuters reports.

The survey also found that 68 percent of those polled did not know the new whistle-blower program launched by the Securities and Exchange Commission four months ago even existed.

Under the program, tipsters who provide original and useful information about securities law violations can now earn up to 30 percent of the total penalty the SEC collects from a company. The new program, part of the Dodd-Frank financial regulatory law, allows whistle-blowers to remain anonymous. It also prohibits employers from retaliating against employees who report wrongdoing.

The telephone poll of 1,007 households was commissioned by the Labaton Sucharow law firm, which established a whistle-blower practice this summer.

The poll also found that more than one-third of those surveyed claimed to have firsthand knowledge of wrongdoing in the workplace. People with more education were more likely to become whistle-blowers, the poll showed, suggesting that more senior employees were privy to the kind of misconduct that could trigger a government enforcement action. READ MORE...

What to Put on Your Risk Radar Screen

Sarah Johnson — Tue, 13 Dec 2011 14:23:42 -0800

IT security, global expansion, and excess cash top the list of 10 risks companies should be particularly concerned about in 2012, according to the Corporate Executive Board (CEB).

As for expansion, setting up stakes in emerging markets — an increasingly common practice by U.S. companies — with new employees and new regulations obviously creates potential problematic areas, such as an increased likelihood of fraud prevention and internal controls falling apart between U.S. headquarters and far-flung operations. READ MORE...

FAIRs ten questions re appointment of toothless whistleblower watchdog for 7year term

FAIR — Mon, 12 Dec 2011 13:44:52 -0800

Mario Dion, the Prime Minister’s choice for Public Sector Integrity Commissioner will testify before a parliamentary committee on Tuesday. This will be almost the final step in installing a whistleblower watchdog who has demonstrated over the past year that he can be equally ineffective as his disgraced predecessor.

FAIR is calling for proper scrutiny of this appointment before any decisions are made by Parliament. There are many serious questions that must answered before any decision is made: here are 10 for starters.

1) Why did Prime Minister Harper fail to consult with opposition leaders before making his choice?

Besides being common courtesy in the appointment of an officer of Parliament, such consultation is required by the law that created this position (see subsection 39(1) of the Public Servants Disclosure Protection Act).

2) Why did Dion decide to apply for this job after saying it would be a conflict of interest to do so?

Mr. Dion told several people in a face-to-face meeting (including David Hutton of FAIR, Allan Cutler of Canadians for Accountability, and Duff Conacher of Democracy Watch) that he was not going to apply for the full-time Integrity Commissioner position because he did not want to have the conflict of interest while he was Interim Commissioner – of trying to please the Prime Minister and Cabinet so they would appoint him as full-time Commissioner. We agreed.

Why is this conflict of interest suddenly no longer an issue when Mr. Dion’s performance over the past year indeed seems designed to please the PM? READ MORE...

Does Canada Have a Problem with Occupational Fraud

By the Certified General Accountants Association of Canada — Tue, 06 Dec 2011 15:54:56 -0800

Many of us have at one time or another been curiously drawn to the subject of occupational fraud. Whether observed in our own work environments or exposed through broader media, we often find ourselves perplexed by the apparent ease with which an otherwise responsible organization can be financially violated by its own agents or employees. The simple fact of the matter of it is that we generally have confidence in the folks that work shoulder to shoulder in achieving the wellbeing of a collective venture. And that is received as a positive condition.

As history has shown us, there can however be the occasional breach or abuse of the confidence placed in people. That is not to say that all individuals are necessarily capable or willing to resort to occupational fraud; but rather that businesses need be mindful of the prospect of occupational fraud and of the relative unpredictability of the potential or eventual aggressor.

Recognizing that individual occupational frauds are more often than not dwarfed by larger more discernable frauds and scandals, The Certified General Accountants Association of Canada (CGA-Canada) considers it timely to direct some attention to the inherent opportunity for occupational fraud within the domestic environment. Moreover, it is conceivable that in the current economic landscape of slow growth and deleveraging, the propensity for occupational fraud may in fact intensify. READ MORE...

DoddFrank without the Dodd and the Frank

Sarah Johnson - CFO.com — Wed, 30 Nov 2011 16:18:53 -0800

Dodd and Frank: These names have been muttered under the breath of compliance officers on a frequent basis for over a year now, but the lawmakers won't be in a position of influential power when the many details of the Dodd-Frank Wall Street Reform and Consumer Protection Act continue to be ironed out. Sen. Christopher Dodd stepped away from Congress within six months of the 2010 law's passage, and now Rep. Barney Frank has just one year left in his term. Earlier this week, Frank announced he would not seek reelection in 2012.

The news comes as attempts to gut or reform the financial reform law are rampant. They range from the extreme (such as a complete rewind) to tweaks of certain provisions, quiet talks between lobbyists and regulators, and pleading letters (see the latest Chamber of Commerce's criticism of an SEC proposal).

Frank has scoffed at the notion that his departure could weaken the law. In a recent talk with reporters, he suggested that the ship to make any significant dent has long sailed. "Once [Dodd-Frank] is fully implemented -- I think it will be another year -- it is much harder for people to get rid of, because I think it will be popular," The New York Times quoted him as saying on Tuesday. [READ MORE...]

QA Pam Verick On International Fraud Awareness

Samuel Rubenfeld — Thu, 01 Dec 2011 15:09:21 -0800

This week is International Fraud Awareness Week. In this Q/A, Pam Verick, the director and solution leader of fraud risk management for Protiviti, discusses fraud, how Occupy Wall Street amplified the visibility of it and what the company is hearing from its clients about it. The conversation has been edited lightly for clarity.

Describe the prevalence of fraud in our financial system and our economy more broadly.

I think fraud and misconduct are serious issues that detract from the health and stability of our economy when you think of the importance of transparency of our system, and the viability of our markets here in the U.S. and abroad. The issue is, when you trust that markets are stable and that they are safe from issues of corruption and financial abuse, investors are more willing to take risk.

What, if anything, is the Occupy Wall Street movement doing to amplify the visibility of fraud in our economy?

I think they are contributing to fraud awareness, especially as it relates to transparency and corporate governance matters. Consider that their issues seem to be around making sure that trust is put back into the markets and corporate well-being. Another takeaway I’ve had is [they care about] accountability and when you consider transparency and accountability, it does raise issues of ethical behavior and the importance of corporate values.

When you consider International Fraud Awareness week, I think it’s been a great reason to talk to organizations about corruption and fraud, and what organizations are doing to deal with these issues.

It’s given us a great reason to talk to organizations about the programs they’re developing about fraud, misconduct and corruption. We’ve had the chance to talk to several organizations about what they’re doing with their finance teams to increase their detection capabilities, including the tools they’re using to increase awareness to help mitigate fraud risk. READ MORE...

Internal Auditor Chartered Accountant Sarbanes Oxley ACA

Networx (2001) Ltd — Thu, 01 Dec 2011 15:17:38 -0800

Internal Auditor / Chartered Accountant / Sarbanes Oxley / ACA
Peterlee
Salary range between £31,173 - £38,966

Our client represents the largest and most respected family of products and services in earth-moving industries across the world. Their products and services deliver superior quality and long term value, helping to accelerate the success of their customers worldwide.

They now have a brilliant opportunity for a Control Coordinator to join their Internal Audit function within the company. You will act as the Financial Risk Management Coordinator of the site, providing accounting control and procedures to ensure compliance with all Sarbanes Oxley, UK & US GAAP guidelines. Your main duties will be to perform internal control audits, as well as guaranteeing assets are protected and all procedures are documented. You will work closely with the Business Resource Manager maintain all site approval controls and provide sound knowledge and advice on Sarbanes Oxley procedures.

Their ideal candidate will be educated to degree level or equivalent. A Chartered accountant, with an ACA qualification, and experience in large firm audits, you need to also have excellent communication skills. Good computer literacy is a must, as well as the ability to work well within a team. Sarbanes Oxley knowledge would be advantageous.

Keywords:
Internal auditor / Sarbanes Oxley consultant / Regulatory reporting manager / QA leader / auditor / Operations auditor / Accountant / Sarbanes Oxley
Accountant / ACA / Chartered accountant / Financial risk management / Sarbanes Oxley Auditor / Financial assistant / Financial services Accountant / ACA Chartered accountant

Important Note:
After forwarding your CV for this position, you will receive an email from networx that requires action in order for us to submit your details. APPLY NOW or READ MORE

In tough economy employee theft climbs to epidemic proportions experts say

Laylan Copelin — Mon, 28 Nov 2011 10:14:28 -0800

Evidence against a young bookkeeper was in the photos she brought to work: her frequent Vegas trips, the $1,000 exotic puppy and $18,000 in house renovations.

She didn't need photographic proof of her sudden breast augmentation surgery.

All on a $20,000 annual salary.

Finally, her boss became suspicious when she bought a Mercedes — with cash.

"This woman did everything but come to work with a sign on her back saying, 'I'm stealing your money,'\u2009" said James Ratley, president and CEO of the Association of Certified Fraud Examiners, an Austin-based organization with more than 50,000 members worldwide.

Not every dishonest employee, of course, flaunts his or her clandestine wealth as much as the young bookkeeper. Ratley said fraud by employees is more widespread than employers realize.

It is difficult to gauge the losses, but a 2010 survey of fraud examiners estimates that businesses lose as much as 5 percent of their revenues to various forms of fraud by employees, from bookkeepers to CEOs. A 2010 survey by the National Retail Federation put employee fraud ahead of shoplifting as the primary cause for retailers' losses.

"Fraud has grown to epidemic proportions," Ratley said. "It is so pervasive, it can no longer be ignored." [READ MORE...]

Will South Africas secrecy bill become law

By Milton Nkosi - BBC News, Johannesburg — Mon, 28 Nov 2011 10:21:58 -0800

The demonstrations may be much smaller in South Africa, but the fury about a threat to national democracy seems as heated as that of the clamouring crowds in Egypt's Tahrir Square.

The anger follows the passing in Cape Town's parliament of the Protection of State Information Bill, because of its alleged threat to freedom of speech.

Uncharacteristically the parliamentary opposition united in its fight against the legislation proposed by the governing African National Congress, but it was passed by 229 votes to 107, with two abstentions.

In its current version, there are tough sentences of up to 25 years for anyone possessing classified government documents, with no defence of acting in the public interest.

Civil society organisations and all media houses are up in arms demanding that a "public interest" clause be included in what has been dubbed the "secrecy bill". They argue this would allow the media to uncover corruption.

Fortunately for those opposing the bill there is still some respite.

Parliamentary procedure requires the bill to be taken to the upper house of the legislature - the National Council of Provinces, previously known as the Senate.

Lobbying is already under way for it to be sent back to the lower house for the public interest clause to be inserted.

Even if it goes through the upper house, all is not lost.

There is still an opportunity for review as it can be challenged at the Constitutional Court, the highest court in the land - meaning it could be amended before becoming law. [READ MORE...]

Critics condemn new South African secrecy law

Alex Duval Smith - Cape Town — Wed, 23 Nov 2011 08:57:22 -0800

South African MPs yesterday passed a secrecy law that critics say harks back to apartheid legislation, criminalises investigative journalism and could be used to conceal corruption.

The rushed passage of the controversial Protection of Information Bill – despite a pledge two months ago that it would be put to broader consultation – raised questions about the possible political motivation behind it.

Black-clad demonstrators gathered outside parliament and two South African Nobel laureates criticised the pending legislation. The former Anglican archbishop Desmond Tutu said it was "insulting to all South Africans to be asked to stomach legislation that could be used to outlaw whistle-blowing and investigative journalism".

The Nobel prize-winning author Nadine Gord- imer said the bill was "totally against" freedom. The legislation allows any government agency to apply for the classification of information that is "valuable" to the state. However, the bill does not include a public interest clause and criminalises the possession and distribution of state secrets.

As a result, critics say journalists and whistle-blowers could face up to 25 years' imprisonment for breaches.

Amnesty International called the bill "fatally flawed" and Human Rights Watch said it "was a blow to freedom".

The ruling African National Congress said the new law – passed with a vote of 229 in favour and 107 against – is essential for deterring spies. The party said the bill was intended to replace outdated apartheid-era legislation and to "balance the presumption of secrecy with a presumption of openness".

However, the legislation comes at a time when the ANC's probity is being questioned by a robust civil society. READ ARTICLE

Finance and utility companies more likely to have women on boards

Shannon Walker — Tue, 22 Nov 2011 14:23:54 -0800

Shannon Walker, President of WhistleBlower Security: Women are most likely to be on charitable boards followed by finance and utility. Women are least represented on mining and gas boards. This article is interesting in itself, but the really interesting piece is the study referenced in the report by the Catalyst Group that found the more women that are on a board, the more likely a company is to engage in corporate philanthropy or social responsibility policies. This speaks volumes to the importance of creating diverse boards that include women in order to promote a higher quality of business environment and integrity within the workplace. READ MORE...

Assignment Indias Whistleblowers

BBC — Fri, 18 Nov 2011 16:07:25 -0800

Rupa Jha investigates how local-level campaigners against corruption in India face threats and violence - despite promises that the government will stamp out graft. She tells the stories of two whistleblowers in two different states who faced ferocious intimidation after they tried to challenge powerful individuals on the take. LISTEN NOW

ExOlympus Boss to Meet Japanese Police

Shannon Walker — Thu, 17 Nov 2011 11:20:41 -0800

Shannon Walker, President of WhistleBlower Security: Yet another huge corporate scandal – former Olympus President was fired when he questioned the Chair and two other executives regarding a couple of deals: READ MORE...

Government insiders doubtless prefer the lack of controls

Shannon Walker — Thu, 17 Nov 2011 12:14:37 -0800

Shannon Walker, President of WhistleBlower Security: After BC taxpayers footed the bill to the tune of $6 million dollars after two BC Liberals pleaded guilty in the BC Rail case, Auditor-General Doyle is investigating the policies or lack there of, of civil servants being supported by the Province in their legal battles. When the BC Rail case came to an end, I was incensed by the fact that this case had dragged on for years only ending with the guilty pleas and a $6 million dollar bill for the people of BC.

This is a prime example of where government practices need to be overhauled. These “special indemnities” which began during the NDP era to assist then-Premier Clark in his own legal circus, are an abusive, murky practice that needs to stop now. Very disappointing on so many levels that this practice has been allowed to continue. I hope Christy Clark’s government steps up and actually starts creating some best practice governance policies that could restore some faith in government. READ MORE...

SEC Reports Record Year for Fraud Enforcements Expects More in 2012

Sue Reisinger - Corporate Counsel — Thu, 17 Nov 2011 15:21:57 -0800

The Securities and Exchange Commission last week reported a record number of enforcement actions for the 2011 fiscal year, and this week released its first annual Whistleblower Program report [PDF], which suggests that record is sure to be broken next year as the tips pour in.

That's the prediction of Jordan Thomas, a former senior attorney at the SEC who played a leading role in drafting both the whistleblower provisions of the Dodd-Frank Act of 2010, as well as the rules to implement it that went into effect in August.

In the program's first seven weeks, the report said the SEC received 334 tips, a number that Thomas called "impressive." The report covers only this fiscal year, which ended September 30. READ MORE...

Fighting Fraud Is Still Personal

CFO.com - Sarah Johnson — Mon, 14 Nov 2011 11:56:28 -0800

Three ways to mitigate your risk of payments fraud that need a human touch.

It’s a fine line between legitimate payments and fraud. The possibility always exists that customers are not who or what they seem. Questioning an actual, loyal customer could, in some instances, hurt a company’s reputation and coffers more than the loss of a missing payment.

This dilemma is a daily one for Colleen Lindow, a senior director overseeing transaction risk at PayPal. Lindow says her biggest challenge is balancing customers’ experiences with mitigating the online-payment company’s risk of fraud. “It’s important that when customers try to pay that they can,” she said at the Association for Financial Professionals’s (AFP) annual conference in Boston earlier this week. If the risk-management processes and tools she uses backfire and a real customer is unable to use PayPal, she may get a call from senior managers asking what went wrong. [READ MORE...]

Forensic Accounting Fullday Seminar on 25November 2011 @ DomaineLes Pailles

Sunil Bahri - Kaizensox Consulting — Mon, 14 Nov 2011 14:11:44 -0800

Full-day seminar by:

Sunil Bahri, FCA, FCS, ACSI & SOX Certified, CEO of Kaizensox Consulting (Dubai/Vancouver)

Mayur Joshi, B.Com, CA, CFAP, CBFA, CFE, Principal consultant of Riskpro Consulting Pvt. Ltd. (India)

•Redefining the thought environment for managing fraud risk, fraud control and fraud investigation practices
•This is not a Witch Hunt! : Minimizing damage while carrying out internal investigation
•Fraud Investigation in virtual world without borders
•Internal Controls –Role and importance in forensic examination
•Forensic Audit –Investigating and evidence collection from documents
•Research on fraud –Global Corruption Trends
•Corporate Governance in Control Theory
•Case studies and panel discussions

Fees @ Rs 11,500 per participant (Tea breaks, Lunch & Course Materials included)
Special rate for groups of 3 or more and for participants not eligible for HRDC refund.

25November 2011 @ DomaineLes Pailles

READ MORE..full brochure

Get In Touch
Tel : 427 2190info@ispi-lhc.org
Fax : 427 8890www.ispi-lhc.org

Risk Management & Whistleblowing November 23 & 24 2011

KaizenSox Consulting — Mon, 14 Nov 2011 14:37:26 -0800

A two-day interactive workshop by Sunil Bahri, FCA, FCS, ACSI & SOX Certified, CEO of Kaizensox Consulting (Dubai / Vancouver)

Based on hands-on, practical approach with panel discussions, case studies and your own take-away action plan!!! Who should attend: Senior Executives and Management, Auditors, Accountants, Risk & Compliance Officers, Consultants

Date: Wednesday 23rd & Thursday 24th November 2011 Venue: Clos St Louis, Domaine Les Pailles. Fees: Rs 18,000 per participant (Lunch, Refreshments and Course Materials included) Special rate applies for Groups and for participants not eligible for HRDC refund. Early bird registration: deadline Friday 14 Oct 2011 REGISTER NOW / MORE INFO: 427 2190 427 8890 info@ispi-lhc.org. Visit our website www.ispi-lhc.org for the Course Outline, Programme & Registration Form.

About the ISPI
ISPI has been founded on a powerful vision of achieving sustainable performance through knowledge to create a better society and to improve the quality of life. The ISPI aims at creating national and regional capacity by servicing the Indian Ocean and African regions. We offer Capacity Building Programmes and Consultancy Services in all areas of human development, transformation of institutional set ups, governance and sustainability, regional economic integration and development.

Understanding Risk
Risk Management Activities
Assessing Risk
Responding to Risks
Resourcing Controls
Reaction Planning
Reporting and Monitoring
Reviewing and Evaluating the Framework

Understanding whistleblowing
Legal provisions
Role of Ombudsman
Whistleblower Protection and Fraud Detection
Impact of whistleblowing on the company
Application of whistleblowing
Entrench whistleblowing as part of good governance

Date: Wednesday 23rd & Thursday 24th November 2011
Venue: Clos St Louis, Domaine Les Pailles

Fees: Rs 18,000 per participant (Lunch, Refreshments and Course Materials included) Special rate applies for Groups and for participants not eligible for HRDC refund. Early bird registration: deadline Friday 14 Oct 2011 REGISTER NOW / MORE INFO: 427 2190 427 8890 info@ispi-lhc.org Visit our website www.ispi-lhc.org for the Course Outline, Programme & Registration Form.

READ MORE...full brochure

Driving Excellence in Corporate Governance through Strategic Change & Leadership

KaizenSox Consulting — Mon, 14 Nov 2011 14:52:23 -0800

MASTERCLASS for DIRECTORS
December 5 - 6, 2011 | Le Meridian Hotel Dubai | U.A.E

Why attend Master class?

Explosion of stakeholder aspirations
Issues emerging from nongovernance
Global cry for Board Room reforms
Increasing accountability for directors
Negative social impacts of busines
Deterioration of shareholder value
Changing standards of governance
Absense of a holistic approach

Who Should Attend?

Directors and aspiring directors
Family business owners
Strategic decision makers
Chief Executives & Managing Directors
Board level senior managers
Strategic decision makers
Secretaries to the Board
Corporate Governance Executives

READ FULL BROCHURE

Leadership Lessons Influential Women in Business

Business In Vancouver — Thu, 10 Nov 2011 09:54:26 -0800

Date: November 23, 2011
Location: Marriott Vancouver Pinnacle Downtown - 1128 West Hastings Street
Time: 9:00am - 1:30pm
Price: Subscriber $85 (includes lunch)
Non-subscribers $95 (includes lunch)

On November 23, Business in Vancouver and the Professional Women's Network Business will present the 3rd annual Leadership Lessons from Influential Women in Business. This half day forum will begin at 9am and consist of interactive panel discussions with some of BC's most influential business women; networking time and lunch.

Discussion moderators and panelists include:
Tracy Theemes
Cybele Negris
Frieda Granot
Elise Rees
Evaleen Jaager Roy
Wanda Costuros
Tracy McVicar
Barbara Rae
Cynthia Roney

[READ MORE...]

Why Increased Scrutiny May Be Good for Business

Shannon Walker — Wed, 09 Nov 2011 14:17:27 -0800

Shannon Walker, President of WhistleBlower Security writes: This is a good article by Theodore Roosevelt Malloch, a research professor at Yale University and the author of Doing Virtuous Business (Nelson 2011). It highlights the importance of a strong board with independent directors is so increasingly necessary these days. [READ MORE...]

Upcoming Scholarship Applications Event The US Taxpayers Against Fraud Education Fund

taf.org — Fri, 04 Nov 2011 11:31:15 -0700

The US TAXPAYERS AGAINST FRAUD EDUCATION FUND is presenting "Bootcamps" on the IRS and SEC Whistleblower Programs. The programs are November 15 and 16 at the Embassy Row Hotel in Washington D.C. Although the agendas are fairly technical, they are offering a limited number of scholarships (i.e. fee-waiver) for students who are interested in attending. A link to the application and the agendas can be found here: [READ MORE...]

Applications will be considered on a rolling basis and must be submitted by November 4, 2011. Please email your completed application responses to Cleveland Lawrence at clawrence@taf.org.

Course Ethical Decision Making Skills

Global Ethics University — Mon, 31 Oct 2011 15:36:42 -0700

Global Ethics University is a division of Character Training Inc. (CTI). CTI has been producing quality business ethics training products since 1999. It was founded by author and educator Mark S. Putnam to support company compliance initiatives with positive, character-connected training programs.What makes CTI different from other ethics-training providers is that it takes the word character seriously. All of CTI's materials have a character focus that is reflected in our slogan, Connecting Character and Compliance - Making Ethics Meaningful. That is our mission and our passion.

Mention this promo code: wbc10 and receive 10% off your next Global Ethics University course

Course No: ETH101

Instructor: Mark S. Putnam, M.Ed.

Description:
This is a foundational course that prepares employees for the various ethical dilemmas they face on the job from situational dilemmas to full-blown ethical crises.

Objective:

• Understand a working definition of business ethics and apply to everyday situations.
• Know the different kinds of workplace ethical dilemmas and identify their sources.
• Develop a problem-solving approach to ethics problems.
• Understand the role that the conscience plays in human character and moral decision-making.
• Know the keys and principles to become an ethically balanced person.
• Know how to approach and solve a situational ethical dilemma.
• Know how to solve a critical dilemma.
• Learn ethical tests and strategies to help solve problems.
• Understand the different kinds of rationalization that are used to justify bad behavior.
• Learn communication strategies to deal with an ethical crisis.

Required Reading: "Absolutes and Ethical Relativism in the Workplace" by Mark S. Putnam
"Ethical Balance" by Mark S. Putnam
"The Anatomy of an Ethical Decision" by Mark S. Putnam

Price: $49.00Length: 2 hr 0 min - Mention this promo code: wbc10 and receive 10% off your next Global Ethics University course

FBI Gangs turning to whitecollar crimes

MSNBC — Fri, 28 Oct 2011 15:57:14 -0700

WASHINGTON — The Federal Bureau of Investigation on Friday estimated there are some 1.4 million gang members in the United States and they are turning to white-collar crimes as more lucrative enterprises.

Gangs like the Bloods and the Crips are engaging in crimes such as identity theft, counterfeiting, selling stolen goods and even bank, credit card and mortgage fraud, said a new FBI gangs threat assessment.

"We've seen it, but we've seen them doing it even more now and we attribute to the fact that the likelihood of being caught is less, the sentences once you are caught are less, and the actual monetary gain is much higher," said Diedre Butler, a unit chief at the National Gang Intelligence Center.

In 2009, the FBI estimated there were 1 million gang members. It attributes some of the 40 percent increase since then to more comprehensive reporting by law enforcement agencies.

Agency officials said they were unable to determine exactly how many new gang members there were now since the last estimate, but that such membership was indeed on the rise.

Gangs are using social media such as Facebook and YouTube to recruit members and communicate, as well as posting photos of their lifestyle to present a tough image, the assessment said.

"It may stoke the curiosity of someone in the community and so that is kind of a recruitment tool because now people may see this video and think that's kind of sort of cool," said Calvin Shivers, a section chief in the FBI's gang unit. [READ MORE...]

Whistleblower Rules Give Companies Less Time to React

CFO.com - Sarah Johnson — Wed, 26 Oct 2011 15:49:06 -0700

A new SEC program shrinks the amount of time companies will want to spend on internal investigations.

A new whistle-blower program that went into effect earlier this month may pressure companies into accelerating internal investigations that are prompted by employee tips.

By sticking to a tighter time frame, companies could give regulators the impression that corporate officials — and not a whistle-blower — were on top of a potential problem from the beginning. That impression could help companies gain leniency with regulators and be looked upon favorably by the investing public. "It shows the [Securities and Exchange Commission] you take the allegations seriously, and it allows you to spin the allegations in a manner that is most positive for the company," says Lisa Noller, a partner at law firm Foley & Lardner.

The need for a deadline comes from the SEC's whistle-blower program, which awards cash bounties to witnesses of securities fraud. Critics of the rules have said they encourage employees to bypass their own compliance departments and go directly to the SEC with concerns. In fact, the commission will still consider a fraud informant as a whistle-blower if 120 days elapse between the time the informant reports a problem through internal means (such as to the audit committee or chief compliance officer) and the time the SEC gets wind of it from that source. [READ MORE...]

Brand Experience Agency ABT looks at internal communications

ABT — Tue, 25 Oct 2011 15:02:19 -0700

Leading brand experience agency ABT presents an interview with Marketing Manager, Howard Downer. He reveals that not everyone understands or appreciates the importance of internal communications. VIEW VIDEO

Shannon Walker Presents in Vancouver on October 25th 2011

Shannon Walker — Mon, 24 Oct 2011 09:38:18 -0700

October 24 & 25, 2011, Vancouver | 14th Communications Performance Measurement

Topic Brief

In order to facilitate internal communications continuous improvement, this session will discuss a number of methods that measure employee engagement, satisfaction and alignment with the organization’s vision, values and strategic goals. Read More...

Bio

Shannon Walker is President and CEO of WhistleBlower Security, a firm which offers confidential ethic hotline services. Read More...

Course Highlights

Understanding the measurement framework
Ensuring a successful communications audit
Using media relations ratings points
Measuring the impact of social media
Measuring stakeholder and employee communication strategies
Improving your change communication strategy
Coaching and assessing managers on their communication role

Read More...

Workshop

Approaches to Media Tracking and MeasurementA consistent approach to media is essential to ensure that the flow of information is open and organized in both directions, making media tracking and analysis, which highlights the effectiveness of your communications plans, media strategies and PR campaigns, essential. This session will look at how to use media tracking and analysis to fine-tune your plans and respond to emerging issues and crises.

Tracking media interaction

Tracking tools that assist this approach
A consistent approach to data collection
Beyond media tracking and analysis: building a library of media interaction and clippings that may be instantly retrieved

Participating Organizations

2Q Creations Corp. Best Buy Ltd. Blenz Coffee CA School of Business District of North Vancouver Hill & Knowlton MediaMiser Reputations Southern Arc Minerals TELUS Customer Solutions UBC College for Interdisciplinary Studies Vector Aerospace Corporation WhistleBlower Security WorkSafeBC

Event's Topics

Creating an Effective Communications Measurement Framework
Getting Value for Money
Measuring Internal Communications
Measuring the Impact of Social Media
Impact of Communications on Your Organization's Reputation
Measuring the Ability of Management to Communicate Effectively
Obtaining Buy-in From Senior Management
Developing a Results-Oriented Communications Audit
Practical measurement tools for communication & social media

Read More...

Can you afford not to have an ethics hotline?

AntiFraud Resources by ACFE

ACFE — Mon, 24 Oct 2011 11:19:17 -0700

Profile of a Fraudster (PowerPoint)
ACFE research helps identify common traits and behavioral red flags among those who perpetrate fraud. Presented in a short and insightful presentation for any audience.

Sign up as an Official Supporter of International Fraud Awareness Week, and download these ACFE resources to share with employees, colleagues, clients and the public. The following files are provided free-of-charge in an effort to promote fraud awareness and prevention. [READ MORE...]

This Week is Dedicated to Fraud Awareness Detection and Prevention

ACFE — Mon, 24 Oct 2011 11:26:35 -0700

This Week is Dedicated to Fraud Awareness, Detection and Prevention

Organizations around the world lose an estimated five percent of their annual revenues to fraud, according to a survey of fraud experts conducted by the Association of Certified Fraud Examiners (ACFE). It is against this backdrop that the ACFE urges organizations worldwide to participate in International Fraud Awareness Week, November 6-12, 2011 to help cast a spotlight on this urgent problem. [READ MORE...]

Legislators Oppose IRS Proposal To Make Banks Put Foreign Tax Law Above US Law

Daniel J. Mitchell, Contributor — Thu, 20 Oct 2011 11:49:33 -0700

Earlier this year, President Obama’s IRS proposed a regulation that would force banks in America to report any interest they pay to accounts owned by non-resident aliens (that’s the technical term for foreigners who don’t live in the U.S.).

What made this regulation so bizarre, however, is that Congress specifically has exempted these account from taxation for the rather obvious reason that they want to attract this mobile capital to the American economy. Indeed, Congress repeatedly has ratified this policy ever since it was first implemented 90 years ago.

So why, you may be asking, would the IRS propose such a regulation? After all, why impose a regulatory burden on a weakened banking sector when it has nothing to do with enforcing American tax law? [READ MORE...]

FOR IMMEDIATE RELEASE Merit Systems Protection Board Approves Stay for FDA Whistleblower

National Whistleblowers Center — Wed, 19 Oct 2011 09:34:09 -0700

FOR IMMEDIATE RELEASE

Merit Systems Protection Board Approves Stay for FDA Whistleblower
Relief Ordered for FDA "Reulatory Review Officer" Fired for Blowing the Whistle on Unsafe Breast Cance Detection Device

Washington, D.C. October 19, 2010. The Merit Systems Protection Board (MSPB) allowed a stay <http://capwiz.com/whistleblowers/utr/1/BPSZQQWBBE/EMOAQQWOFG/7469830326> requested by the U.S. Office of Special Counsel on behalf of a Food and Drug Administration (FDA) whistleblower, Paul T. Hardy. Under the provisions of the Whistleblower Protection Act, this stay should result in Hardy's immediate reinstatement into federal service after his managers at the FDA orchestrated his termination on October 9, 2011.

The Office of Special Counsel (OSC) requested a stay of Hardy's termination <http://capwiz.com/whistleblowers/utr/1/BPSZQQWBBE/NCPVQQWOFH/7469830326> on October 7, 2011 because it had "reasonable grounds to believe that Mr. Hardy" was subjected to retaliation by the FDA in "violation" of the Whistleblower Protection Act.

The OSC explained that Mr. Hardy's "disclosures raised issues related to exposing the general population to unwarranted radiation exposure and ineffective cancer screening devices." The OSC stated that Hardy's whistleblowing "evidenced a substantial and specific danger to public health and safety" and "it is appropriate to afford Mr. Hardy whistleblower protection so as to favor the disclosure and correction of improper acts by management officials of HHS/FDA."

Stephen M. Kohn, Executive Director of the National Whistleblowers Center and one of Mr. Hardy's attorneys, stated as follows: The Office of Special Counsel did the right thing. They stood up and demanded due process for Paul T. Hardy. The FDA's practice of firing whistleblowers who resist industry pressure to approve hazardous drugs and devices must stop. The OSC's request to stay these abusive practices is a critical first step in fixing the retaliatory culture that pervades upper management at the FDA. We hope that OSC will continue its investigation into the FDA and order relief for the other whistleblowers who lost their jobs after they exposed substantial and specific dangers to public health and safety. The National Whistleblowers Center is calling on the American public <http://capwiz.com/whistleblowers/utr/1/BPSZQQWBBE/HDZNQQWOFI/7469830326> to demand that the FDA and Public Health Service stop retaliating against whistleblowers.

National Whistleblowers Center
3238 P Street NW
Washington, D.C. 20007
http://www.whistleblowers.org

FOR MORE INFORMATION, CONTACT:
Lindsey M. Williams (202) 342-1903
lmw@whistleblowers.org

Links:
OSC Motion for Stay
MSPB Order Granting Stay
NWC Action Alert ***

And Now We Know Why Nobody Took Madoff Whistleblower Harry Markopolos Seriously

Julia La Roche — Tue, 18 Oct 2011 11:11:25 -0700

Fraud investigator Harry Markopolos, who was also the whistleblower in Bernie Madoff's infamous $65 billion ponzi scheme, has cried fraud on Bank of New York Mellon.

The thing to remember about Markopolos is that he tried in vain to prove that Madoff was a fraud, and nobody took him seriously.

His latest comments give a hint to that.

In a recent interview with King World News, he said the bank is in some serious trouble. [READ MORE...]

Seminar on Fraud Prevention November 11 2011 Tampa FL

Association of Certified Fraud Examiners — Tue, 18 Oct 2011 16:00:57 -0700

Virtually every entity suffers from fraud, though management might not know it. With fraud costing entities an estimated 5 percent of their annual revenues, organizations lacking proactive fraud prevention measures are the most at risk. This one-day, instructor-led course will show you why traditional internal controls can be ineffective in preventing many frauds and how to combat fraud more effectively and economically.

Discover what you can do to protect your company from fraud. Learn about management’s responsibilities for preventing fraud and effective internal controls to aid in this effort. This course will take you further into leading techniques to manage the risk of fraud and cut its ongoing cost for all types of entities. [READ MORE...]

Shannon Walker presents Measuring Internal Communications

Shannon Walker — Thu, 04 Aug 2011 11:25:35 -0700

October 24 & 25, 2011, Vancouver | 14th Communications Performance Measurement

Topic Brief

Bio

Shannon Walker is President and CEO of WhistleBlower Security, a firm which offers confidential ethic hotline services. Read More...

Course Highlights

Understanding the measurement framework
Ensuring a successful communications audit
Using media relations ratings points
Measuring the impact of social media
Measuring stakeholder and employee communication strategies
Improving your change communication strategy
Coaching and assessing managers on their communication role

Read More...

Workshop

Tracking media interaction

Tracking tools that assist this approach
A consistent approach to data collection
Beyond media tracking and analysis: building a library of media interaction and clippings that may be instantly retrieved

Participating Organizations

Event's Topics

Creating an Effective Communications Measurement Framework
Getting Value for Money
Measuring Internal Communications
Measuring the Impact of Social Media
Impact of Communications on Your Organization's Reputation
Measuring the Ability of Management to Communicate Effectively
Obtaining Buy-in From Senior Management
Developing a Results-Oriented Communications Audit
Practical measurement tools for communication & social media

Read More...

Can you afford not to have an ethics hotline?

Away with you Raj Rajaratnams insider trading

Business and management - Schumpeter — Mon, 17 Oct 2011 10:21:51 -0700

NOBODY likes a know-it-all. But that’s exactly what Raj Rajaratnam, the former boss of the hedge fund Galleon, was. He made it his business to know about corporate events before they happened, tapping his wide network of tipsters and coworkers for details, and then buying or selling short the stocks. In May he was found guilty of 14 counts of securities fraud and conspiracy. Today a judge sentenced him to 11 years in jail.

That is the longest sentence ever handed out for insider trading. Previously, the record was ten years—held by another Galleon employee, Zvi Goffer, and Hafiz Muhammad Zubair Naseem, a former Credit Suisse banker sentenced in 2008. Government prosecutors alleged that Mr Rajaratnam “is arguably the most egregious insider trader to face sentencing in a federal courthouse in the United States.” It’s the biggest insider-trading ring that regulators have ever uncovered, involving at least 20 people and $72m in gains and losses avoided.

The government was hoping to see Mr Rajaratnam go to jail for at least 20 years, but his team of well-paid defence lawyers fought fiercely to reduce the sentence he was handed, apparently to some success. They stressed that significant jail-time would be “tantamount to murder” for the 54-year-old Mr Rajaratnam, since he has advanced diabetes. They also said the generous cheques he wrote to charities in New York and his native Sri Lanka should be taken into account. The judge was sympathetic to these points, and factored them into his sentence—a lesson, perhaps, to anyone considering insider trading that they give away much of their gains. [READ MORE...]

Shannon Walker presents Measuring Internal Communications

Shannon Walker — Mon, 17 Oct 2011 15:51:23 -0700

October 24 & 25, 2011, Vancouver | 14th Communications Performance Measurement

Topic Brief

Bio

Shannon Walker is President and CEO of WhistleBlower Security, a firm which offers confidential ethic hotline services. Read More...

Course Highlights

Understanding the measurement framework
Ensuring a successful communications audit
Using media relations ratings points
Measuring the impact of social media
Measuring stakeholder and employee communication strategies
Improving your change communication strategy
Coaching and assessing managers on their communication role

Read More...

Workshop

Tracking media interaction

Tracking tools that assist this approach
A consistent approach to data collection
Beyond media tracking and analysis: building a library of media interaction and clippings that may be instantly retrieved

Participating Organizations

Event's Topics

Creating an Effective Communications Measurement Framework
Getting Value for Money
Measuring Internal Communications
Measuring the Impact of Social Media
Impact of Communications on Your Organization's Reputation
Measuring the Ability of Management to Communicate Effectively
Obtaining Buy-in From Senior Management
Developing a Results-Oriented Communications Audit
Practical measurement tools for communication & social media

Read More...

Can you afford not to have an ethics hotline?

Are We Just Going Through the Motions for Compliance

Dawn Lomer — Thu, 13 Oct 2011 09:05:02 -0700

Without a strong tone from the top, simple survival takes first priority in today’s tough economic climate

Getting companies to embrace ethics and compliance as a valuable addition to corporate best practices isn’t an easy task. Many owners of mid-sized and even larger companies see it as just another hoop to jump through, another unjustified expense.

But times are changing, and as more scandals and corresponding sanctions come to light, companies will be forced to take ethics and compliance seriously. At least that’s what Shannon Walker is counting on. As president of the Vancouver-based Whistleblower Security, a company that specializes in providing global ethics hotlines for companies, Walker sees the current ambivalence towards compliance as a sign of the times. It’s low on a company’s list of priorities, especially in Canada, she says.

A Matter of Priorities

In tough economic times, companies are focused more on staying in business than best practices. “People are thinking about survival, what happens in 2012, what happens with the Eurozone, what happens with the US,” says Walker.

She cites the lack of sanctions for companies that don’t have comprehensive compliance programs that include whistleblower policies as a barrier and sees a lot of business owners who simply make things look good on paper.

“And if there are any discussions about it, they can say ‘I’ve got a 1-800 line to my lawyer on the website’,” she says. “But to me that’s… not a comprehensive compliance program, it’s doing the very minimal to get around the regulations.”

For a company that sets up hotlines for multinationals in foreign countries, challenges are just part of doing business. There are language issues, difficulties with using local phone lines in rural areas and lack of education about telephone use. But the biggest challenge can be just getting companies to see that they need an ethics hotline in the first place.

Tone at the Top

In some companies it’s far down on their priority list, she says. “I don’t think it resonates with staff. If you don’t have tone at the top, it’s an uphill battle.”

Companies may go through the motions, she says, but it’s not enough. Education, training and encouragement are lacking. “They can sign up so they have their due diligence checklist sheet filled up, but they’re not utilizing the service,” says Walker. “They’re not promoting the service, and there’s no enforcement.”

Walker feels that companies will embrace ethics and compliance, but that it may take time, up to 10 years, in fact.

“I think it’s still in its infancy as a department and as a concept within our organizations. Over the next 7 to 10 years I hope people really do embrace it as part of best practices and it becomes a viable department,” she says.

“Five years ago when we started, it was so new,” says Walker. “Now every week there’s something new about whistleblowing. And with all the big scandals, it becomes more and more apparent how important it is, and especially with what’s going on in the Asia market,” she says, adding that Asia is going to be a huge business development opportunity for those in the business of compliance.

With China in the hot seat over recent fraud allegations at publicly traded companies, compliance is bound to be an important discussion point for anyone considering doing business with or in China in the near future. Closer to home, as news of corporate misconduct breaks on a weekly basis, it’s bound to get more attention here too.

This Article can be found at i-Sight Blog

Quebec exfamily minister charged with fraud

The Canadian Press - CBC — Wed, 12 Oct 2011 09:17:51 -0700

CBC.ca: A former family minister in Premier Jean Charest's Quebec cabinet has been slapped with three criminal charges in the latest ethics embarrassment to befall the government.

Tony Tomassi faces charges of fraud and breach of trust. They stem from accusations that he accepted material rewards from a company that had received government money.

Last year, he was forced to resign amid accusations that he had been using a credit card supplied to him by a private security firm — a firm that had received millions in government grants. [READ MORE...]

Boardroom Gender Diversity Sought by UK Regulators New Rules

Erik Larson - Business Week — Wed, 12 Oct 2011 09:28:37 -0700

Business Week: Oct. 11 (Bloomberg) -- Britain’s accounting regulator is changing reporting rules for companies listed on the country’s stock exchanges in a “flexible” effort to increase boardroom gender diversity without using legal requirements.

Amendments to the Financial Reporting Council’s corporate governance rules will require companies to report each year what steps have been taken to implement their boardroom diversity policies and explain failures to comply, the watchdog said today in a statement. The new provisions will apply to financial years beginning on Oct. 1, 2012. [READ MORE...]

Legislative failure hits war on corruption

Dylan Welch - Sydney Morning Herald — Wed, 12 Oct 2011 09:36:54 -0700

The Sydney Morning Herald: A new system to target federal public service corruption is being hampered by the failure of the government to create whistleblower legislation, despite universal recognition that the system is ineffective and needs reform.

The Commonwealth Ombudsman, Allan Asher, said the absence of legislation made it difficult to plan ahead.

''Everybody had expected that by now there would be a bill around to be talking about - there's a bit of a hole at the table,'' Mr Asher said. [READ MORE...]

Corporate governance the boards role

Business Option - By FLOR G. TARRIELA — Thu, 06 Oct 2011 11:17:23 -0700

MANILA, Philippines — I finally attended the 5-day Professional Directors Program (PDP) of the Institute of Corporate Directors. Among my classmates were retired military officers (Gen. Ramon Farolan, Diosdado Domingo and Cardozo Luna of Apslai, Romeo Lustestica), government officials (SSS Commissioner Malonzo Ibarra, DAR USEC Tony Parungao), and big business (Solomon Hermosura of Ayala, Jasmine Oporto of Aboitiz Equity, Jose Ejercito of Unilever Korea, Rey Bacarro of Ascent Associates) among others. Discussions were even livelier as former SEC Chairman Fe Barin was our classmate.

What are some principles of corporate governance? These are independence, fairness, accountability, transparency, ethics long term sustainability, social responsibility.

What is the Role of the Board? [READ MORE...]

When Your Compliance Program Fails

Tracy L. Coenen - CFO.com — Thu, 06 Oct 2011 16:07:57 -0700

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 MORE...]

Scam victim upset over inattention by credit union

Kathy Tomlinson, CBC News — Wed, 05 Oct 2011 10:40:55 -0700

A young B.C. woman says an oversight by tellers at Canada's largest credit union helped scammers steal $5,000 from her.

Amanda Peacock, 20, was fresh out of college this summer and looking for a job when she fell victim to a widespread hoax, known as the "secret shopper scam."

"I lost all of my money … to some scam artist that's probably spending it on bad things," said Peacock. "It is the worst feeling to be robbed like that."

Peacock responded to a job ad on Craigslist and was "hired" by a company calling itself Canpro Market Development, which claimed to be a market research company from St. John's, N.L. The RCMP calls the company "bogus."

A young B.C. woman says an oversight by tellers at Canada's largest credit union helped scammers steal $5,000 from her.

Amanda Peacock, 20, was fresh out of college this summer and looking for a job when she fell victim to a widespread hoax, known as the "secret shopper scam."

"I lost all of my money … to some scam artist that's probably spending it on bad things," said Peacock. "It is the worst feeling to be robbed like that."

Protect your Employees

Even After SarbanesOxley US Whistleblowers Face Dilemma

Greg Flakus | Houston — Tue, 04 Oct 2011 10:49:04 -0700

Ten years ago corporate America was in turmoil, wracked by financial scandals at companies like Enron and WorldCom that drastically eroded public confidence in U.S. commerce. Congress reacted by passing the Sarbanes-Oxley Act, a law that forced change in corporate accounting practices and imposed stiff penalties on company officials who retaliate against whistleblowers.

But according to Gordon Massie, who blew the whistle over wrongdoing at multinational insurance conglomerate American International Group (AIG), corporate situations are complicated and even legal experts do not always agree on what constitutes fraud. [READ MORE...]

No More Executive Bonuses!

HENRY MINTZBERG — Tue, 04 Oct 2011 15:47:44 -0700

The problem isn't that they are poorly designed. The problem is that they exist.

These days, it seems, there is no shortage of recommendations for fixing the way bonuses are paid to executives at big public companies. Well, I have my own recommendation: Scrap the whole thing. Don't pay any bonuses. Nothing.

This may sound extreme. But when you look at the way the compensation game is played—and the assumptions that are made by those who want to reform it—you can come to no other conclusion. The system simply can't be fixed. Executive bonuses—especially in the form of stock and option grants—represent the most prominent form of legal corruption that has been undermining our large corporations and bringing down the global economy. Get rid of them and we will all be better off for it.

The failings of the current system—and the executives who live by it—are painfully obvious. Although these executives like to think of themselves as leaders, when it comes to their pay practices, many of them haven't been demonstrating leadership at all. Instead they've been acting like gamblers—except that the games they play are hopelessly rigged in their favor.

First, they play with other people's money—the stockholders', not to mention the livelihoods of their employees and the sustainability of their institutions. [READ MORE...]

Corporate Social Responsibility Needs New Dimensions

Guy de Fontgalland — Mon, 03 Oct 2011 15:51:11 -0700

The FINANCIAL -- Bill Gates, Microsoft ’s Guru, and Warren Buffet, a multi-billionaire, combined to create the world’s largest private fund of over 150 billion USD to aid much needed social reconstruction across some 100 countries through projects ranging from cancer research to clean water, from libraries to clinics for the poor.

In India, the Tata Group led the way in providing housing for their 2.5 million employees, hospitals, schools and temples. The Indian who peddled a bicycle distributing washing powder in two-rupee sachets to those who could not afford to buy bigger packets and went on to build a fortune in detergents, gifted 25 million USD to establish Nirma University in Ahmedabad. In Georgia, the quiet billionaire philanthropist Bidzina Ivanishvili actively promotes multiple projects in aid of social and economic development. From Victoria’s Secret in the United States to John Keels in Sri Lanka, there is now a certain momentum in accelerating the gift of giving and sharing across thousands of corporations. CSR, the acronym for Corporate Social Responsibility is founded on the principle that people at large are the ultimate stakeholders of any business and that profits could be shared with them. [READ MORE...]

Ethics Helpline - Get a Quote

Why it pays to have a Nervous Nelly on your staff

susan pinker - Globe and Mail — Mon, 03 Oct 2011 16:05:36 -0700

Oswald Gruebel, who recently resigned as chief executive of Swiss banking giant UBS, was the latest casualty in a string of outrageous trading scandals at European banks. “I am responsible for everything that happens at the bank, but if you ask me whether I feel guilty, I would say no,” Mr. Gruebel said after it was discovered that a 31-year-old UBS employee allegedly cost the bank $2.3-billion (U.S.) in rogue trades over the past three years. This follows on the tail of French trader Jérôme Kerviel, who must repay the $6.8-billion he stole from Société Générale in 2008; and earlier rogue traders, Nick Leeson and John Rusnak, who racked up losses to U.K. banks in the hundreds of millions. These young bucks were slapped with prison terms, as the UBS trader may well be. But the question remains: How do bogus trades of this magnitude remain undetected for so long? [READ MORE...]

High Tide From Gadhafi Denials To Fueling Violence

Samuel Rubenfeld — Mon, 03 Oct 2011 16:12:51 -0700

A roundup of corruption-related news from Dow Jones and other sources.

Bribery:

Royal Dutch Shell entered into contracts with militant gangs in Nigeria that led to exacerbating violence there, and paid the Nigerian military to put down protests of its business in the country, court documents cited by the watchdog group Platform allege. The company disputes the report, defended its human rights record and questioned the evidence of report. (Guardian, Guardian)

A court in southern Poland has delayed until Nov. 16 a trial in which some former employees of Royal Philips Electronics NV are among defendants accused of bribing hospital directors. (Dow Jones Newswires)

Welcome to the fourth quarter of 2011. The FCPA Blog and FCPAProfessor each have enforcement reviews for the third quarter.

Tom Fox started a series of posts about the Transparency International Guidance on anti-bribery due diligence for mergers and acquisitions. Thebriberyact.com looks at how the SFO’s tough talk on “ethical investing” can affect the venture capital and private equity industries.

What is the role of the regional office in the SEC’s FCPA unit? (Law360 sub req) [READ MORE...]

Protect your company and your employees with an anonymous whistleblower helpline

SEC finds apparent failures at credit rating agencies

BBC — Fri, 30 Sep 2011 11:18:38 -0700

The Securities and Exchange Commission (SEC) has discovered "apparent failures" at 10 credit rating agencies.

It said it was concerned that the agencies - including Standard & Poor's (S&P) and Moody's - were not making timely and accurate disclosures or managing conflicts of interest. The SEC said it expected the agencies to "address the concerns". Credit rating agencies have been criticised for their role in the financial crisis that started in 2007. This is because a root cause of the crisis was the bad US mortgage debt that was resold around the world, debt that was given top credit ratings by the agencies. The agencies were accused of having conflicts of interest, because they were paid by the banks that sold the debt. [READ MORE...]

Isn't it time for your organization to implement an Ethics Hotline?

China tech stocks dive on threat of US fraud probe

BBC News - China — Fri, 30 Sep 2011 13:44:26 -0700

Chinese internet stocks have dived in New York trading after the US Justice Department said it was considering launching a fraud investigation.

The news was disclosed by Robert Khuzami, director of enforcement at the US financial services regulator. Youku, which models itself on web video firm Youtube, was among the hardest hit, falling 18%. Chinese search engine firm Baidu fell 9%, rival portal site Sohu lost 5.3%, and messaging firm Sina dipped 9.5%. The fraud concerns have arisen after accounting irregularities emerged at a number of Chinese firms whose shares are traded in the US. "There are parts of the justice department that are actively engaged in this area," said Mr Khuzami, when asked by the Reuters news agency whether criminal cases were being prepared. He also confirmed that other federal prosecutors are involved in the investigation, but did not identify them, nor which Chinese companies and auditors are being looked into. [READ MORE...]

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Bill Seeks to Ease SarbanesOxley for Small Firms

Angus Loten — Thu, 29 Sep 2011 10:47:00 -0700

Shannon Walker, WhistleBlower Security, blogs: A good step forward in attempting to support smaller firms by defraying some of the onerous costs dictated by SOX. Although SOX has introduced much needed vigilance in the public markets, for smaller companies, it is a huge barrier to growth. Hopefully, this bill will move forward.

Wall Street Journal: In a bid to lower barriers to capital for fast-growth companies, House legislation unveiled last week would allow small businesses to opt out of costly internal-control measures under the Sarbanes-Oxley Act for up to 10 years after going public. READ MORE...

Private Bank Compliance Executive for Core Compliance New York NY

Sarbanes Oxley Compliance Professionals Association (SOXCPA) — Thu, 29 Sep 2011 11:04:04 -0700

Sarbanes Oxley Compliance Professionals Association (SOXCPA), blogs: Client is a top-tier old-line private bank and diversified financial services firm. The company seeks an experienced Senior Compliance Manager for Core Compliance functions.

The position is very diversified and covers many responsibilities within the Compliance Department.

The Compliance Executive will support the Chief Compliance Officer, advise the firm’s lines of business as to compliance with applicable laws and regulations, and monitor business activity and employee conduct to identify potential violation of laws, rules, regulations, policies, procedures and industry standards.
READ MORE

Ethics watchdog sees potential conflict in MacKays vacation venue

Jane Taber — Thu, 29 Sep 2011 15:37:23 -0700

The Globe and Mail: The Ethics Commissioner says Peter MacKay could be in contravention of the conflict of interest code after spending part of his vacation at a fishing camp owned by the chairman of a Crown corporation.

Mary Dawson told an all-party Commons committee Thursday morning there "could be some contraventions” after she was directly asked by Newfoundland and Labrador Liberal MP Scott Andrews about the Defence Minister’s vacation venue. READ MORE...

Charest hints Quebec corruption inquiry could happen after all

Montreal� The Canadian Press — Wed, 28 Sep 2011 14:50:15 -0700

After two years of brushing off the idea of an inquiry into corruption in Quebec, Premier Jean Charest hinted Wednesday that there might be one after all. The premier has repeatedly resisted calls for an inquiry into ties between the Mafia and other crime groups, the construction industry, crooked civil servants, and political parties. But Mr. Charest informed the legislature Wednesday that he will consider a proposal by the province’s anti-collusion watchdog. That proposal from Jacques Duchesneau is for a two-phase inquiry: the first part would be held behind closed doors, where witnesses would testify about cases of corruption.

The second step – to be held in public – would hear witnesses propose solutions to the problem. Mr. Duchesneau says the inquiry should be run by three judges selected by the legislature. He says that approach is based on a common practice in Australia. [READ MORE...]

Observations on the Evolving Role of the Auditor

Center for Audit Quality — Wed, 28 Sep 2011 14:58:30 -0700

Summary of Stakeholder Discussions

The issues are complex and difficult to resolve in isolation. The "what, whys, and hows" related to changing the role of the auditor has to be considered within the context of the overall financial reporting system, including the important roles of the audit committee (which oversees a company’s financial reporting and the auditor) and company management (which has primary responsibility for financial reporting). Regulatory frameworks and oversight schemes for financial reporting and public company auditors are also key elements of that context.

The Center for Audit Quality (CAQ) and the public company auditing profession support responsible changes to the auditor’s reporting model and the role of the auditor. Accordingly, the CAQ is facilitating robust discussion on the issue by all stakeholders—including those who contribute to the financial reporting process and those who use financial reports. [READ MORE...]

Deloitte Touche sued for $76bn in mortgage fraud case

BBC News — Tue, 27 Sep 2011 11:02:53 -0700

Giant accounting and consulting firm Deloitte Touche Tohmatsu has been accused of failing to detect fraud during audits of a mortgage firm which failed during the US housing crash...READ MORE...

American Whistleblower Tour Starts Today

Hannah Johnson — Tue, 27 Sep 2011 11:12:19 -0700

GAP’s American Whistleblower Tour: Essential Voices for Democracy starts today at the University of Nebraska-Lincoln. The tour is aimed at educating the public − particularly our country's incoming workforce − about the phenomenon of whistleblowing. READ MORE...

Google denies cooking search results

BBC News — Mon, 26 Sep 2011 15:27:32 -0700

Google's executive chairman has denied that the company fixes its search results to promote its own websites and services.

Eric Schmidt told a congressional hearing in Washington: "May I simply say that I can assure you we're not cooking anything." The Senate Judiciary subcommittee on anti-trust is looking at whether Google abuses its market position. The US Federal Trade Commission is also investigating the same issue. The website search giant faces a further continuing investigation by the European Commission. 'Extraordinary advantage' [READ MORE...]

Duchesneau calls for closeddoor inquiry into Quebec corruption

bertrand marotte, MONTREAL� From Monday's Globe and Mail — Mon, 26 Sep 2011 15:54:07 -0700

The head of Quebec’s anti-collusion squad says an interim, closed-door inquiry would be an ideal way to address mounting public concern over alleged corruption and Mafia infiltration in the construction industry.

“I am still in favour of a [public] commission of inquiry,” Jacques Duchesneau said. But moving quickly to set up an inquiry behind closed doors might be the way to go, he said.

“Do we need to head in the direction of a public inquiry right away? No. I believe there is a middle way between the two – a commission of inquiry that could be headed by three judges who would hear behind closed doors what people have to say.[” READ MORE...]

Isn't it time for your organization to implement an Ethics Hotline?

The Importance of Workplace Ethics Training

Global Ethics University — Fri, 23 Sep 2011 15:55:19 -0700

Workplace Ethics

As far as workplace ethics goes, employers must do their part to make ethical expectations clear and trust the employee to deliver. Sometimes ethics training works and sometimes ethics training doesn't. Work place ethics shouldn't be a guessing game if the employer has truly done all he or she can do to set employees up for ethical success. There should not be a disconnect between the work ethics that employer has and the work ethic of the employee. Understand that one's ethic is his or her system of moral standards or principles that may or may not agree with the company's professional work ethics standards. Despite the differences, promoting professional work ethics requires the employer to do everything in his or power to set up employees for success.

In the context of ethics in the work place employers lead the employees to ethical success by requiring them to read the ethics manual, attend a training session, and sign a document swearing to uphold the rules. With that done, employers sit back and rely on the integrity, understanding, and self-discipline of each employee. This is where many ethics in workplace programs fall short. They demand the highest standards of self-discipline possible yet do little to promote them in the long run. [READ MORE...]

SECs Office Of The Whistleblower Begins Processing Tips What Companies Should Do Now

Orrick.com — Thu, 22 Sep 2011 10:23:29 -0700

Sean McKessy, Chief of the SEC's Office of the Whistleblower, and Mark Cahn, General Counsel for the SEC, recently outlined the Office of the Whistleblower's activities and priorities in public remarks. According to agency officials, as many as 100 tips per day are coming in from whistleblowers and their attorneys. This is not yet a dramatic increase since the implementation of the regulations, but SEC officials note that the quality of the complaints has improved significantly. The SEC will use its discretion as to whether to notify a company that an inquiry is the result of a whistleblower complaint or generated otherwise.

McKessy explained that the Office of the Whistleblower has now posted a list of successful enforcement actions on its website for which whistleblowers may be eligible for a bounty. Thus, whistleblowers who have provided tips to the SEC since the passage of the Dodd-Frank Act in July, 2010 can review the posted actions on the Office's website and begin claiming awards. There are 170 posted actions on the website so far, against both individuals and companies, with monetary sanctions ranging from just over the million dollar threshold for claiming an award into the hundreds of millions of dollars. McKessy anticipates that most of his Office's resources will be devoted to the award claims process. READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

South Sudans President Salva Kiir to fight corruption

BBC News Africa — Thu, 22 Sep 2011 11:46:03 -0700

Newly independent South Sudan has announced a series of measures to combat corruption.

President Salva Kiir detailed "five critical steps" in an open letter. Land sales will be reviewed, public contracts subject to new laws and officials will be expected to publish their assets and earnings. The announcement comes ahead of a meeting with US President Barack Obama at the UN and follows local and foreign pressure to tackle the problem. South Sudan only became independent in July, but its leaders ran a semi-autonomous region with a large budget for six years before that. President Kiir said cases where money has apparently been stolen will be investigated, and the results made public.

He specifically mentioned a high profile scandal involving sorghum, a local staple food. Senior advisers from other African countries will be appointed to key institutions, and the anti-corruption commission will be strengthened, the president said. [READ MORE...]

Isn't it time for your organization to implement an Ethics Hotline?

Understanding the SarbanesOxley Act of 2002 and SarbanesOxley Act Compliance for your Company

Global Ethics University — Wed, 21 Sep 2011 11:41:08 -0700

Sarbanes-Oxley act compliance can be somewhat confusing. To help you understand Sarbanes-Oxley and business a little better, you need to understand a little history about it. The U.S. federal Sarbanes-Oxley Act was created to protect investors by improving the accuracy and reliability of corporate disclosures. The act covers issues such as establishing a public company accounting oversight board, auditor independence, corporate responsibility and enhanced financial disclosure. It is officially called the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOX or SarbOx and was signed into law on July 30, 2002 by President George W. Bush. It was designed to review the dated legislative audit requirements, and is considered the most significant change to United States securities laws since the New Deal in the 1930's. READ MORE...

Poker Site Actually a Ponzi Scheme

Shannon Walker — Tue, 20 Sep 2011 14:02:47 -0700

Shannon Walker - President of WhistleBlower Security writes: Poker Site Actually a Ponzi Scheme
Full Tilt poker has been slammed with a federal indictment accusing it of operating a complex money laundering ponzi scheme that saw over $300 million transferred from unsuspecting players/clients into the bank accounts of the Board, including several famous poker players. Another example of greed and bravado gone crazy. READ MORE...

More workers willing to blow the whistle on their employer

Eve Tahmincioglu — Mon, 19 Sep 2011 09:46:21 -0700

Employees are increasingly willing these days to blow the whistle when they see fraud, corruption and general unlawful behavior at their employers.

Since 2005, there’s been a spike in whistleblower cases filed with the federal government, according to the Department of Labor’s Occupational Safety and Health Administration, or OSHA. And one of the biggest labor law firms in the country, representing employers, has experienced such a big increase in worker snitching that it has created a special whistleblower practice to handle the extra workload.

“Any uptick is a good sign,” said Geoffrey Rapp, the Harold A. Anderson Professor of Law and Values at the University of Toledo’s College of Law, about an increase in whistleblower charges. “The goal here is to get information about fraud before it becomes so serious, as in the collapse of [Bernard] Madoff and Enron, where the whole company falls apart, or the economy falls apart.” READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

UBS rogue trader Loss estimate raised to $23bn

Robert Peston — Mon, 19 Sep 2011 11:26:12 -0700

The bank also said the alleged activity by trader Kweku Adoboli was uncovered after UBS began making inquiries.

That prompted Mr Adoboli to admit the losses on Wednesday, UBS said. The trader was charged with fraud and false accounting at a London court on Friday.

The bank's statement comes as UBS boss Oswald Gruebel insisted he would not resign over the incident.

"I'm responsible for everything that happens at the bank," Mr Gruebel told Swiss Sunday newspaper, der Sonntag. "if you ask me whether I feel guilty, then I would say no."

'Fictitious' hedges

Mr Adoboli has been remanded in custody until a committal hearing on 22 September. READ MORE...

BofA Guilty of Violating SOX Whistleblower Protection Provision

Reese Darragh — Fri, 16 Sep 2011 13:12:12 -0700

Shannon Walker - President of WhistleBlower Security writes: Finally, the SEC is working to protect the whistleblower. Hopefully, this is a trend to truly start enforcing the essence behind Sarbanes-Oxley whistleblower protection act.

Compliance Week: Bank Of America was ordered to reinstate a former employee and fined $930,000 for violating the whistleblower protection provision of the Sarbanes-Oxley Act. The Department of Labor's Occupational Safety and Health Administration (OSHA) said the bank was found guilty of wrongfully terminating the employee shortly after BofA acquired the troubled Countrywide mortgage company.

Isn't it time for your organization to implement an Ethics Hotline?

SGX to toughen corporate governance rules

the Sun Daily — Thu, 15 Sep 2011 10:00:34 -0700

SINGAPORE (Sept 14, 2011): Singapore Exchange (SGX) said it is bringing in tougher corporate governance rules at the end of September, requiring companies to disclose more information about their internal controls and legal representatives.

The new rules, which follow a public consultation in late 2009, come as investors grow increasingly suspicious about the accounting practices of foreign-based firms.

Companies which have a legal representative, a common practice among China-based firms, will have to disclose the name of that person and the risks relating to their appointment including how much authority is concentrated in their hands.

There are around 150 Chinese firms listed on SGX, a small number of which have become the subject of accounting scandals. READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

Shannon Walker presents Measuring Internal Communications

Shannon Walker — Thu, 15 Sep 2011 13:59:52 -0700

October 24 & 25, 2011, Vancouver | 14th Communications Performance Measurement

Topic Brief

Bio

Shannon Walker is President and CEO of WhistleBlower Security, a firm which offers confidential ethic hotline services. Read More...

Course Highlights

Understanding the measurement framework
Ensuring a successful communications audit
Using media relations ratings points
Measuring the impact of social media
Measuring stakeholder and employee communication strategies
Improving your change communication strategy
Coaching and assessing managers on their communication role

Read More...

Workshop

Tracking media interaction

Tracking tools that assist this approach
A consistent approach to data collection
Beyond media tracking and analysis: building a library of media interaction and clippings that may be instantly retrieved

Participating Organizations

Event's Topics

Creating an Effective Communications Measurement Framework
Getting Value for Money
Measuring Internal Communications
Measuring the Impact of Social Media
Impact of Communications on Your Organization's Reputation
Measuring the Ability of Management to Communicate Effectively
Obtaining Buy-in From Senior Management
Developing a Results-Oriented Communications Audit
Practical measurement tools for communication & social media

Read More...

Can you afford not to have an ethics hotline?

SinoForest Executives to Face Direct Hit From Regulator in Fraud Probe

By Sean B. Pasternak and Doug Alexander — Wed, 14 Sep 2011 15:23:24 -0700

Shannon Walker, WhistleBlower Security Blogs: OSC comes out swinging – vast improvement from investigations past, but is it time to truly consider a single national regulator? Let’s watch what unfolds with Sino.

bloomberg.com: Sino-Forest Corp. (TRE) agreed to extend a trading ban on its shares imposed by a Canadian securities regulator that’s been criticized for being too slow to clamp down on corporate fraud. READ MORE...

Creating a Culture of Compliance

Kimberly Blanton — Tue, 13 Sep 2011 10:19:48 -0700

Shannon Walker, WhistleBlower Security Blogs: A good article that speaks to the imperative nature of creating a culture of compliance that extends from the both the Board of Directors and CEO/CFO throughout the entire organization. While the vastly overused nomenclature “tone from the top” seems tired, the essence of creating, communicating and emulating those standards of ethics and compliance are key to an organization truly embracing and conducting itself in this manner.

CFO.com writes: Cell-phone markets in Central America and Southeast Asia were booming early in the decade, and Alcatel SA paid dearly to get in on the action, in more ways than one.

The Paris telecommunications giant doled out $8 million in bribes to "consultants" (including a well-connected perfume distributor in Honduras) to gain access to key government officials awarding lucrative contracts in four countries. When its actions came to light, subsequent prosecution under the Foreign Corrupt Practices Act (FCPA) led to fines estimated to exceed $130 million. READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

Deloitte Squeezed by SEC Chinese Regulators

William Pentland, Contributor — Tue, 13 Sep 2011 11:48:07 -0700

The global accounting powerhouse, Deloitte, is sitting between a bullet and a target in a global battle over the future of free enterprise. In May, Deloitte China received a subpoena from the U.S. Securities and Exchange Commission demanding records related to possible accounting fraud at the Hong Kong-based Chinese financial software company, Longtop Financial Technologies. READ MORE...

Ten most overlooked security threats for small businesses

Claudiu Popa — Mon, 12 Sep 2011 10:59:42 -0700

Shannon Walker, WhistleBlower Security blogs: This is a good article for any small business owner. Running a business can be a whirlwind of managing issues, people, tasks, facilities and what gets lost is the small details that could prove destructive or even fatal if not attended to. Read this article to refresh yourself in the minutiae of security that need to be managed properly in order to fully protect your organization.

The Globe and Mail: A quick Google search for security threats that plague small businesses turns up a vast amount of results ranging from such banalities as hackers to the most outlandish of exaggerations about brand monitoring and diverted funds. To be sure, small businesses are prone to the same weaknesses and vulnerabilities as larger enterprises, but their smaller size, scope and focus are as much of an advantage as a problem. READ MORE...

Ottawa unveils new tip line in immigration fraud crackdown

The Canadian Press — Fri, 09 Sep 2011 16:09:13 -0700

Shannon Walker, WhistleBlower Security Blogs: The federal government has embraced one of the most effective methods of discovering fraud – implementing an anonymous tips hotline. Whether the issue be immigration fraud, financial fraud, workplace safety, an anonymous hotline is the first tool to implement when considering a risk mitigation strategy within your organization. Hopefully the government will embrace this tool in a multitude of other arenas under their authority.

The Globe and Mail: The federal government has set up a new tip line where people can report suspected cases of citizenship fraud. Immigration Minister Jason Kenney is declaring that “Canadian citizenship is not for sale” and he's encouraging people to use the tip line to report suspected cases of citizenship fraud. READ MORE...

WhistleBlower Launches Incident Reporting Management System in Russian

Shannon Walker — Wed, 07 Sep 2011 14:01:23 -0700

Whistleblower Security is pleased to announce it has launched our Incident Reporting Management System in Russian. Now, all clients who have Russian speaking employees, vendors, contractors, will be able to direct them to a fully translated reporting VIEW NOW

This is part of WhistleBlower’s ongoing global strategy to ensure accessibility and comprehensive service deliverables. Over the next month, we will making many more exciting announcements as we diversify and augment our product offerings. Stay tuned.

Is Water on Your Risk Horizon

Jeffrey Fulgham — Wed, 07 Sep 2011 14:38:50 -0700

Shannon Walker, WhistleBlower Security, Blogs: Is Water on Your Risk Horizon? A novel question, especially for a company located in a rainforest in Canada. But because of our vast water supplies, many of us in Canada are acutely aware of the growing requirements worldwide for a resource that we on the West Coast have taken for granted. Those in mining and manufacturing where water requirements are vast, need to take stock of their long-term mitigation and strategic management of alternative sources or locations of facilities. This article highlights while there are droughts throughout the world currently, by 2030 water will be an all-important operational consideration for corporations.

CFO.com: Is your business prepared for a water-scarce future? Recent water-related events — from extreme droughts across the southwestern United States to flooding in central China — provide vivid examples of the potential impacts of water on people, businesses, and local infrastructure. READ MORE...

SF Giants payroll manager accused of embezzlement

Rachel Gordon, Chronicle Staff Writer — Fri, 02 Sep 2011 14:45:10 -0700

Shannon Walker, President of WhistleBlower Security blogs: Classic example of employee fraud hitting the Big Time.

San Francisco Chronicle: SAN FRANCISCO -- Federal agents have arrested a San Francisco Giants payroll manager on suspicion of embezzling more than $1.5 million from team accounts.

Robin O'Connor, 41, faces federal felony charges of wire fraud and fraud in connection with a computer. The FBI stepped in at the request of team officials: READ MORE...

The Need for Balance How Powerful ChairmanCEOs Put Shareholder Value at Risk

Nathaniel Parish Flannery, Contributor — Wed, 31 Aug 2011 16:20:21 -0700

Shannon Walker, President of WhistleBlower Security blogs: The need to separate powers from CEO & Chairman – very evident in the UK, now starting to happen in the US.

Forbes writes: According to Paul Hodgson, a corporate governance expert and Senior Research Associate at GMI, “while splitting the roles of chairman and CEO is getting a lot more common in the US than even in recent years, it is important to remember that an executive chairman cannot be considered independent and is more likely to be aligned with management rather than shareholders.” In the U.S., many companies have separated the roles of chairman and CEO, but have not taken the additional step of appointing an indpendent chairman. According to data from GMI, only 25% of all major U.S. companies have appointed an independent chairman. In the UK, by contrast, where is has been virtually mandatory since the governance revolutions in the early 1990s, chairman are required to be independent and, as such, it is the norm. READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

Saskatchewan whistleblower law to take effect

CBC News — Tue, 30 Aug 2011 11:25:05 -0700

Saskatchewan's new whistleblower protection law comes into force this week. The Public Interest Disclosure Act will spell out where provincial employees should go if they suspect wrongdoing in their workplace.

Public Service Commission Minister June Draude said workers need a safe place to go with their concerns, rather than leaking problems to the media or political opposition.

"I want them to be able to go immediately and not have to think they have to stand in front of a camera or in front of anybody else and make any kind of a scene other than saying, 'There's something wrong in the workplace and I want it looked at.'"

Draude said the law will provide each ministry with a designated person to go to in the event of a complaint and eventually an independent officer will oversee it all.

The law brings Saskatchewan in line with similar whistleblower frameworks in Manitoba, Ontario and Nova Scotia.

"We're working hard to make sure that people feel that working for us in government - or in government period - is a good place to be and they are protected," said Draude.

The law, which does not allow workers to take their concerns to the media or to opposition MLAs, comes into force on Thursday.

A worker was fired last year for allegedly taking his concerns to an oppostion politician rather than the government. READ MORE...

Isn't it time for your organization to implement a third party Ethics Hotline?

Whistleblower Rules Give Companies Less Time to React

Sarah Johnson — Mon, 29 Aug 2011 12:18:14 -0700

Shannon Walker, President of WhistleBlower Security blogs: Companies need to foster an environment where compliance is celebrated rather than punished. A paradigm shift is necessary in modern business in order to create a culture of ethics and supportive business practices.

CFO.com writes: A new whistle-blower program that went into effect earlier this month may pressure companies into accelerating internal investigations that are prompted by employee tips. By sticking to a tighter time frame, companies could give regulators the impression that corporate officials — and not a whistle-blower — were on top of a potential problem from the beginning. That impression could help companies gain leniency with regulators and be looked upon favorably by the investing public. "It shows the [Securities and Exchange Commission] you take the allegations seriously, and it allows you to spin the allegations in a manner that is most positive for the company," says Lisa Noller, a partner at law firm Foley & Lardner. READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

The Global Effect on Governance

Theodore Roosevelt Malloch — Fri, 26 Aug 2011 14:16:50 -0700

Shannon Walker, President of WhistleBlower Security blogs:

The Global Effect on Governance
This is a really interesting article by Theodore Roosevelt Malloch, a research professor at Yale Univeristy. He writes on the global movement towards higher levels of governance standards and the effect this could potentially have on US corporations. As a result of the process of globalization, recent trends have spread. These include an increased emphasis on shareholder value and corporate responsibility, a growing perception of the need for independent directors and committees, and the need for better disclosure of relevant financial information. Accountability and risk management are part of the reason governance has become such a concern around the world. As the writer states, CFOs need to be vigilant about the constant shifting and new demands brought by corporate governance in the United States and abroad. This is a trend going in only one direction. Ignore it at your own peril.

CFO.com writes: Why CFOs need to pay attention to boardroom pressures occurring abroad. In recent years, a plethora of laws, rules, and cases has made companies and their senior executives, especially CFOs, more accountable for the manner in which they manage their organizations. The spread of higher standards for corporate governance can be seen worldwide, from the passage of Dodd-Frank legislation in the United States to promulgation of the Cadbury Report and similar guidance in the United Kingdom. READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

Webtech Wireless joins the WhistleBlower Client Group

Shannon Walker — Thu, 25 Aug 2011 13:27:31 -0700

Shannon Walker - President of WhistleBlower Security Ltd., is pleased to welcome Webtech Wireless as a new WhistleBlower client – WebTech Wireless develops, manufactures and delivers proven GPS vehicle tracking and telematic solutions to large and small scale commercial fleets and consumer vehicles around the world. Learn more about their products and services at www.webtechwireless.com

Protect your reputation, your assets and your employees by introducing a simple tool.

Get Started with WhistleBlower Security

Committed to Fraud Prevention Compliance Committees the new corporate police

Tracy L. Coenen — Wed, 24 Aug 2011 10:50:01 -0700

Shannon Walker, President of WhistleBlower Security blogs: Committed to Fraud Prevention – Compliance Committees – the new corporate police

There has not been a marked decrease in the instance or cost of corporate fraud since SOX became law. Certainly, improvements to internal controls over financial reporting are good, but the small reductions in fraud risk and actual fraud did not justify the high cost to many companies. It is clear to those with experience preventing and investigating fraud that the "good companies" were going to be good without burdensome regulations. And the "bad companies" would remain bad no matter how much time and money was spent regulating them. With that said, many companies are turning to Compliance Committees to help manage the ongoing challenge of fraud prevention and compliance management and strategy development. But again, it is only as good as the processes built around it.

CFO.com: Do a Web search for corporate compliance committees, and you'll get hundreds of thousands of results. As compliance issues move front and center thanks to the new U.K. Bribery Act and a renewed focus on the Foreign Corrupt Practices Act (FCPA), compliance committees have become a hot new topic.

Because legislators and regulators in the United States and abroad are paying more attention to bribery and corruption, companies have been forced to reevaluate their compliance efforts and improve them on the fly. In the past, compliance committees have been most prevalent in the health-care industry, but now companies in other industries are creating them as well. READ MORE...

Online Banking Fraud Who Pays

Tue, 23 Aug 2011 16:03:14 -0700

Shannon Walker, President of WhistleBlower Security blogs: Online banking fraud is now targeting financial executives to gain access to corporate accounts – the big question is who is responsible, the bank or the company. Learn how to protect your company and make sure you revisit your banking agreements to ensure you have protection.

CFO.com: In the movie "The Town," actor Ben Affleck dons an impressive array of disguises as he holds up banks, employing everything from goblin masks to nun habits. When it comes to draining corporate bank accounts, though, most thieves are masquerading in a more muted way: as finance executives.

While it is hard to know exactly how many accounts have been compromised, a growing number of lawsuits between small businesses and their banks reveal that the problem is on the rise. Village View Escrow, for one, recently sued Professional Business Bank for allowing more than $465,000 to be hacked out of its account in March 2010. In general, hackers get a company's banking information through emailing corporate officers with infected attachments, or convincing-looking requests for confidential information from the Internal Revenue Service or electronic payments association NACHA, and then make multiple transfers out of the account before anyone realizes what's happening. READ MORE...

Most Likely to Commit Fraud Finance Executives

Marie Leone — Mon, 22 Aug 2011 14:25:45 -0700

Shannon Walker, President of WhistleBlower Security blogs: In a new survey by KPMG, it states that men who work as senior level executives in the finance department are the most likely to commit fraud. Further, this year’s study found an increase in cases in which fraudsters exploited weak internal controls. The instances of that happening rose from 49% in the 2007 analysis to 74% in 2011. KPMG reasons that the dreary economic climate may be partially to blame, as budget tightening forced some companies to cut costs related to upkeep and monitoring of internal-control processes.

Detecting fraud now takes longer, up from an average 2.9 years from inception to detection in 2007 to 3.4 years in the 2011 analysis. Nevertheless, red flags — an event or set of circumstances that portends fraud risk — were up in 2011, with 56% of the cases preceded by some kind of harbinger, compared with 45% in 2007. But shockingly, just 6% of initial red flags were acted on in the 2011 study, compared with 24% in the previous analysis.

CFO.com: A lot of bad apples work for the corporate finance department, but the number is shrinking, says a new study from KPMG. The report, released this month, says the “typical” corporate fraudster is a senior finance executive, and that of the employees who commit fraud, 32% of them work in corporate finance, the highest percentage of any corporate department. Four years ago, 36% of fraudsters worked in corporate finance. READ MORE...

The Risks of Retaliation Employee retaliation claims are on the rise Should companies be worried

Marielle Segarra — Fri, 19 Aug 2011 14:19:54 -0700

Shannon Walker, President of WhistleBlower Security blogs: Over the past 10 years, employee retaliation charges have skyrocketed: charges filed with the Equal Employment Opportunity Commission (EEOC) increased nearly 70% from 2000 to 2010, from 21,600 to just over 36,000. With this in mind, companies should understand the definition of retaliation, explain it to their employees, and review their insurance coverage if they have a policy against retaliation. This article addresses what to do if you experience these types of claims and how to prevent them from happening in the future.

CFO Publishing LLC writes: As if companies weren't facing enough risks these days, there's a new one to add to the list: retaliation claims. Over the past 10 years, employee retaliation charges have skyrocketed: charges filed with the Equal Employment Opportunity Commission (EEOC) increased nearly 70% from 2000 to 2010, from 21,600 to just over 36,000. It's not surprising, says Matthew C. Moschella, a partner at Sherin and Lodgen. "In this economy, where there are more terminations. . .and less severance pay, employees are looking for some financial remuneration when they leave the workplace involuntarily," he says. "And the categories of people who can bring those claims, as well as the categories of conduct that courts find retaliatory, are expanding." READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

Clawback policies are on the rise for large companies

Thu, 18 Aug 2011 09:49:25 -0700

Shannon Walker, President of WhistleBlower Security blogs: Clawback policies are on the rise for large companies in the US growing from 14% in 2006 to over 82% in 2011 having introduced some sort of clawback policy. These clawback policies state that compensation may be recouped if earnings were misstated. While the SEC has still to introduce its own rule regarding clawbacks, it does pose a complicated set of questions for companies, as executives could lose their compensation even though they had nothing to do with the errors.

Among the questions that have to be answered: Who will be subject to clawbacks? Should only perpetrators of the error have to give the money back, or should their supervisors have to do so as well?

CFO Publishing LLC.: Under the Dodd-Frank Act, all listed companies will eventually be required to institute a mechanism for recouping executive pay that had been granted under misstated earnings. But such clawback policies have already been on the rise among large companies (see chart below). Just over 84% of Fortune 100 companies now have a clawback policy, according to a report released last week by Equilar, an executive-compensation research firm. Only 17.6% of this group had a clawback policy in 2006. READ MORE...

Isn't it time for your organization to implement an Ethics Hotline?

Human trafficking in our own backyard

Sarah Douziech — Wed, 17 Aug 2011 10:32:08 -0700

Shannon Walker, President of WhistleBlower Security writes: Those of us who live in Canada, with our strong human rights and immigration polices, often naively believe that these more global human rights issues don’t actually occur here. Human trafficking occurs throughout Canada. An incident of extreme human trafficking abuse was even recently discovered in the neighborhood where I live and work. People need access to protection, and more importantly, if people see things that look suspicious, they need to be able to come forward and let someone in authority know.

FAIR: When Ana and Lily were recruited for work in Canada, they thought they were leaving behind life in the Philippines to make their dreams come true."I had a good life there, but I gave up everything to pursue success and a better life here" Lily, 35, says.

In addition to families and friends, Ana, 28, left behind a serious boyfriend while Lily gave up a secure job she'd held for 13 years in a luxury hotel in Manila, all for the promise of good-paying jobs in an Alberta resort that supposedly awaited.

READ MORE...

Ethics Hotline Info

National Institutes of Health Drops ConflictofInterest Disclosures for Universities

AllGov.com — Wed, 17 Aug 2011 16:01:31 -0700

Shannon Walker, President of WhistleBlower Security blogs: One year after conflict of interest disclosures are required by universities receiving research grants, the Obama administration is trying to do away with this important and transparent piece of legislation.

A year after the National Institutes of Health (NIH) announced a new requirement for universities and medical schools to put up websites disclosing any financial arrangements between corporations and NIH-funded researchers, the Obama administration is quietly trying to gut the plan.

In May 2010, the Department of Health and Human Services (overseer of the NIH) proposed new rules after Congress and the media exposed NIH grant recipients who had failed to tell their universities or medical schools about payments from companies that may have influenced their government-funded research. The regulations called for schools to publish any potential conflicts of interest on websites, in an effort to “underscore our commitment to fostering transparency, accountability, and public trust,” declared federal health officials. READ MORE...

Isn't it time to implement an Ethics Hotline?

SEC Whistleblower Rules Go Into Effect Today

National Whistleblowers Center — Fri, 12 Aug 2011 11:37:28 -0700

FOR IMMEDIATE RELEASE

SEC Whistleblower Rules Go Into Effect Today

Calling All Whistleblowers: Reward Eligibility Clock Starts Rolling Today in 170 Cases

Washington, D.C. August 12, 2011. Today, the Security and Exchange Commission's (SEC) Final Rules implementing the whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act go into effect. The SEC has simultaneously launched a new Office of the Whistleblower website today. The website is a major resource for the public and whistleblowers. You can access the website at this link: http://www.sec.gov/whistleblower and you may review the 170 cases that are now eligible for an award at this link: http://www.sec.gov/about/offices/owb/owb-awards.shtml

One of the most important sections of the new SEC Whistleblower website is the "Claim an Award" section, which lists 170 SEC actions that are covered under the Dodd-Frank Act. Whistleblowers have ninety (90) calendar days to apply for an award by submitting a completed form to the Office of the Whistleblower. The National Whistleblowers Center strongly encourages whistleblowers to check out this page so they do not miss their opportunity to apply for a financial reward.

Lindsey M. Williams, Director of Advocacy and Development for the National Whistleblowers Center, issued the following statement:

We are pleased that the SEC has launched the Office Of Whistleblower website. It will go a long way in detecting and deterring corporate fraud. The SEC Final Rules encourage internal reporting, but also protect an employee who has no faith in a company's internal compliance system and wants to report the fraud directly to the SEC.

Corporate fraud hurts businesses, consumers, and taxpayers. Employees must be encouraged and protected to come forward with credible information of fraud to the SEC or to an internal compliance system. The SEC's new whistleblower award rules are designed to do just that.

Anyone interested in claiming a whistleblower award should immediately check the "Claim an Award" section of the SEC whistleblower website. If an employee misses the 90-calendar day deadline for submitting a form for an award they will be out of luck.

The National Whistleblowers Center (NWC) sister organization the National Whistleblower Legal Defense and Education may be able to help whistleblowers looking for helping reporting fraud to the SEC find an attorney through the confidential Attorney Referral Service.

READ MORE...

Fraud Illegal Behaviour Conflict of Interest

Shannon Walker — Thu, 11 Aug 2011 13:34:15 -0700

Can you afford not to have an Ethics Hotline?

Managing risk means managing multiple variables from numerous sources. Building a comprehensive system to manage disparate pieces of information in one centralized location is key to your GRC program. WhistleBlower Security can manage your information, on a global basis, and ensure you have access to all of it in an intuitive based and real time system. This feature sheet will provide you with some further information (PDF)

WhistleBlower Security provides you with the key for unprecendented control and accountability for your organization.

More than 90% of fraud costs the victim organization

WhistleBlower Security — Wed, 10 Aug 2011 12:02:29 -0700

Implementing a third-party ethics hotline to protect your organization from harm may seem like a drastic measure. Why pay an annual fee to protect your organization from fraud that may not even exist? Especially when the code of conduct you’ve asked every employee to sign includes a piece on reporting workplace issues to the internal audit department?

READ MORE...

What SarbanesOxley Changes Will Mean to You

Kim Ann Zimmermann, ITTechNewsDaily Contributor — Tue, 09 Aug 2011 11:20:06 -0700

The Sarbanes-Oxley Act (SOX), which was implemented to tighten corporate governance in the wake of the Enron scandal, is undergoing some changes that will mean more work for the IT department, which acts as the gatekeeper of all documents and processes.

Companies that provide payroll processing, benefits administration, claims processing and other services to public companies may be asked to provide their customers with a copy of their SSAE 16 assessment report. This has implications for the IT departments of companies that use these services as well as those which provide them to publicly traded firms.

“Your company may not be publicly traded, but if your company’s services could impact the financial statements of one of your SOX-affected customers in any way, then your company’s internal controls impact that customer’s controls,” said Amanda Finch, director of strategic alliances for Austin, Texas-based Journyx, a developer of timesheet software.

The requirements are set to take place beginning July 1 and Finch said there are steps that IT departments need to take to prepare:

Review your service contracts to ensure that the system description is complete and accurate; Review your existing controls and activities to ensure they are adequate and operating effectively; Ensure your ability to provide evidence for each control activity to your auditor; and Develop a plan for communicating the new standards (and restrictions on report use) to your customer-facing teams.

A key component of the changes is that the CEO must sign a document attesting to the strength of the internal controls, which largely falls on the IT department. “When the CEO has to sign something in blood, it gets their attention,” she said.

“The law is extremely taxing on budgets and resources, with the onslaught of new procedures and documentary change laws adding roughly 10 percent more cost and 20 percent more manpower,” said Scott McCarthy, CIO for Greenspoon Marder, a Fort Lauderdale, Fla.-based business law firm. “That’s on the conservative end, because in some cases, the laws may force companies to upgrade or replace some of their current technology. However, the technology hasn’t caught up with the requirements.”

He said the law firm has a consultant whose sole job is to try to break into the law firm’s systems, which can cost $20,000 to $50,000 per test, depending on the complexity.

While not part of the upcoming changes, SOX restricts how certain documents are shared and stored. For example, as a law firm working with lending institutions, the laws restrict the type of information that can be used in the subject line of an email between the firm and the bank, McCarthy said. “Of course, we train our staff on proper procedure, but to ensure compliance, we must put in place a fail-safe mechanism. In that case, it’s relatively easy to reprogram a system to catch a loan number, which is typically well-defined and consistent in format, but catching an address with an infinite number of possibilities is another story. Technology is trying to catch up, but the large lag time is forcing IT professionals to come up with creative, yet solid solutions to an infinite number of challenges.”

Jerry Norton, a partner with Candela Solutions, a Madison, Wis.-based CPA firm that specializes in corporate governance, said that companies should undergo a periodic risk assessment to ensure that all areas, including IT, are in compliance.

There are advantages to assess risks beyond just Sarbanes-Oxley to include all types of systems and documents that are subject to compliance, such as HIPAA and credit card PCI-DSS standards. Using this integrated approach will reduce costs. “This will vary by industry, but all companies need to identify the systems that are critical and which contain sensitive information that is subject to regulatory requirements,” he said.

Once high-risk areas are identified, it is important to build out controls to address those risks. “In many cases, it is a matter of refining and cleaning up an existing control,” Norton said. The next step in the process is a self-assessment by management.

Companies need to be sure that the controls are both designed and implemented effectively. “As an example related to data backups, the design must include all required information and then you must verify that the backups are working correctly and that the data is securely stored.”

Jon Groetzinger, visiting professor of law-international business at Case Western Reserve University School of Law, said IT departments need to be especially diligent of ensuring that all changes to systems are fully documented.

“All change orders that come through that might affect the financials should be validated by an officer of the company,” he said.

Read More...

Can you afford not to have an Ethics Hotline?

New Partner Alliance Global Ethics University & WhistleBlower Security

Mark S. Putnam, President Global Ethics University — Tue, 09 Aug 2011 13:37:30 -0700

Mention this promo code: wbc10 and receive 10% off your next Global Ethics University course

Global Ethics University is an ethics & compliance training firm that offers a full range of ethics training products including online courses, out-of-the-box curriculum kits, on-site training, and consulting services.

"Connecting Character and Compliance" is the philosophy of Global Ethics University because we believe that an ethical organization is made up of people who show good moral judgment, have high standards, and a solid understanding of the issues. An organization is only as ethical as the people in it. By supporting and training people, the organization can truly move forward with a strong commitment to an ethical corporate culture.

GEU training courses complement ethics hotline services by providing a critical training role that offers long-term benefits. Online programs are easily customizable, affordable, and are offer per-user or unlimited a low flat annual fee. Call today and see how Global Ethics University can be your training partner.

As New Whistleblower Rules Kick In

Karen M. Kroll — Thu, 04 Aug 2011 08:49:30 -0700

Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act --- increasing the protection for whistleblowers -- amends the Securities and Exchange Act of 1934 by allowing the Securities and Exchange Commission to offer awards to individuals providing original information about a violation of federal securities regulations. Next Friday, on Aug. 12, these whistleblower provisions go into effect.

Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act --- increasing the protection for whistleblowers -- amends the Securities and Exchange Act of 1934 by allowing the Securities and Exchange Commission to offer awards to individuals providing original information about a violation of federal securities regulations. Next Friday, on Aug. 12, 2011 these whistleblower provisions go into effect.

For that individual to receive the award, the information submitted must lead to the successful enforcement of an SEC action resulting in monetary sanctions of more than $1 million. The award then would equal 10% to 30% of the sanctions, with SEC determining the amount based on, among other factors, the significance of the information provided.

One of the most contentious issues within the provision has been how it allows employees who believe they've seen wrongdoing to report directly to the authorities, without going through internal channels first, says Hal Garyn, vice president of North American services with the Institute of Internal Auditors. The IIA doesn't have an official position on the provision, because it falls outside the discipline of internal auditing, he says. But his own view is that "you want to leave corporate governance as much as possible within the organization." While a few dramatic cases of wrongdoing capture headlines, many internal whistleblower programs never make the news because they work effectively and quietly, he adds.

But part of the theory behind the provision is that it should "put more cops on the street," says Geoffrey Rapp, professor of law at the University of Toledo College of Law. The scandals surrounding Ponzi-schemer Bernard Madoff and, others like him were "a huge egg on the face of the SEC," he says. The commission wants more people to come forward, and then to persist if there is some corporate backlash. "With the bounty out there," he says, "it may not affect the decision to blow the whistle, but may affect the decision to stick with it."

Superseding Company Efforts?

Supporters of the provision say it provides needed protection to whistleblowers, who may be subjected to retaliation for speaking up. Were internal reporting to be required, some might be forced to come forward with their allegations to the wrongdoers themselves. Opponents say that the provision encourages whistleblowers to bypass internal compliance programs, often established by companies at great cost.

"Our concern is this: we have an internal system that's in place and that's meant to identify and address problems as quickly as possible," says Tom Deas, vice president and treasurer with $3 billion chemical company, FMC Corp. in Philadelphia. FMC has implemented a number of procedures to facilitate whistle blowing, such as an anonymous tip line and a pledge that management won't retaliate, he says. "Now comes a new system that's competing, and competing with a big monetary award."

Investors also have concerns about the provision, says James Allen, head of capital markets policy with the CFA Institute. While the Institute supports exposing any problems or irregularities, it wants the internal processes used. "The whole point of creating whistleblower programs is to protect shareholder value," James says. The original proposal created an incentive for whistleblowers to "go for a home run instead of trying to stop some corruption from occurring."

Giving Company Efforts More Kick?

While the concerns that many businesses express about the whistleblower provision are perfectly valid, according to Prof. Rapp -- "Companies have spent a lot of money and hired talented people to run these programs," he notes -- the legal expert points out that the SEC didn't ignore those concerns.

The SEC's final rule states, in fact, that one factor that may increase a whistleblower's award percentage is his or her participation in internal compliance systems. Conversely, interference with internal compliance and reporting systems by the whistleblower could lead to a decrease in the award.

The protections afforded whistleblowers are necessary, says Harold Burke, a Greenwich, Conn.-based attorney who works with both whistleblowers and companies. When deciding whether to come forward with allegations of wrongdoing, "there's nothing for employees to gain in terms of job security," he says. "The reality is that there will be cover-ups, their complaints will be ignored and they'll lose their jobs." The financial incentives for those involved in wrongdoing often are simply too great, he adds.

What's more, the vast majority of employees do report internally. A 2010 study by the National Whistleblower Center of cases filed under the False Claims Act between 2007 and 2010 found that nearly 90% of employees who filed a qui tam case, as whistleblower actions often are known, initially reported their concerns internally.

The Million-Dollar Threshold

Additionally, most SEC sanctions fall well short of the $1 million threshold required for whistleblowers to be eligible for an award, Rapp says. He estimates that fewer than 10 percent of cases result in any fines, and less than one-half of those result in sanctions that top the $1 million mark.

Even so, a bill introduced in June by Rep. Michael Grimm (R-NY) -- H.R. 2483, or the Whistleblower Improvement Act of 2011 -- would make several changes to the current regulations. Among them, it would drop the minimum award amount from 10% to 0%, and would require whistleblowers to report internally first -- unless there is evidence that the misconduct involved complicity at the highest level of management.

In fact, at least a dozen bills have been introduced that would repeal all or parts of Dodd-Frank, according to the Sunlight Foundation. While the likelihood of full repeal is slim, it's possible that a future administration could de-fund it, Burke says. If the office of whistleblower enforcement at the SEC drops down to a secretary at a desk, the likelihood of real enforcement action becomes almost nil, he adds.

Ostriches with Egos

Whether or not the whistleblower provisions change, companies that want to avoid wrongdoing -- presumably, that's most -- can use the new regulations as an opportunity to revisit their codes of ethics and corporate compliance efforts, Garyn says. The goal? "You want employees to trust that internal protocol is going to work."

Should an employee come forward with a claim of wrongdoing, managers need to investigate and report to appropriate agencies, Burke says. "Companies really should not have an ostrich-head-in-the-sand approach."

Additionally, they need "disconnect their egos from the case," Burke adds. It's easy, when having to account for one's actions -- say, against a claim of retaliation -- to get defensive. That can prompt others to question their credibility. "Get your ego out of the analysis."

A Customer Complaint Is a Gift

BJ Gallagher — Wed, 03 Aug 2011 15:00:50 -0700

Shannon Walker - President of WhistleBlower Security blogs: This is a great article speaking to a book called “A Complaint is a Gift” about customer service and feedback. The bottom line is feedback, even negative feedback is essential to improving our businesses and the way we manage them. We at WhistleBlower, believe our service offers organizations just that opportunity – to receive and proactively manage those negative interactions and improve the environment for their employees and customers. I think this book is a must read.

Read More...

Follow Shannon Walker on Twitter: http://twitter.com/#!/WhistlBlowrSays

China is on the fast train to disaster

Tue, 02 Aug 2011 15:42:10 -0700

Shannon Walker - President of WhistleBlower Security blogs: Chinese corruption – from appropriating intellectual property to bribery to blatant cutting corners on construction – have got to addressed in a systemic and global fashion as their successes will ultimately be their downfall. This story from the Guardian articulates all that is wrong with the business economy in China.

http://www.guardian.co.uk/commentisfree/2011/jul/28/china-fast-train-to-disaster

Global patient safety website offers alerts

Fri, 29 Jul 2011 11:19:27 -0700

The Canadian Patient Safety Institute (http://www.patientsafetyinstitute.ca/English/Pages/default.aspx) has launched a new website to raise awareness and encourage best practices to achieve a transformation in patient safety throughout Canada. The site will provide both the public and health care providers with news from around the world on leading edge practices.

http://www.cbc.ca/news/health/story/2011/05/04/patient-safety-website.html

The NotSo Private Parts

Kashmir Hill — Thu, 28 Jul 2011 12:07:08 -0700

Blog by Shannon Walker - President of WhistleBlower Security. Privacy By Design – the concept developed in Canada is now being embraced by technology companies in the US to begin designing their products with privacy protection as a priority in the overall product development. It is an important piece in the evolution of protecting consumers within the ever expanding reach of the internet.

http://blogs.forbes.com/kashmirhill/2011/07/28/why-privacy-by-design-is-the-new-corporate-hotness/

Shannon Walker presents Measuring Internal Communications

Shannon Walker - President WhistleBlower Security — Wed, 27 Jul 2011 09:59:38 -0700

October 24 & 25, 2011, Vancouver | 14th Communications Performance Measurement

Topic Brief

Bio

Shannon Walker is President and CEO of WhistleBlower Security, a firm which offers confidential ethic hotline services. Read More...

Course Highlights

Understanding the measurement framework
Ensuring a successful communications audit
Using media relations ratings points
Measuring the impact of social media
Measuring stakeholder and employee communication strategies
Improving your change communication strategy
Coaching and assessing managers on their communication role

Workshop

Tracking media interaction

Tracking tools that assist this approach
A consistent approach to data collection
Beyond media tracking and analysis: building a library of media interaction and clippings that may be instantly retrieved

Participating Organizations

Event's Topics

Creating an Effective Communications Measurement Framework
Getting Value for Money
Measuring Internal Communications
Measuring the Impact of Social Media
Impact of Communications on Your Organization's Reputation
Measuring the Ability of Management to Communicate Effectively
Obtaining Buy-in From Senior Management
Developing a Results-Oriented Communications Audit
Practical measurement tools for communication & social media

Read More...

Can you afford not to have an ethics hotline?

Scareware is growing but you can protect yourself

Shannon Walker — Tue, 26 Jul 2011 15:11:04 -0700

Scareware is scam software, usually with malicious intent, that is sold to consumers through unethical marketing practices. The usual sales approach uses shock, anxiety or fear-based tactics, usually directed at unsuspecting targets.

A strategy frequently used by criminals involves convincing users that a virus has infected their computer, then suggesting that they download, and pay for, fake antivirus software to remove it Usually the virus is entirely fictional and the software is non-functional or malware itself. Scareware usually appears through online advertising, social networking sites or pop-ups.

The common scams that you need to be aware of are:

- Ads that promise to delete viruses, remove harmful files or protect privacy

- Alerts about malicious software

- Invitations to download free software for a security scan

- Pop-ups that claim security software is out of date and computers are in immediate danger

The best way to avoid scareware is to use your basic common sense. Legitimate anti-virus software companies never use pop-ups nor do they scan for viruses without permission. Here are some suggestions to keep your computer safe:

- Use only legitimate antivirus that you can trust

- Read emails in plan text without the graphics

- Never open file attachments from strangers

- Be skeptical of any online offers

- Use ad or pop-up blockers because scareware infections often are delivered via advertisements.

Online fraud continues to grow so one of the most important things you can do is educate yourself and your employees. With little legislation currently existing to deal with this kind of malicious behavior, you need to be your own advocate and ensure you don’t fall to prey to this form of destructive and invasive fraud.

Do you need a WhistleBlower Hotline? Anonymous Online Reporting System?

The Association of Certified Fraud Examiners findings indicate fraud often occurs for up to 18 months

Tue, 26 Jul 2011 15:13:31 -0700

The Association of Certified Fraud Examiner’s findings indicate fraud often occurs for up to 18 months without being detected. A recent PriceWaterhouseCoopers survey indicates that insufficient internal controls is one of the top three reasons for committing fraud. When an employee or volunteer realizes there are loopholes to exploit, in some cases it’s an opportunity too tempting to resist. Fraud can erode up to roughly 6% of an organization’s revenues.

13.4 percent of the cases studied by the ACFE for its 2002 Report to the Nation: Occupational Fraud and Abuse involved non-profit organizations. While the average amount lost to fraud in the typical non-profit is less than in the for-profit world, the damage can be even more pervasive.
It is imperative that Not-For Profits implement basic due diligence processes such as the following:

Establish Internal Controls
Implement a formal code of conduct
Develop an appropriate expense policy
Provide fraud training for staff
Use unique passwords for each individual employee
Conduct random audits on business accounts
Implement a third party whistleblower hotline

Need a WhistleBlower Hotline?

US regulators threaten to reach into Canada

tim kiladze - globe and mail — Mon, 25 Jul 2011 15:25:28 -0700

Shannon Walker, President of WhistleBlower Security blogs: The long arm of the US government is threatening to come over the border and demand more stringent oversight concerning cross border investment deals. It seems that while they still struggle to get their own house in order, they are looking to try and manage us as well. What do you think?

Canada’s investment dealers are up in arms about new U.S. securities legislation that would impose U.S. rules north of the border.

If enacted, the proposed changes would affect the U.S. arms of Canadian investment dealers. Historically, if Canadian-traded shares were sold to a U.S. client, execution and settlement of that trade would be routed back through Canada. That meant Canadian regulators had to watch out for the U.S. client’s best interest while the trade was processed.

More related to this story

The Dodd-Frank rules you don’t know

But under new Dodd-Frank rules, FINRA, the U.S. self-regulator, has proposed subjecting Canadian clearing to U.S. standards. The Canadian investment dealers have no problem with U.S. regulators monitoring the actual sale of securities south of the border, but they don’t like the idea of additional U.S. oversight once the deal is routed back into Canada.

A second, less severe, proposal would require registering more back-office people who are involved in the clearing and settlement of Canadian securities sold south of the border. By requesting increased registration, FINRA is asking for more people to take the Series 7 exams, the U.S. equivalent of the Canadian Securities Course.

That may not seem like such a big deal, because it’s just a few exams, but ask anyone around you who has written the Series 7 exams how long they procrastinated before they finally sat down to write. There's a good chance it was months, if not years.

To push back on the reforms, the Investment Industry Association of Canada has started a dialogue with U.S. regulators. IIAC was even in Washington, D.C. last week to sit down at the same table as FINRA and explain that there haven’t been any problems with the current system, which has been in place for 20 years. Under the existing model, the Securities and Exchange Commission simply trusts that Canadian Securities Administrators were on the ball, and IIAC is arguing that not much has changed.

However, the U.S. is pushing for much stricter guidelines in the aftermath of things like the Bernie Madoff ponzi scheme.

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/us-regulators-threaten-to-reach-into-canada/article2109030/

Regulators Seek to Reduce Unemployment Insurance Fraud

Mark Scott, J.D., CFE — Wed, 20 Jul 2011 15:03:09 -0700

Federal and state regulators are ratcheting up efforts to reduce fraud and waste in the unemployment insurance system.

As jobless claims soar amid a weak economy, improper payments of unemployment benefits due to fraud and error are reaching record levels. According to the Department of the Treasury, improper payments of unemployment benefits cost taxpayers more than $17 billion last year.

According to the U.S. Office of Management and Budget's Partnership Fund for Program Integrity Innovation, "improper payments occur when funds go to the wrong recipient, the recipient receives the incorrect amount of funds (including overpayments and underpayments), documentation is not available to support a payment, or the recipient uses funds in an improper manner."

The Department of Labor released figures showing that in the 12 months ending in March 2011, the rate of improperly paid unemployment benefits was 11.59 percent, an increase of one percent from the same period a year earlier. The overpayment rate was 9.6 percent in fiscal 2009 and 9.25 percent in 2008.

Officials have placed partial blame on rising unemployment, which compelled state officials to use fraud, waste, and abuse personnel to help deal with the overwhelming increase in claims. "State staff and the information technology systems used to process claims have been severely stressed in managing the overwhelming workload," Gay Gilbert, the Administrator of the U.S. Department of Labor's Office of Unemployment Insurance, said at a House Appropriations Committee meeting. "As a result, many states transferred program integrity staff to process claims during much of the recession," he said.

What is more, Gilbert noted that many claimants are willing to commit unemployment insurance fraud during these tough economic times. "Some claimants, when confronted with discrepancies in their claims, tell state staff they are simply desperate and willing to risk committing fraud to get money to feed their families," he said. Unemployment insurance fraud occurs when a claimant knowingly conceals or misrepresents any eligibility information to obtain unemployment benefits.

The Department of Labor, however, claims that the primary reason for the high rate of improper payments is that some individuals continue to claim benefits after returning to work. Another leading cause is that many employers fail to provide government officials with timely and accurate information necessary to determine the workers' eligibility. Additionally, some workers receive benefits even when they fail to comply with state work search requirements.

Accordingly, federal and state lawmakers are employing new strategies to reduce fraud and waste in the unemployment insurance system:

States can use the National Directory of New Hires, a database that contains personal and employment data on newly hired individuals, to improve detection of claimants who continue to obtain benefits after returning to work. States can identify overpayments by crosschecking unemployment benefit claims against the National Directory's data. All states must use the directory by the year's end.
A number of states have been working together to stop improper payments. They created a web-based information data exchange system through which they can exchange unemployment insurance information with each other and employers or third-party administrators. Currently, Georgia, Utah, New Jersey, Colorado, and Ohio participate in the system. The system will make it easier for employers to communicate with the states.
Rhode Island has four investigators to pursue individuals who are defrauding the system, and the state has hired a collection agency to recover improper payments, the Associated Press reported.
Recently, Congress placed greater focus on combating improper payments in the unemployment insurance program by passing the Improper Payments Elimination and Recovery Act of 2010. The Act contains two provisions regarding unemployment insurance: First, it requires that employers report the first day of earnings for new hires to the National Directory of New Hires. This will help states identify claimants who continue to claim benefits after returning to work in a different state. Second, the law allows states to recover unemployment compensation debts from income tax refunds.
The Treasury Department established a public website that reports improper payment information for all "high priority" federal agency programs, including unemployment insurance programs.
The U.S. Office of Management and Budget established Partner4Solutions.gov to provide an opportunity for the public to recommend strategies for making federally funded assistance programs, such as the unemployment insurance program, more efficient.
The Department of Labor has proposed several strategies to address the several root causes of improper payments, including a requirement that states impose a penalty of at least 15 percent on fraudulent overpayments.

Time will tell if these strategies are successful. Still, the unemployment insurance system needs new solutions and technological tools, such as the state information data exchange system, to confront its fraud and waste problem.

Losing more than $17 billion to fraud and waste each year is unacceptable, said Senator Tom Carper, in prepared testimony for a hearing on preventing improper payments. "These dollars must be targeted to those in need and not lost through mismanagement and error. We must address the high level of improper payments (within) the unemployment insurance program now," he said.

http://www.acfe.com/newsletters/fraud-examiner.asp?copy=july11-unemployment-insurance

Shannon Walker presents Measuring Internal Communications

Shannon Walker — Thu, 14 Jul 2011 11:44:30 -0700

October 24 & 25, 2011, Vancouver | 14th Communications Performance Measurement

Topic Brief

Bio

Shannon Walker is President and CEO of WhistleBlower Security, a firm which offers confidential ethic hotline services. Read More...

Course Highlights

Understanding the measurement framework
Ensuring a successful communications audit
Using media relations ratings points
Measuring the impact of social media
Measuring stakeholder and employee communication strategies
Improving your change communication strategy
Coaching and assessing managers on their communication role

Workshop

Tracking media interaction

Tracking tools that assist this approach
A consistent approach to data collection
Beyond media tracking and analysis: building a library of media interaction and clippings that may be instantly retrieved

Participating Organizations

Event's Topics

Creating an Effective Communications Measurement Framework
Getting Value for Money
Measuring Internal Communications
Measuring the Impact of Social Media
Impact of Communications on Your Organization's Reputation
Measuring the Ability of Management to Communicate Effectively
Obtaining Buy-in From Senior Management
Developing a Results-Oriented Communications Audit
Practical measurement tools for communication & social media

Read More...

Can you afford not to have an ethics hotline?

Edward Nagel is on Radio Shalom 4pm EST July 13 2011

Edward Nagel — Wed, 13 Jul 2011 08:45:10 -0700

Tune in to hear Principal Edward Nagel, CA*IFA, CBV at 4pm EST on Montreal, PQ based radio station Radio Shalom, 1650 AM ( http://www.radio-shalom.ca/EN/showemission.php?ID=1042) on their “Money and Business” show. The topic is “Financial Fraud Part II: From Discovery to Prevention”.

About Edward

Toronto forensic accountant Edward Nagel is Principal and founder of nagel + associates. He is a seasoned Chartered Accountant (CA) with over 15 years of experience. He has focused exclusively for the past 12 years on providing forensic and investigative accounting services to corporations, individuals, public sector and not-for-profit organizations and their legal advisors/boards, primarily in the area of corporate fraud.

Edward’s experience encompasses leading and conducting financial investigations, investigating allegations of fraud and financial misconduct, providing anti-fraud consulting/training, conducting financial motive reviews and analyzing and quantifying economic damages.

http://nagel-forensics.com/

Prevention is the best tool

Shannon Walker — Tue, 12 Jul 2011 11:14:36 -0700

Can you afford not to have the Whistleblower Service?

Managing risk means managing multiple variables from numerous sources. Building a comprehensive system to manage disparate pieces of information in one centralized location is key to your GRC program. WhistleBlower Security can manage your information, on a global basis, and ensure you have access to all of it in an intuitive based and real time system. Contact us today to find out how we can simplify your system. Our feature sheet will provide you with some further information (PDF)

To keep abreast on the latest industry news, WhistleBlower services and blogs subscribe to our monthly newsletter for free.

Event 2 Day Master Class for Directors

Sunil Bahri — Wed, 06 Jul 2011 14:23:11 -0700

Dear Friends , Business Partners and Professional Colleagues

I have great pleasure in inviting you all to attend a 2 Day Master Class for Directors – Theme Corporate Governance , Risk & Compliance.

This is a special event for all C Level Executives planning to enhance their professional careers and wish to act as Independent Directors in listed corporations.

The Event will also be a great networking event in Paradise Islands of Mauritius and interaction with C-Level / Directors and Senior Executives who will be coming in from India , UK , UAE , COMESA , Africa and Mauritius .

All the details are annexed and please contact me anytime at my Global Cell : +971 55 886 8029 / Email : Sbahri@kaizensox.com /Skype : skby888.

Best Regards and wish to meet you in Mauritius on July 20-21, 2011.

Sunil Bahri

MASTER CLASS FOR DIRECTORS PDF

Cisco Whistleblower Comes Out On Top

Marilyn Sandford — Mon, 04 Jul 2011 13:14:50 -0700

British Columbia’s highest court has accused tech giant Cisco and U.S. officials of a massive abuse of process in order to have a Cisco whistleblower thrown in jail. B.C. Supreme Court Justice Ronald McKinnon said Cisco had the “unmitigated gall” to attempt to use Canada’s justice system, via U.S. officials, to pressure former Cisco exec Peter Alfred-Adekeye into dropping a civil suit against the company. Alfred-Adekeye had alleged that Cisco was illegally forcing customers into maintenance contracts. Cisco eventually settled the suit and abandoned the maintenance-contract practice, but not before Alfred-Adekeye spent 28 days in a Canadian jail. The Alfred-Adekeye case has caused outrage among many commenters, some of whom have suggested it’s a sign that the U.S. is becoming a “corporate police state.” The Mark interviewed Marilyn Sandford, who represented Alfred-Adekeye during his extradition proceedings.

THE MARK: What happened in this case, and how did you get involved?

MARILYN SANDFORD: On May 31, the Supreme Court of British Columbia upheld a decision to stay extradition proceedings against my client, Peter Alfred-Adekeye. The United States was seeking to have my client surrender to face charges in the state of California, in which they alleged that he gained unauthorized access to Cisco’s computer products.

My client’s company had sued Cisco in the United States, in what’s called an anti-trust lawsuit. He and his company alleged that Cisco was engaging in competitive practices that were not lawful, as they were unduly restrictive to competitors. In response to that, Cisco counterclaimed that, just after he left his job there, my client had used a friend’s password – someone who still worked at Cisco – and had accessed things that, as a former employee, he should have been paying money to access online. As a result, Cisco claimed losses that it said amounted to over $14,000.

In the face of that criminal charge in the United States, my client was arrested here in Canada. Alfred-Adekeye is a British citizen who was residing in Switzerland. He was in Vancouver for the purpose of testifying in the lawsuit against Cisco, but, during the course of his testimony, the Canadian authorities – at the request of the Americans – arrested him on an extradition warrant. That was in May 2010. Prior to the extradition hearing in Vancouver, we brought a motion to have the case stayed as an abuse of the process of Canadian courts, and Justice McKinnon sided with us.

Cisco communicated with the U.S. prosecuting authorities concerning the factual allegations raised in its counterclaim, and a criminal charge was then laid. So the charge that my client was arrested on in Vancouver – as he was testifying in his lawsuit – was a criminal charge that mirrored this counterclaim. The judge found that the criminal process in the United States was used in an effort to pressure my client into abandoning his anti-trust suit against Cisco. That’s one of the aspects of what the judge found to be abusive – the fact that the U.S. used Canada’s criminal process, and then the arrest itself, to arrest Alfred-Adekeye as he was testifying in front of six lawyers. It was all on videotape, too, with the cameras rolling.

First of all, the judge said we don’t arrest people in what’s close to being a courtroom. He said no civilized country does that. That’s something we strongly argued – that you never arrest people while they are testifying in any case, let alone at the behest of the guys on the other side of the table. It was pretty clear that Cisco was involved in arranging the arrest in those circumstances, and that it was in communication with the American authorities. So that was part of the abuse.

Another, very large, part of what he thought to be abusive was that Canada was dragged into this whole mess. For the Americans to come to Canada and say, “Arrest this person in Canada,” when Alfred-Adekeye was, at all times, ready, willing, and able to travel to the U.S. seems absurd. He’d even written a letter to U.S. President Barack Obama complaining about the fact that he had been denied a travel visa to the U.S., which he had requested for business purposes associated with the lawsuit against Cisco.

We made the case that the American prosecuting authorities were not honest with the Canadian prosecuting authorities in terms of what this was all about. We argued that many of the important facts were disguised in the materials that were provided, and that the Canadian authorities thus had a completely incorrect understanding of what was actually going on in Canada. They certainly were not told that the Americans had refused Alfred-Adekeye voluntary entry to the U.S., and that he had gone through what can only be described as heroic efforts to try and get into their country lawfully, as a visitor, for the purpose of this deposition. It struck me as extraordinarily bizarre that the Canadian authorities would be asked to go to the trouble and expense of arresting someone who was perfectly willing to go to the U.S. on his own.

THE MARK: Has something like this, to your knowledge, occurred before … where a judge has ruled that there appears to be purposeful misleading on the part of a foreign country?

SANDFORD: We learned, in the course of arguing this case, that there have been five situations where a Canadian court has stayed an extradition case as an abuse of the process of Canadian courts. Each of those five cases has been very different from the others, and none of them really have facts that resemble our facts. We spent a great deal of time in the courtroom going through those other cases carefully, and comparing them to this case, but they were nothing like this. I don’t know of any extradition where the foreign authorities refuse someone entry and yet ask another country to go to the expense and trouble of doing something like this, where we’ve had to put in this incredibly time-consuming effort on the part of our police, our prosecutors, and our court.

I argued strongly that Canada was duped by the actions of the American prosecutor, and that Cisco was a party to all of that as well. The U.S. prosecutor’s letter [arguing against releasing Alfred-Adekeye on bail in Canada] strongly indicated that my client was in breach of all sorts of immigration laws. None of those allegations were true. The letter said that, if he were released on bail, my client would flee, as he has done in the past. That was just absolutely ridiculous, in my view – to suggest a perfectly law-abiding citizen has fled in the past. He’s never fled anywhere. There’s no evidence he’s ever fled.

THE MARK: From a legal standpoint, is there a process by which Canada could seek recourse for these kinds of falsifications? Or does this just die here?

SANDFORD: As far as the Canadian government is concerned, when we deal with [extradition] requests from other countries, we have to keep in mind that we’ll have requests to make of them in the future. So there’s this principle known as the comity of nations, which involves treating other nations courteously, and doing your best to follow through in their requests, with the notion that they will treat you similarly courteously in the future – when, for example, there is a fugitive from Canada who flees to the U.S. My argument was that comity, in this case, was terribly breached by the actions of the Americans. We argued that the American’s actions were an insult to Canada – to our courts, to our police officers, and to our prosecutors.

These are very strong principles in international law, and they govern international criminal law where countries have to work co-operatively. That means it’s up to Canada to do what it wants to do, but I very much doubt there will ever be any change in the way we, as a country, approach requests made by a country like the United States. I just don’t see that happening.

THE MARK: Is there an opportunity for your client to fight back on these false claims?

SANDFORD: I think what you’re asking is if there’s anything more my client can do, now that his extradition case is over. I don’t know – that’s something he’ll have to seek legal counsel about. The fact is, he spent a year of his life living here in Canada – in a country he barely knew, far from his young family. And he spent a considerable amount of time in jail before he managed to get bail. He had to struggle to run his business enterprises in those circumstances, and he suffered tremendously – from being away from his family, and from being arrested and humiliated in the manner that he was.

It’s a terrible, terrible thing that he’s come through, and he’s managed to do it with considerable fortitude. He has a great belief in Canada now, having learned about our country. He’s one of the strongest supporters of this country, and he only has good things to say about the manner in which he was treated by everyone involved in Canada’s judicial system, including, not just the judge, but everyone involved – the police, the jail guards, and the guards at the pre-trial centre. But he has to regroup and reconsider, and perhaps obtain some legal advice about potential next steps. Has he suffered some damages? In my view, from a non-legal perspective – speaking just as a human being – yes … he’s suffered tremendously.

Photo courtesy of Reuters.

The Mark News: http://ca.news.yahoo.com/cisco-whistleblower-angry-judge-052811204.html

SEC on lookout for bubbleera IPO practices

Joseph A. Giannone — Wed, 29 Jun 2011 09:41:46 -0700

(Reuters) - Some recent red-hot initial public offerings have the Securities and Exchange Commission concerned that Wall Street's underwriters may be tempted to revive some troubling tech bubble practices.

"You can't help but be concerned by IPO valuations," Robert Khuzami, the SEC's enforcement chief, told an audience of Wall Street lawyers and compliance officers in New York on Tuesday.

A combination of first-day trading spikes -- such as a 109 percent advance by social networking company LinkedIn Corp (LNKD.N) last month -- and razor-thin yields on bonds and other securities, may create an environment where Wall Street investment banks can take advantage of investor demand.

"It hasn't been that long ago that allocation practices were at the forefront of everyone's mind, and charges were brought against firms for Reg M and aftermarket violations for using their allocation process for creating demand in the aftermarket," Khuzami said at a luncheon hosted by the Securities Industry and Financial Markets Association.

Khuzami said the SEC will look to see "whether or not" these issues "give rise to practices that we saw historically and that troubled us."

LinkedIn's shares on May 19 more than doubled in price on their first day of trade on the New York Stock Exchange, evoking memories of the frenzied dot-com bubble years. The advent of online brokerage accounts and a nation of day traders helped then start-ups like theglobe.com, VA Linux and MarketWatch.com rise by six- and seven-fold.

Many of these bubble babies burned through their proceeds and then disappeared, leaving millions of small investors stuck with losses.

The SEC and other regulators later brought cases against Wall Street's biggest banks for a number of practices designed to generate those eye-popping returns.

Regulation M is a set of SEC rules intended to preclude manipulative conduct by individuals with an interest in the outcome of a securities offering.

Investment bankers, serving as the bridge between investors and companies, typically try to price an IPO so that the stock rises about 15 percent on the first day of trading: enough to reward investors who made a bet but not so much that issuers feel short-changed.

NEW BUBBLE?

Recently, several hot-button technology companies and Chinese firms have generated big first-day gains.

Renren Inc (RENN.N), one of the biggest social networking companies in China, last month surged 296 percent in its debut. Strong demand for the unprofitable company was viewed as a sign investors were eager to snap up social media companies.

There was also a 134 percent jump by Qihoo 360 Technology (QIHU.N) in March. Yandex NV (YNDX.O), known as "Russia's Google," rose 55 percent in its trading debut.

Khuzami before his luncheon remarks told Reuters that the recent news of accounting scandals involving a number of Chinese companies has the agency's full attention.

"We're looking at that issue from a variety of fronts, from listing standards of the exchanges, to the (Public Company Accounting Oversight Board) and enforcement," he said on the sidelines of the SIFMA event. "We're obviously focused on the auditing firms. It's a problem and we're devoting some energy to it."

The recent collapse of Sino-Forest, a Canada-listed Chinese company, raised pressure on regulators to stem a tide of accounting scandals that snagged investors who had been eager to tap into China's growth.

Last week SEC Chairman Mary Schapiro said the agency would address concern about shoddy accounting that has caused numerous Chinese companies to restate earnings and send their share prices plummeting.

Some market watchers, though, say there are signs that investors are more skeptical this time around.

Internet radio provider Pandora Media Inc (P.N) rose by half on its first day, but the money-losing company saw its shares fell hard in subsequent days and remain below their offering price.

(Reporting by Joseph A. Giannone, additional reporting by Clare Baldwin; editing by Gerald E. McCormick, Bernard Orr)

http://www.reuters.com/article/2011/06/28/us-sec-ipos-idUSTRE75R6OJ20110628

WhistleBlower Employee Triumphs JP Morgan Chase Backs Down and Dismisses 1000s of Lawsuits

Shannon Walker — Fri, 24 Jun 2011 12:46:01 -0700

Today, both an article in the Wall Street Journal and on a Forbes blog by Stephanie Eidelman, tell the story of a JP Morgan Chase employee who stood by her ethics and values and won. Linda Almonte, a banking professional in Texas when she questioned the legitimacy and ethics in selling a portfolio of credit card debt. After she was unceremoniously fired, a law suit was filed against JP Morgan Chase, and they subsequently settled with Linda and dropped over 1000 debt collection lawsuits.

The New York Times also wrote about this story in late 2010 - read more here: http://online.wsj.com/article/SB10001424052702304231204576404052290445530.html

http://blogs.forbes.com/insidearm/2011/06/24/a-whistleblower-triumph-jpmorgan-chase-drops-pursuit-of-45-9bb-yes-billion-in-credit-card-debt

Whistleblower Tribunal finally swings into action but will it perform

David Hutton - June 20, 2011 — Wed, 22 Jun 2011 13:35:40 -0700

Shannon Walker, President of WhistleBlower Security blogs: Canadian Public Service Disclosure Protection Tribunal Launches – but will it improve the current situation for whistleblowers or continue in the footsteps of its predecessor and be more of a hindrance and ineffective entity?

For Canadian public servants May 16 was an historic day: that’s when the tribunal that’s supposed to protect government whistleblowers was finally launched into action – triggered by a referral from the integrity commissioner’s office.

The Public Servants Disclosure Protection Tribunal is the only body in Canada that has the power to order a remedy for whistleblowers and to sanction the aggressors. It will now examine the allegations sent to it by the integrity commissioner, hear evidence from both sides, and hand down its decisions.

It’s shameful that this first referral comes four years after the position of Public Sector Integrity Commissioner was established. It’s also shameful that of the hundreds of whistleblowers who came forward, so far only one individual has any hope of obtaining redress, in spite of recent efforts to untangle the mess created by disgraced former commissioner Christiane Ouimet.

Hopefully there will be many more cases referred to the tribunal as OPSIC gets its act together under interim commissioner Mario Dion, and thoroughly re-examines the cases closed by Ouimet.

The big question now is: how will the tribunal perform? Regardless of the diligence and good intentions of its judges and staff, it is hamstrung by poor legislation. The Public Servants Disclosure Protection Act (PSDPA), which provided Ouimet with so many ways of fobbing off whistleblowers, also provides a flawed mandate for the tribunal. We see four serious problems:

1. Near impossible burden of proof
The onus is on the whistleblower to prove that the actions taken against him were in retaliation for disclosing wrongdoing. But this is usually impossible since abusive bosses invariably cover their tracks and invent plausible reasons for their actions. The burden of proof should be on the employer to show that adverse actions were not reprisals. Even with this ‘reverse onus’, proving reprisals is not a slam dunk for the whistleblower – only about 20% are successful.

2. Lack of legal representation
Those accused of retaliation will almost certainly be defended at the tribunal by a team of Justice Department lawyers with seemingly unlimited time and resources, all paid for by the taxpayer – but the law provides no legal assistance to the whistleblower. Without the services of an excellent lawyer the whistleblower has little chance and these legal proceedings can be very costly, sometimes running into hundreds of thousands of dollars. If the whistleblower is lucky he may have a union willing to come to his aid, but this is often not the case. This law does not create a level playing field!

3. No access to courts
There is limited transparency or accountability to ensure that the Tribunal does its job properly: it can hold its hearings in secret, take as long as it likes, and it need not even file its decisions with the Federal Court. The only avenue of appeal is judicial review, whereby the matter can be sent back to the tribunal for reconsideration if a mistake is judged to have been made. A judicial review cannot order a remedy for the whistleblower or sanction the aggressors.

No matter how questionable the Tribunal’s actions or decisions the whistleblower cannot gain access to the normal court system, with court reporters, standardized rules of procedure and judges whose impartiality is safeguarded by secure tenure.

The USA has tried a similar arrangement: a special purpose administrative body, with no access or right of appeal to the courts, and no ‘reverse onus’ provision for federal whistleblowers. This failed spectacularly: of the first 2,000 whistleblowers who submitted complaints of reprisal, only four prevailed. Why repeat the mistakes of others?

4. Inadequate penalties and remedies
In the event that a whistleblower does prevail, what sanctions should be handed out to the aggressor, and what remedies should be available to the whistleblower? The PSDPA falls short by treating reprisals like mere employment disputes of the type that grievances are designed to handle: it provides correspondingly weak penalties and remedies.

How should the law handle proven reprisals? In much the same way as when a criminal bludgeons half to death witnesses to his crime – since harassment can inflict equally devastating and debilitating wounds. There should be ‘make whole’ remedies available to the victim including compensation for permanent disabilities inflicted. And there should be personal liability on the part of the harasser: they should not be shielded by their department with their legal bills covered by the taxpayer.

Inadequate penalties are a huge problem because whistleblower laws work by deterrence.
If even a few wrongdoers are publicly sanctioned the word quickly goes out and many others are deterred.

This is largely why the integrity commissioner’s office has been such a disaster: wrongdoers are if anything emboldened because no-one has been sanctioned. The first (and so far the only) wrongdoer exposed through the use of the PSDPA was Christiane Ouimet herself, and the ‘punishment’ she received sets a terrible precedent.

Sent into comfortable retirement with a $500,000 ‘severance’ package (and a gag order to prevent her from spilling the beans) this Ouimet’s kid-glove treatment sends a clear message – that wrongdoers in high places will be shielded from any sanctions that might be imposed by Parliament. Every month that this absurd decision stands it becomes more difficult to believe that this government is sincere about protecting whistleblowers.

Now it’s the tribunal’s turn in the spotlight. With competent and diligent leadership it can perhaps do some good and justify its existence. But there are many ways that it can fail, and many ‘red flags’ that observers will be watching for.

Foot-dragging and delays
Delay is one of the bureaucracy’s tried and tested defence strategies, because delay always benefits the accused wrondoers and causes further harm to the whistleblower.

When Foreign Affairs whistleblower Joanna Gualtieri sued her bosses for harassment, government lawyers abused the legal process by tying up her case in procedural manoeuvres for twelve years, without it ever coming to trial (they settled virtually on the courthouse steps). When Dr. Shiv Chopra and his two Health Canada colleagues were simultaneously fired and grieved their dismissal to the PSLRB, government lawyers dragged out the hearings for six years. Another a year has passed since the final arguments were heard, yet still no decision has been handed down.

It would be wonderfully refreshing to see a Canadian court or tribunal recognize the massive imbalance of power and resources between the parties that often exists in a whistleblower case, and therefore handle it with some sense of urgency. The Tribunal’s website states that its performance standard for completing cases is 250 calendar days. It has had four years to get ready for this moment. Let’s see if it can meet its own standard for timeliness in this first case.

Secret hearings
If the Tribunal chooses to meet in camera it stands to lose all credibility, regardless of the ultimate outcome of the process. Given the track record of this whistleblower-protection regime thus far, who could possibly trust that justice is being done behind closed doors?

It’s also hard to see any possible justification for secrecy. It is doubtful that there are national security issues at play here – employees of the armed forces and the intelligence agencies have no protection under this law – and protecting the government from embarrassment is definitely not a valid reason. This legislation was supposed to increase government transparency, not eliminate it.

Hostile or ill-informed appointees
The history of whistleblower laws around the world is replete with examples of ludicrous judicial decisions, often creating precedents that gut the legislation or even reverse the intent. It seems that those appointed to oversight bodies are often chosen because they can be relied upon – through instinct, ideology or personal loyalty – to protect the status quo.

Christiane Oumet seems a perfect example of such an appointment, but she is by no means unique. Her former counterpart in the USA, Scott Bloch, was accused of similar wrongdoing – arbitrarily closing files, harassing his staff, impeding investigations – and recently sentenced to serve time in jail. In January Michael Dudley, the acting chief of the U.N. division that investigates internal wrongdoing, came under investigation for almost identical misconduct.

We have no reason to believe that the appointees to our tribunal are anything other than competent, diligent, honourable and well-intentioned people. But given the inevitable mistrust engendered by the circumstances of Ouimet’s appointment and retirement, their words and actions will be scrutinized closely.

These judges need to demonstrate an understanding of the great courage that it takes to come forward, especially when the wrongdoers are powerful and well-connected. They need to recognize how devastating and life-changing reprisals can be, and to be prepared to study and learn about this phenomenon. They need to recognize that whenever there is a wrongdoer operating in a position of authority, there is always a parallel cover-up and a campaign to silence witnesses: it’s normal to encounter layer upon layer of deception – bold lies, bogus investigations, falsified documents. And the judges need to demonstrate that they will not simply accept at face value the word of a senior bureaucrat over that of a perhaps lowly truthteller because power holds sway. It’s the evidence that counts.

Soft landings for wrongdoers
Canadians were rightly offended by how Christiane Ouimet was protected from any accountability for her misconduct. The tribunal must not fall into the trap of handing out token sanctions.

In conclusion
The tribunal has been given a monopoly – there is no other agency in Canada with the power to protect whistleblowers from reprisals. With this mandate comes a heavy responsibility to show that it can do the job. But this may prove to be impossible due to the flaws inherent in the legislation.

The law needs to be strengthened but there are other, arguably better strategies available. For example the tribunal could be scrapped or at least truthtellers allowed to go directly to the courts – with substantial legal aid and the vital ‘reverse onus’ provision. Such an arrangement might cost the taxpayer much less to administer – and be more effective in deterring costly frauds against the public purse.

So there’s no compelling reason to keep the tribunal if it seems unable to do the job. The PSDPA must be reviewed by 2012 and organizations like FAIR, Canadians for Accountability and Democracy Watch expect to have a voice in the process. By then it should be should evident whether the tribunal deserves to survive.

David Hutton is the executive director of FAIR (Federal Accountability Initiative for Reform)

Original article on Hill Times website (subscription required)

http://fairwhistleblower.ca/content/whistleblower-tribunal-finally-swings-action-will-it-perform

Financial Analyst I or II Sarbanes Oxley Project Management Office

Pharma Diversity Job Board — Mon, 20 Jun 2011 09:14:22 -0700

Company Name: Quintiles
Location: Research Triangle Park, North Carolina Country: United States
Industry: Management Position type

Long Description

PURPOSE
Quintiles pioneered the idea of helping pharma companies conduct objective clinical trials to establish not only whether a drug is effective, but who can take it safely. Our customers have relied on us to design and conduct rigorous clinical research for decades, from small studies to multinational mega-trials. However, we continue to develop new ways of interpreting and evaluating data that allow us to create more effective trials and determine outcomes faster. If that is your passion, we have a place for you. Apply now for our SOX PMO Financial Analyst position located in our Research Triangle Park, NC office.

The SOX PMO Financial Analyst will assist the Global SOX PMO in coordinating and performing the review of control objectives, key controls, test plans, testing, and remediation plans for an internal compliance assessment with Section 404 of the Sarbanes Oxley Act (SOX). The focus will include but not be limited to financial processes, operational processes and information technology (general and application controls).

RESPONSIBILITIES
*         Coordinate information gathering for external audit testing and analysis relating to Sarbanes Oxley compliance.
*         Conduct process review meetings, review, evaluate test controls, document test results and make recommendations for improvement.
*         Provide guidance and support to the IT and other business lines in developing, implementing and maintaining effective self assessment compliance programs/plans.
*         Manage and track the documentation of key financial reporting processes and related controls.
*         Monitor gaps in internal controls over financial reporting and remediation efforts.
*         Primarily responsible for IT risk assessment and data analysis as well as other IT related function.
*         Liaise with key IT personnel directly and other business areas to ensure changes to processes are updated in the Control Assessment database.
*         Assist in development of the annual SOX plan.
*         Assist Internal Audit with SOX needs and requests.
*         Identify improvements in controls to strengthen the control environment and also identify process changes to improve the businesses operating efficiency.
*         Perform other duties as needed.REQUIRED KNOWLEDGE, SKILLS AND ABILITIES
*         Bachelor's degree in accounting, finance, or other related field, and a minimum of 7 years accounting experience including 4 years of public accounting or internal auditing experience, and 3 years serving in a management or supervisory role, or other comparable combination of education, training and experience.
*         CPA Certification preferred.
*         Possess strong problem solving skills.
*         Possess strong interpersonal skills with the ability to work as a team member.
*         Possess strong communication skills to change the thinking of, or gain acceptance from others in sensitive situations, without damage to the relationship.
*         Knowledge of PCAOB and Sarbanes Oxley requirements.
*         Strong project management skills.
*         Ability to conduct US Generally Accepted Accounting Principles (GAAP) research.
*         Knowledge and understanding of IFRS a plus.

* For application attention if web source is requested please use PharmaDiversity or PharmaDiversity Job Board.

http://www.pharmadiversityjobboard.com/view_job.php?post_id=521582&tag=simplyhired&r=4587824

Whistleblowing Lessons DoddFrank Watch

Mark Nuccio — Fri, 17 Jun 2011 11:02:15 -0700

While the Dodd-Frank Act added a new whistleblower law as Section 21F of the Exchange Act and the SEC recently published its final rule implementing the new law, whistleblower laws are not at all new. Companies and courts have decades of experience contending with whistleblower claims under the False Claims Act. It stands to reason that the sturm und drang of future whistleblower claims under Section 21F may end up resembling the woof and warp of whistleblower claims made under the False Claims Act. So I asked my colleagues, Doug Hallward-Driemeier and Kirsten Mayer, what insights the False Claim Act experience provides for public companies about whistleblower claims made under the SEC’s new rule.

Doug developed many of his insights from inside the Justice Department and Solicitor General’s office where he argued False Claim Act and securities law cases, so he possesses both good technical expertise and practical knowledge about how to be ready for life with the new SEC whistleblower rule. Kirsten has been counseling clients on FCA matters for over ten years, and recently spoke on an ABA panel regarding recent amendments to the FCA, including the amendments to its anti-retaliation provisions. Here’s what they think are the biggest lessons.

There’s no question that the whistleblower and anti-retaliation provisions mandated under Section 922 of the Dodd-Frank Act, and implemented by Regulation 21F, are a game-changer that significantly expand the SEC’s largely non-functional bounty program and the anti-retaliation provisions of Sarbanes-Oxley § 806. And it’s no accident that new Section 21F of the Exchange Act resembles the FCA’s whistleblower provisions. Under criticism from the SEC’s Office of the Inspector General, the agency consulted with the DOJ to identify the types of “best practices” that were successfully utilized to recover $3 billion in 2010 and more than $27 billion since 1986.

You already know the bad news: Like the FCA, the SEC’s whistleblower provisions offer whistleblowers substantial financial incentives for providing information about fraud to the government, which translates to increased compliance costs and a threat of follow-on civil litigation for public companies.

But there is also some good news (or, at least, not-as-bad-as-it-could-have-been news). In certain key aspects, Section 21F may avoid some of the worst abuses that have plagued the FCA’s whistleblower provisions:

1. Unlike the FCA, the SEC whistleblower provisions do not offer whistleblowers a private right to sue in court. Of course, there are already private suits for securities fraud, but these are limited to investors who have suffered a personal loss. One of the major frustrations and inefficiencies under the FCA is that qui tam whistleblowers who have no personal stake in the litigation aside from a hope to collect part of the government’s take are empowered to pursue lawsuits for alleged wrongs to the government. A qui tam whistleblower can press ahead with his suit even when the government decides to forego intervention. The suit is filed, and can proceed, without any exercise of enforcement discretion by the government. Self-appointed government representatives frequently pursue accusations of supposed fraud against the government, even though the agency may not agree with the whistleblower’s view of the regulatory scheme at issue. Though DOJ can, in theory, move to dismiss a case with which the government disagrees, in practice it does not do so because it does not want to bite the hand that feeds it.

Under Section 21F, by contrast, only the SEC can pursue securities fraud litigation based on the whistleblower’s information. Whistleblowers must follow an administrative process to furnish original information voluntarily, and awards are dependent upon success of the action. But enforcement power rests finally and completely with the SEC. Since enforcement must be financed by the government, we can hope to see significantly greater control and oversight than currently exists in the FCA enforcement space.

2. More whistleblowers will be excluded under the terms of Section 21F than the FCA. The SEC rules require, in order to be eligible for any reward, whistleblowers must “voluntarily” provide the SEC with “original information” about “a violation of the securities laws that leads to the successful enforcement of an action” brought by the SEC “that results in monetary sanctions exceeding $1,000,000.”

The most significant of these restrictions is likely to be the requirement that the whistleblower’s tip be based on “original information.” Section 21F’s requirement that “original information” must derive from “independent knowledge” or “independent analysis” should help to limit the proliferation of whistleblower allegations based entirely on second-hand information or on information already known to the government – a longstanding threat under the FCA’s imprecise public disclosure bar. Under the FCA, a qui tam whistleblower is free to file a parasitic suit relying on others’ inside information, even information in the government’s possession, as long as that information has not previously been released through one of a few limited means such as federal government reports or the news media. Only if the information was publicly disclosed must the qui tam whistleblower prove he was an “original source.” Under Section 21F, by contrast, every would-be whistleblower recovery will depend on providing “original information” that is not already known to the SEC, or exclusively derived from an allegation in a judicial or administrative hearing, a governmental report, hearing, audit, or investigation, or from news media.

Another significant difference is the incentive the SEC has to enforce the “original information” requirement. Under Section 21F, whistleblowers will only recover if the SEC has brought a successful enforcement action. Section 21F defines information that “leads to” a successful enforcement action as information that is “sufficiently specific, credible and timely” to cause the SEC to launch a new investigation, or that “significantly contributes” to an existing investigation. If the SEC feels the action was based on its own labors, and the whistleblower’s whistle did not contribute to the recovery, we can expect the SEC to apply the “original information” requirement rigorously, limiting recovery to truly worthy whistleblowers. By contrast, the incentives under the FCA are for DOJ to take a broad view of when a whistleblower is an original source. Because the FCA permits whistleblowers to sue without DOJ’s intervention, the government stands to collect the majority of any recovery without doing much heavy lifting. When defendants try to knock a qui tam suit out of court on the ground that the allegations of fraud were already publicly disclosed, DOJ has an incentive to support the qui tam whistleblower’s argument that he is an “original source” and, thus, able to proceed with the case without DOJ’s involvement. In addition, courts have allowed qui tam whistleblowers to receive a share of recovery – over the government’s objection – even when they provided no new information concerning preexisting investigations.

3. A related feature of Section 21F that may reduce financial incentives for whistleblowers is that the SEC is afforded broad discretion to make award determinations. While allocation of awards to both SEC and FCA whistleblowers are predicated on similar factors, including the significance of the information and the degree of assistance provided by the whistleblower, allocations under Section 21F will occur absent district court approval. SEC whistleblower awards will be granted, in the first instance, subject to the SEC’s complete discretion, and any appeals of award amounts will be reviewed by the circuit courts, presumably under established deferential standards of administrative review. Under the FCA, by contrast, district courts have broad authority to approve FCA settlements and whistleblower rewards from settlements or judgments. The SEC’s greater authority, coupled with the fact that whistleblower awards will be paid from the same fund that finances the SEC OIG’s activities, has significant potential to temper the Commission’s generosity, and, in turn, the volume of meritless whistleblower accusations.

Despite the potential advantages of certain features of the SEC’s whistleblower provisions when compared to the FCA, the SEC rules nevertheless create enormous incentives for employees to report potential knowledge about federal securities law violations to the SEC. And because the SEC will fund the investigations and litigation, it will be virtually cost-free for lawyers to represent SEC whistleblowers. We can expect that there will be a sizeable cast of attorneys offering to prepare whistleblower submissions, wait to see what sticks, and then come in to fight for the bounty if SEC recovers anything.

It is more important now than ever that public companies invest in robust internal compliance and audit procedures to remediate wrongdoing, investigate allegations, and, when appropriate, report violations to the SEC. Our experience with the FCA suggests that many whistleblowers are employees who initially sought to address a perceived problem internally. When their intra-mural efforts were unsuccessful, the feeling of disappointment with the company’s response helped to justify and overcome feelings of guilt and discomfort at reporting the company for personal gain.

Active compliance programs, remedial measures, and self-reporting, can also significantly reduce the company’s ultimate exposure. DOJ has long-incentivized self-policing with non-prosecution agreements or reduced penalties for companies. When evaluating global settlements that implicate both civil liability under the FCA and criminal liability under related criminal statutes, prosecutors are specifically instructed to consider “the corporation’s timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation” and “the corporation’s remedial actions, including any efforts to implement an effective corporate compliance program, or to improve an existing one, to replace responsible management, to discipline or terminate wrongdoers, to pay restitution, and to cooperate with the relevant government agencies.” References to such compliance, remediation, and cooperation have become a veritable fixture in plea agreements.

Similarly, the SEC has indicated that companies will benefit by proactively addressing problems, or will be punished more severely for failure to do so. The SEC’s Seaboard Report, for example, outlines criteria that the agency will evaluate, including: “What steps did the company take upon learning of the misconduct? Did the company immediately stop the misconduct? Are persons responsible for the misconduct still with the company? If so, are they still in the same positions?” In addition, the new SEC rules encourage use of internal compliance programs. Section 21F’s 120-day relation-back provision, the expanded scope of information attributable to whistleblowers who utilize internal compliance, and the explicit financial incentive offered to whistleblowers for not hindering or bypassing internal compliance speak to the SEC’s desire to avoid displacing internal compliance programs.

The American experience with whistleblower laws has come a long way since, upon the passage of the FCA in 1863, President Lincoln derided as “worse than traitors in arms, the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the nation.” While the new SEC scheme may avoid some of the worst pitfalls of the FCA, it is essential that board members draw upon the lessons of FCA enforcement to position their companies for the new enforcement environment.

August 12, 2011 is just around the corner.

http://www.boardmember.com/blog_post.aspx?id=8589934605&blogid=1049&ekfxmen_noscript=1&ekfxmensel=eeb11f83b_30_494

AntiFraud Training

Edward Nagel — Thu, 16 Jun 2011 09:57:39 -0700

Anti-Fraud Training

After a fraud is revealed, employees invariably recognize transactions or aspects of such transactions that appeared suspicious; however, they simply did not recognize the “warning signs” that the transaction(s) were in fact fraudulent. This should come as no surprise, as most employees generally have limited, if any, formal anti-fraud training.

Check out the video “How can you prevent internal fraud?” , which includes a discussion on both preventing internal and external fraud, as well as noting the importance of anti-fraud training.

http://www.youtube.com/watch?feature=player_embedded&v=VwW-cp1I0g8

While formal written policies/procedures and internal controls are integral to an effective fraud framework, these alone may not be sufficient to identify or mitigate a fraud within an organization. Therefore, nagel + associates’ customized anti-fraud training empowers employees with the skills and tools necessary to identify the potential “red flags”; this is critical in the fight against fraud.

Learning to identify the indicators or “red flags” of fraud

Over time, we become inherently complacent about corporate policies and procedures. For example, employees may be authorized to approve transactions to a specified value, such as $5,000 or $10,000; however, consider how often, if at all, is the authorized signatory reviewed to ascertain compliance with corporate policy? Fraudsters tend to carry out transactions just below their authorization limits, in order to avoid detection; however, if they become greedy, they may exceed their threshold authorization limit, which if detected, can easily reveal a fraud.

Therefore, corporate training helps employees maintain a skeptical mindset when reviewing and processing transactions, in order to identify the potential fraud indicators.

Similarly, most auditors have limited if any formal anti-fraud training. However, given the changes to the auditing standards of the past decade, there is an expectation that auditors will consider fraud and error as part of their audit. As such, training for auditors is critical to ensure they are aware of what is fraud and how to detect it when reviewing a company’s accounting records. nagel + associates customizes such anti-fraud training to tailor to auditors’ specific requirements.

Lawyers are also required to review financial records in connection with cases, including fraud investigations, shareholder disputes and mergers/acquisitions. Similar to auditors, lawyers tend to receive limited, if any, formal anti-fraud training. nagel + associates works closely with law firms’ professional development team to design and delivers customized training for lawyers. We also deliver customized Expert Witness Training for litigators, to help them prepare to examiner and cross-examine expert witnesses.

Click Project Experience for representative anti-fraud training engagements involving Edward Nagel.

Tim Hortons Succession Hiccup

Shannon Walker — Wed, 15 Jun 2011 10:44:43 -0700

Tim Horton's has seemingly walked into a classic blunder that is surprising for such a well respected and profitable organization. With absolutely no succession plan in place and a CEO who walks out of the office, the Board of Tim Horton's is left with a vacuum in the corner office. Boards of today need to be proactive in the planning, grooming and management of their succession plans. It is Business Planning 101 and it demonstrates that even the biggest of Canadian enterprises can have significant lapses in their governance practices.

Read more here: www.financialpost.com/news/inside+change+botched/4855188/story.html

Internet Filter Bubbles An Ethical Dilemma

Shannon Walker — Wed, 15 Jun 2011 14:26:55 -0700

Click on the link below to watch a TED video that discusses the transformation and control that goes into what you see when you are on the internet. When you search for Egypt, what you may find could be entirely different than what your friend will see when they search for Egypt. ANd this is all due to the algorithms and filters created by Google, Yahoo and the other search engines. More and more of the content you see will have been customized somewhat for you based on past searches, your facebook account and what news sites you go to. This is a sense takes us to a place where information is no longer democratic or freely shared, rather you are looking at the world through a bubble created entirely for you.

http://www.wimp.com/filterbubbles/

Entreprenurial & Franchise Summit Abu Dhabi June 15 2011

Sunil Bahri, CEO - Kaizensox Consulting FZE — Tue, 14 Jun 2011 09:56:43 -0700

Dear Friends , Business Partners and Professional Colleagues

You are welcome to visit us at the Summit at Aloft , Abu Dhabi Hotel , Abu Dhabi on 15th June 2011 at 09.30 hrs

Assure you that it will be a great networking event.

Best Regards

Sunil Bahri , CEO - Kaizensox Consulting FZE

Cell : +971 55 886 8029

My Video Talk Studio

5th Annual Anti Fraud Conference 2011 17th June2011 Hyatt Regency Mumbai

Tue, 14 Jun 2011 10:41:19 -0700

Fraud is an Achilles’ heel in any organisation. It is imperative to take definitive measures to control this menace. The 5th Annual anti-fraud conference attempts to build and implement

such procedures so as to create an environment devoid of fraud and enhance the reputation, brand andFraud is an Achilles’ heel in any organisation. It is imperative to take definitive measures to

control this menace. The 5th Annual anti-fraud conference attempts to build and implement such procedures so as to create an environment devoid of fraud and enhance the reputation,

brand and image of an organisation. It is a must attend conference for Auto ancilliary, Energy, Healthcare, Oil and Gas, banking, Finance, Insurance, Telecom and technology sectors. image of an organisation. It is a must attend conference for Auto ancilliary, Energy, Healthcare, Oil and Gas, banking, Finance, Insurance, Telecom and technology sectors.

India Forensic Anti Fraud Conference - Read more...

New Whistleblower Rules Create Opportunities and Challenges at Hedge Funds

Judy Gross - Hedge Rows — Tue, 14 Jun 2011 14:57:24 -0700

As part of the Dodd-Frank Act, the SEC has just adopted a rich bounty program which gives some serious incentives to whistleblowers to report first to the SEC (and to internal compliance later). The consequences for hedge funds in particular could be onerous.

The new whistleblower program makes it easier and more lucrative than ever to report a suspicion of wrong-doing to the SEC (first-hand knowledge isn’t even required). There’s a new office at the SEC to report to (the “Office of the Whistleblower”), and whistleblowers can even do so anonymously and online through the “Tips, Complaints and Referrals Questionnaire”. There could be a big reward too: if a person provides information that leads to a successful enforcement action in which the SEC recovers a total of at least $1 million in monetary sanctions, they could receive an award of between 10% -30% of the amount recovered. The program is topped off by strong anti-retaliatory provisions against the reporting employee. What a terrific opportunity for employees, where a big payday could be just an online form away!

For hedge funds, who run lean, this presents a particular challenge, putting even more pressure on a chief compliance officer who may already be filling multiple roles, ie, Chief Financial Officer/Chief Compliance Officer. The perverse outcome of this new program is that with no incentive to come to the CCO first if a violation is suspected, the CCO is essentially pitted against the employees, rather than working together to run a clean operation. In addition, the aftermath of a whistleblower filing will likely be costly and time-consuming investigations, which a light-infrastructure hedge fund is ill-equipped to handle.

The expectation by the SEC is that they will receive 30,000 tips a year through this program. That’s a large number, and implies that these tips would not all be related to major, serious infractions. The lesser ones might have been cleaned up by internal compliance before a tip was even necessary, but unfortunately, they may not get the chance.

The Office of the Whistleblower website is located at: http://sec.gov/complaint/info_whistleblowers.shtml

http://blogs.forbes.com/judygross/2011/06/14/new-whistleblower-rules-create-opportunities-and-challenges-at-hedge-funds/

Whistleblower Comment on the News

Ian Bron — Mon, 13 Jun 2011 11:44:30 -0700

B.C. court intervenes in U.S. whistleblowing case:

Here’s an interesting whistleblowing story out of the U.S. – one with a Canadian twist. Ex-Cisco executive Peter Alfred- Adekeye is involved in a battle with his former employer following reprisals made against him for suing Cisco for forcing customers to buy a maintenance contract to cover future software-bug fixes.

Cisco appears to have used bogus criminal charges against Alfred- Adekeye to have him arrested in Canada – where he now lives – and extradited to the U.S. The irony? He had tried repeatedly to return to the U.S. but had been denied entry.

It was a clear attempt to intimidate him. Almost nothing U.S. authorities reported to Canadian police and law officials was true. The judge hearing the case in Canada was appalled: “This speaks volumes for Cisco’s duplicity,” he said, adding the company had “the unmitigated gall” to try to use the criminal process to humiliate and force Alfred- Adekeye to abandon a civil suit.

We shouldn’t pat ourselves on the back for being Alfred- Adekeye’s saviours, though. Canada has a track record for prosecuting its own whistleblowers. What saved Alfred- Adekeye was that the Canadian judge was truly independent of the case – in a completely different country. I’m sure that if a Canadian whistleblower was able to have his case heard in a U.S. court, the result would be similar.

http://canadians4accountability.org/blog/2011/06/08/whistleblower-comment-on-the-news-june-8-2011/

SEC adopts whistleblower rules

Canadian Securties Law — Fri, 10 Jun 2011 14:15:35 -0700

The U.S. SEC has now adopted a revised final rule designed to award whistleblowers who voluntarily provide original information to the SEC regarding violations of securities laws where the enforcement action leads to monetary sanctions totalling more than $1 million. The rules also seek to support internal compliance programs by making a whistleblower eligible for an award if the information is reported internally but results in the company informing the SEC about the violations. As we discussed in November 2010, the SEC released a draft proposal last year, and the final rule reflects changes made in response to public comments on the draft.

The provisions may be of particular interest to Canadian companies since, while foreign officials and employees of state-owned enterprises are excluded from the whistle-blower program, employees of foreign companies could be eligible for rewards.

http://www.canadiansecuritieslaw.com/2011/06/articles/international-developments/us/sec-adopts-whistleblower-rules/

Squeezing Toxin From Your Workplace

Shannon Walker — Wed, 08 Jun 2011 15:50:54 -0700

An interesting article in the Globe & Mail concerning identifying toxic employees and how to get them out of workplace. A good tool to finding these potential landmines is through the implemenatation of confidential hotline. The article addresses what to do with them once you find them.

http://www.theglobeandmail.com/report-on-business/small-business/business-categories/human-resources/squeezing-the-toxin-from-your-workplace/article1990096/

Falsified Invoices for Services Not Rendered

Shannon Walker — Tue, 07 Jun 2011 16:10:12 -0700

Shannon Walker, President of WhistleBlower Security writes: Today I received a trademark notification invoice for $1615.00. The oddest thing about it was that our proposed logo was a cartoon bear eating a fish. Not much to do with our business. Our accounting department put it on my desk for approval. This is the second time in two months I have received one of these falsified invoices for services not rendered. I googled the company and found the blog below which was posted two years ago.

The company is actually registered in to Monika Kindle in Balzers, Liechtenstein and the fee is to put your trademark (real or fake) on their web registry. It has nothing to do with actually registering your trademark.

BEWARE of unsolicited invoices from companies you are unfamiliar with. This type of mail fraud is becoming more and more common.

http://www.thelogofactory.com/logo_blog/index.php/trademark-infonet/

FREE Seminar Dubai Quality Groups Finance Banking & Regulations Sub Group

Dubai Quality Group — Mon, 06 Jun 2011 09:26:15 -0700

You are invited to attend a
FREE Seminar
organized by Dubai Quality Group’s

Mr. Ian Godfrey
Director – CIP Auto , London , UK, Will speak about “ Cost reduction and performance improvement in Automobile Sector” And Mr. Ray Perry Executive Director , CIMA (Chartered Institute of Management Accountants) London ,UK Will speak about “Building World Class businesses for the long term “

Date: 07th June 2011
Time : 6:30 pm – 8:30 pm
Venue : Park Regis Hotel, Opposite Burjuman ,Dubai

(Location map attached)

About Seminar:
(CIP) Development Services has specialized in developing continuous improvement process as a business model in developing Business Processes in Automobile Industry with a special emphasis on Dealership Programs. This has been perfected by continuous trainings, innovative projects management, workshop level programs – All leading to Cost Reduction and ultimately Profit enhancement on a global basis.CIP Development Services is a global leader and Advisors to the Motor Industry and operates in Europe, Middle East and Australasia and other countries
(CIMA)The severe recent economic turbulence has brought new urgency to the age-old debate about how business fits into society. To help push the debate forward, CIMA is set to publish a ground-breaking report, at its world conference in South Africa at the end of October. And, during this event we will giving you a preview of the report’s key findings on how can we build world-class businesses that are equipped to deal with the long term challenges and opportunities that lie ahead. Attend our event to find out more.

About Speakers:

Ian enjoyed a service apprenticeship with General Motors after which he was responsible for both marketing and service for various regions in the UK. He then became responsible for Dealer Development throughout Africa covering all aspects of General Motors' vehicle operations for that continent. Following this, Ian spent three years with a UK export house during which he continued to travel extensively and became deeply involved in Aid financed business throughout the world, as well as local assembly operations. He then spent nearly four years working for a multi-franchise dealer/distributor in the Middle East being responsible for setting up their after-sales operations and a Dealer network throughout Saudi Arabia before being asked to move across to assist with developing their marketing operations. Since 1995 Ian has been using that breadth of experience to the benefit of CIP clients throughout the world.

Ray is Executive Director of Brand, Profile and Marketing at CIMA. He is responsible for global brand development across CIMA’s markets including Malaysia, Singapore, Sri Lanka, China, Hong Kong, India, Southern Africa, Ireland and the UK. This involves marketing, communications and PR functions and responsibility for CIMA’s award winning website. He is currently Editor-in-Chief of CIMA’s monthly magazine, Financial Management, one of the largest finance magazines in the UK. Ray has over 25 years' experience in Sales and Marketing at Dunlop plc, Swan House wares and Electrolux and has been a director of Spears Games, Mattel and the Chartered Institute of Marketing (CIM), where he was Chief Executive of the eCentre.

Please confirm your attendance with Mrs. Dima Ziad on 04-3431950 / dima.ziad@dqg.org

This Summer Be Wary of Fish Fraud

Ted Danson — Fri, 03 Jun 2011 11:10:04 -0700

Shannon Walker - President of WhistleBlower Security says: "As we are based on the west coast of Canada, this is an interesting article on on fish fraud that can affect you every time you order fish. Yet another issue to be aware of when dining out."

This Summer, Be Wary of Fish Fraud

It's almost summer, which means many of us will be heading to beaches -- and seafood markets and seaside restaurants -- in the coming months. Maybe you'll use a sustainable seafood guide to make a smart choice for your family. But what if the fish you find in the market isn't what you think it is?

According to a new report by Oceana, U.S. consumers are frequently served a completely different fish species than the one they paid for. "Bait and Switch: How Seafood Fraud Hurts Our Oceans, Our Wallets and Our Health" reveals that seafood may be mislabeled as often as 25 to 70 percent of the time for fish such as red snapper, wild salmon and Atlantic cod.

Using DNA testing, both scientists and amateur seafood sleuths have exposed fish fraud across North America and Europe. So how does it happen? While more than 80 percent of U.S. seafood is now imported, a small fraction of 1 percent is inspected by the Food and Drug Administration specifically for seafood fraud, and fraud can happen at each step of the supply chain -- the restaurant, the distributor, or the processing and packaging phase.

Plus, seafood consumption around the world continues to rise, as do the incentives to overfish the oceans and mislabel fish as more expensive species. As Oceana's Vice President for North America and chief scientist Dr. Mike Hirshfield told the New York Times, "If you're ordering steak, you would never be served horse meat. But you can easily be ordering snapper and get tilapia or Vietnamese catfish."

Not only does seafood fraud affect your bottom line, it also has serious consequences for your health -- and the health of the oceans, too. Here's how:

1. Seafood fraud can make people sick. Fish species might be swapped for another that could be riddled with allergens, toxins or contaminants.

2. Mislabeling fish makes it difficult for consumers to make eco-friendly choices. Market-driven conservation efforts -- like those seafood guides I mentioned earlier -- depend on the consumer's ability to make an informed purchase of particular species.

3. Seafood fraud misleads consumers about the true availability of seafood and the state of the marine environment. Mislabeling maintains the appearance of a steady supply of popular fish species despite possible overfishing.

4. Seafood fraud creates a market for illegal fishing by making it easy to launder illegally caught seafood products through the U.S. market. This undermines conservation efforts to prevent overfishing and accidental catch of marine wildlife and hurts honest fishermen.

So this summer, whether you're on the coast or not, familiarize yourself with some of the commonly mislabeled fish species from Oceana's seafood fraud report. And ask lots of questions when you're buying seafood: What kind of fish is this? Is this farmed or wild caught? Where was this fish caught? When was this fish caught?

Meanwhile, Oceana will be working to convince the U.S. Food and Drug Administration to implement a tracking system for fish that can trace seafood from your plate back to its original source. Together we can ensure that seafood in the U.S. is safe, legal and honestly labeled.

Ted Danson is on the board of directors of Oceana, the international ocean conservation organization. He recently published the book "Oceana: Our Endangered Oceans and What We Can Do to Save Them." http://www.huffingtonpost.com/ted-danson/this-summer-be-wary-of-fi_b_870298.html

The WhistleBlower service, is a streamlined, cost effective method to meet the mandatory requirements for secure employee communication tools within companies today.

US fines bank officials for moneylaundering lapses

Thomson Reuters Accelus, Randall Mikkelsen — Wed, 01 Jun 2011 08:53:27 -0700

ST. LOUIS, May 24 (Thomson Reuters Accelus) - A U.S. banking regulator has fined four board members of Pacific National Bank and its former chief executive for failing to correct anti-money laundering problems, an apparent sign of a new focus on individual accountability for such lapses.

The federal Office of the Comptroller of the Currency (OCC) disclosed the fines two months after regulators fined the Miami-based bank itself $7 million for failing to correct deficiencies noted in 2005 in an enforcement action.

Pacific National is a subsidiary of Ecuador's state owned Banco del Pacifico S.A. U.S. officials consider Ecuador to be deficient in its control of money-laundering and terrorism financing.

The individual fines, believed to be a first, were levied in April against Pacific National's Chairman Andres Baquerizo; Jose Baloyra, Eduardo Gross and Joaquin Urquiola -- board members who served on the institution's Bank Secrecy Act compliance committee -- and Ralph Fernandez, the bank's former chief executive officer.

Baquerizo and Fernandez were each fined $12,500 and the others were fined $8,500.

Peter Djinis, a former a federal prosecutor and a regulatory policy official at the U.S. Treasury's Financial Crimes Enforcement Network, said bank regulators have long threatened to fine bank board members or senior executives who fail to address money-laundering control problems.

This is believed to be first time they have actually done so, he said.

"I think this is highly significant and will certainly put the fear of God in them," he said. "It is one more reminder that the government considers AML (anti money-laundering) controls a very high priority."

When the OCC concluded its 2010 examination of Pacific National, it found "that the bank not only had the same deficiencies but also new deficiencies" in its AML regime, the penalty orders state. The orders hold the men personally responsible for failing to act in their official capacities to correct the failures.

Thomson Reuters Accelus reported earlier this month that the U.S. Justice Department is probing the U.S. arm of banking giant HSBC Holdings to determine whether it violated AML laws, or other federal laws, by handling bulk cash received from money-changing firms in Mexico.

The concern is that the HSBC unit may have handled money belonging to Mexican drug cartels. The source added that Justice Department investigators are planning to bring criminal charges against bank employees, where appropriate, to ensure that individuals are held accountable.

http://www.reuters.com/article/2011/05/24/us-financial-moneylaundering-idUSTRE74N62S20110524?goback=%2Egde_66889_member_56080636

Do you have a Whistleblower Policy?

Investors Exploit Reporting Rules To Hide Stock Buys

Brendan Sheehan, NACD Directorship — Wed, 01 Jun 2011 09:46:39 -0700

The SEC has missed a prime opportunity to revamp shareholder reporting rules and level the playing field for hostile takeover activity – at least in the eyes of some influential market participants. As part of its desire to modernize the beneficial ownership reporting structure, the SEC asked for comment letters on its proposal to update Section 13D of the Securities Exchange Act. Despite widespread concerns about the treatment of security-backed swaps and the 10-day disclosure rule, the SEC is broadly sticking with the status quo.

In March, and again on April 15, prominent law firm Wachtell, Lipton, Rosen & Katz proposed in its comment letters to the SEC that the current 10-day reporting deadline be shortened and the definition of beneficial ownership be expanded. “We believe that the current reporting regime fails to fulfill its stated purposes,” Wachtel lawyers wrote in the letter filed with the SEC on April 15. The law firm believes that investors, issuers and the market as a whole would benefit from such changes.

“There is no valid policy-based or pragmatic reason the purchases of significant ownership stakes in public companies should be permitted to hide their actions from other shareholders, the investment community and the issuer; indeed the need for transparency, fairness and equality of information in our financial markets has never been higher,” Wachtell reasoned.

“Changing the 10-day disclosure rule is part of the larger project that the SEC is undertaking to modernize the rules. Dodd-Frank has a provision that gives the SEC the authority to close the reporting window and it is on the slate. We propose that the period is changed to one-day. Our most recent comment letter reaffirms our call for a broader review of the shareholder disclosure system,” says Eric Robinson, Partner in the corporate practice at Wachtell.

This argument is not new. In fact, many different groups have raised concerns over the 43-year-old reporting rules, including the SEC. Michele Anderson, chief of the SEC’s Office of Mergers & Acquisitions, told MarketWatch that she has plans to recommend that the number of days activist investors have before they must publicly disclose they have a five percent stake in the company be shortened. Existing timeframes for disclosure have been in place since 1968 as part of the Williams Act.

“The staff believes that period may be outdated, it has been in place for over 40 years now, and we have concerns that it may provide opportunities for investors to obtain a sizeable stake in the company before they are obliged to make any public disclosure,” Anderson said in February.

Investors are now able to execute trades in seconds and it is possible to prepare ownership reports in very short periods of time. Many investors can—and do— exploit the 10-day reporting gap to secretly acquire more stock in the company, hidden from the issuer and market at large.

Bruce Goldfarb, founder and CEO of Okapi Partners, a proxy solicitation firm, sees pros and cons on both sides. “I think it will mean activists will find that it is harder to quickly accumulate a position and for investors to build up an investment before there is additional market movement. Some investors purport this to be a real issue with activism. I think there is some truth to that.”

Some market participants complain that the lag in reporting requirements allows an investor to accumulate large voting interests before disclosure is made that would impact the price of the stock and that this is not fair.

“I think it will impact some investors in their interest and ability to rapidly accumulate shares at a price they believe to be good value. I agree with investors that say expediting the reporting timeframe will impact their ability to accumulate a large position. Without a value judgment of whether that is a good thing or a bad thing there is absolute truth that faster reporting will move markets. We have already seen that when people file a 13D. It has an effect depending on who the investor is and what position they are taking. So if you are accelerating that follow-on effect it is going to have an impact,” explains Goldfarb.

With changes to the director election process these reporting requirements can be of real and significant importance to directors. “I have empathy for companies that are trying to figure out who owns their shares. The process as it stands now does not help issuing companies or other investors to have an understanding of who the owners are of a company. If you are a director and trying to act in the best interest of shareholders yet you don’t always know who those holders are, it creates a serious conundrum.”

Changing the system is not without problems. Some investors feel that the current reporting regime is burdensome and compliance too time consuming. Even though trading platforms have accelerated and news is distributed faster, the 13D process hasn’t kept pace. It is, in the eyes of some investors, faster to accumulate the shares than it is to report exactly what holdings they have.

“I have empathy on both sides and I think that while the board may appreciate the changes, I don’t know how well received it will be by the investors community. Not just by activist funds but by traditional investment management firms that are heavily burdened sometimes by the reporting requirements,” cautions Goldfarb.

In an April 15 release the Commission left unchanged reporting requirements under 13D(c) for derivatives such as convertible instruments (that can result in accumulating a “stealth” voting position).

While the SEC made no change at this stage to security-backed swaps it is still considering shorting the disclosure window as part of a broader review of beneficial ownership disclosure.

Is your company SEC compliant?

SEC Implements New Whistleblower Rules

Dave Lindorff — Tue, 31 May 2011 16:27:25 -0700

The Securities and Exchange Commission this week adopted a new set of rules that implement the controversial whistleblower provisions of the Dodd-Frank Financial Reform Act, rules which are designed to encourage the reporting of serious financial fraud within financial institutions and other corporations by offering substantial rewards or bounties to the whistleblowers.

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Adopted by a 3-2 vote of the commission, the new rules, which can award a whistleblower a bounty of up to 30% of any recovery or monetary sanctions of over $1 million resulting from a whistleblower’s significant tip, are expected to lead to a marked step-up in enforcement actions by the financial regulatory agency.

Prior to the Dodd-Frank Act, whistleblower bounties were limited to 10%, were rarely awarded, and only applied to insider trading cases. The new bounty system applies to a wide range of financial frauds that violate SEC rules.

The newly adopted whistleblowing regulations, which will take effect 60 days after publication in the Federal Register, go even further than the enabling legislation to encourage whistleblowing by employees in financial institutions, adding rules that protect against retaliation by employers.

For example, under the new SEC rules, whistleblowers are protected from employment retaliation if they have a reasonable belief that the information provided relates to a possible SEC law violation that has occurred, is occurring or is about to occur. They are also protected from threats by employers to enforce a prior confidentiality agreement.

The rules encourage potential whistleblowers to make use of internal systems for reporting frauds and violations of SEC laws. For example, if an employee reports a fraud through corporate channels to superiors, and then the company brings the matter to the SEC, the employee is still considered a whistleblower by the SEC, and is both protected by anti-retaliation rules and is still eligible for a bounty.

Employees are not required to first report problems through internal channels before approaching the SEC.

“For an agency with limited resources like the SEC, it is critical to be able to leverage the resources of people who may have first-hand information about violations of the securities laws,” said SEC Chairman Mary L. Schapiro, in a statement made following adoption of the new rules.

Schapiro said the quality of tips received by the agency has already improved since the adoption of Dodd-Frank, adding that, "we expect this trend to continue, and these final rules map out simplified and transparent procedures for whistleblowers to provide us critical information."

http://www.financial-planning.com/news/SEC-whistleblower-rules-fraud-2673545-1.html

Corporate Whistleblowers Gain Legal Rights But Remain a Wasted Asset

Tarek Maassarani and Tom Devine — Mon, 30 May 2011 15:18:06 -0700

Largely under the public radar screen, the last decade has seen a legal revolution in corporate freedom of speech. Ironically, private sector whistleblowers now have far stronger rights than government employees to challenge institutional abuses of power that betray the public trust.

The implications are significant from every direction. To illustrate, citizen groups can work more freely with whistleblowers as the public's eyes and ears. Corporations who cling to repressive traditions risk unprecedented consequences. And there will be new opportunities to prevent avoidable disasters and attack internal fraud for leaders who listen to their messengers, instead of professionally killing them.

The breakthrough in corporate freedom of dissent began in 2002 with the Sarbanes Oxley law ("SOX"), which protected shareholders of publicly-traded corporations from unscrupulous managers who risked their investments through fraud. It since has spread to ten other major laws, covering the vast majority of the labor force -- the financial, transportation, health care, defense contractor, nuclear and food industries, as well as all retail commerce. The laws consistently protect workers who publicly or privately challenge wrongdoing, provide recourse through fair rules of play, offer jury trials if there is no speedy administrative decision, provide compensatory damages to make reprisal victims whole, and shield against gag orders or the waiver of legal rights required by many firms as a prerequisite for employment.

The potential benefits to the public are staggering. Even without rights, courageous whistleblowers have forced the withdrawal of dangerous prescription drugs such as Vioxx, whose 50,000 victims rivaled America's casualties in the Vietnam War; shut down toxic incinerators burning dioxin, arsenic and other poisons next to churches and schoolyards; prevented countless food poisoning epidemics at the hands of a deregulated government inspection regime; and abated nuclear power plant accidents and massive releases of radiation into urban water supplies.

The stakes are equally high for corporations. Consider Enron attorney Sherron Watkins' warning to Chief Executive Officer Ken Lay that the company would go bankrupt if it did not stop cooking the books. Mr. Lay order her terminated. Enron subsequently went bankrupt, and Lay died in disgrace before he could go to jail. At MCI, by contrast, the Board's Audit Committee listened to auditor Cynthia Cooper when she blew the whistle on similar fraud, and the firm survived. It is bad business to gag the miner's canary.

Some corporate leaders fear that whistleblower rights mean more public scandals. But employees overwhelmingly choose to work within the system. An Ethics Resource Center survey found that 96% of corporate whistleblowers first make their disclosures within the company, instead of breaking ranks. Despite the risk of retaliation, workplace loyalty and trust runs deep.

These employees are a wise executive's best resource. Whistleblowers can prevent unnecessary tragedies that blindside managers when it is too late for anything except damage control and scapegoating. Consider the repeated warnings of BP whistleblowers, which could have prevented the Gulf Oil spill, but went unheeded. A PricewaterhouseCoopers survey of 5,400 companies in 40 countries found that 40% were victimized by serious economic crimes averaging over $3 million in losses. Whistleblowers exposed 43% of this fraud -- more than corporate security, internal audits, and law enforcement combined. A corporate cultural revolution needs to join the legal one, or American companies will continue to waste their most significant dormant resource -- the labor force.

The legal revolution is a work in progress. Coherence is still lacking, with the 36 laws passed before 2002 creating a crazy patchwork of inconsistent hit-or-miss legal rights, often within the same company. Further, the legal revolution only has modernized rights for those who can afford a due process administrative hearing or jury trial in court. Most unemployed whistleblowers can't. They are limited to token investigations by the Occupational Safety and Health Administration, which rubber stamped retaliation in 98.6% of SOX cases from 2002 to 2008.

While there is a more work to be done, changes from the last decade have taken root. Whistleblowers have long felt they were "committing the truth," because they were treated like those who commit the crimes. But as a rule, the law is now on their side. The next challenge is for America's corporate leaders to listen to them.

Tom Devine, legal director at the Government Accountability Project, and Tarek Maassarani are co-authors of the recently-released Corporate Whistleblower Survival Guide: A Handbook for Committing the Truth.

Event Dubai Quality Group Banking Finance & Regulations Sub Group Networking Event

Sunil Bahri — Thu, 26 May 2011 09:45:35 -0700

Date:

Starts:	Tuesday June 07, 2011at 06:00PM GST
Ends:	Tuesday June 07, 2011at 09:00PM GST

Location: Hotel Park Regis opposite Bur Juman , Dubai, Dubai, DUBAI AE

Organizer: Sunil Bahri, Director of Finance at Dubai Quality Group, United Arab Emirates

Joint Networking Event with Horwath Mak , Chartered Accountants , Dubai , UAE. Global Speakers include : - Mr Ian Godfrey , Director , CIP Auto , UK - Financial Performance Improvement - Automobile Industry - Mr Ray Perry , Executive Director , CIMA (Chartered Institute of Management Accountants ), UK - Building World Class businesses for the long term.

Sunil Bahri, Director Finance , DQG & Chairman of Banking,Finance & Regulations Sub Group invites all to the Event

http://events.linkedin.com/Dubai-Quality-Group-Banking-Finance/pub/680382

http://www.kaizensox.com/

Job Vacancy VP Cash Management Compliance

Michael Page — Tue, 24 May 2011 15:03:00 -0700

Company
Michael Page
Location
Jersey City, NJ, 07097
Compensation
Competitive Salary, Bonus and Benefits
Position Type
Permanent
Employment type
Full time
Updated
May 24, 2011
eFC Ref no
820244

This is an exciting and broad based role where you will be responsible for providing compliance advice and support to the cash management, trade and fund services business

The role:

The focus primarily will be on supporting the cash management, US Dollar payment and account services business.

You will be responsible for but not be limited to:
* Providing day to day advice and working with the business through the introduction of new products
* Draft policies and procedures
* Risk assessment
* Responding to regulatory requests
* Training
* Identification and resolve of AML issues

This is an opportunity to join a leading business and very talented compliance team.

Experience:

The successful candidate will have strong CASH settlement background and be familiar with 103, 202 and ACH payments. Ideally you will have a minimum of 10 years and preferably have gained this experience in a compliance role supporting the cash management business. Candidates with a strong operational background and desire to move their career in to compliance and undertake a compliance role will also be considered.
Candidates must have a minimum of a Bachelors degree and be familiar with USD payment systems and SWIFT.

http://jobs.efinancialcareers.com/job-4000000000808105.htm

The Victims of Insider Trading

Jeff Madrick — Thu, 19 May 2011 09:20:33 -0700

Shannon Walker, President of WhistleBlower Security comments: The claim that there are no victims in insider trading scandals is a very weak argument. Here is an posting that describes why insider trading on the scale especially as executed by Wall Street players, need to be addressed. Going after individuals involved in one trade, as the SEC did recently, - and jailed a 71 one year old man who made $30,000 on a single trade seems completely incongruous with ignoring the major players on Wall Street who are walking away with multi-million dollar trades as in the case of Rajaratnam. The investors who suffer based on the insider moves of these Wall Street executives are in the thousands and these are the people who need to be prosecuted. Prosecutors need to be focused in bringing down the bad guys.

http://www.huffingtonpost.com/jeff-madrick/the-victims-of-insider-tr_b_863111.html

Jeff Madrick - Nothing surprises me more than when I read that trading on insider information is a victimless crime. In the wake of the conviction of hedge-fund giant Raj Rajaratnam, the claim has come up time and again. In fact, it is entirely untrue. The victims are all those who sold Raj a stock or other security at a lower price than they might have if they had the same information he had. In other words, the victims are pensioners, mutual fund investors, bank trusts holders, and on.

It's like what happened in the 1800s when some insiders knew the railroad had planned to build a track through a certain territory. They bought land from unsuspecting farmers, ranchers and maybe even the federal government on the cheap. That activity disgusts us. Same with stocks when the fund managers know about good earnings news to be reported the next day or a merger announcement to come.

What the details of the Rajaratnam scandal also shows is that he who pays the most money for inside information also makes the most money. Money begets money, the big get bigger. That's a pretty good example of what's happened over the past thirty years in American finance.

Now, when you can leverage that money up -- borrow to the hilt at low rates -- inside information really pays off. Many hedge-fund managers don't make money for the insights but for their sheer chutzpah. Meantime, market integrity is out the window.

Wall Street's always had some kind of advantage over the rest of us. The pros could often call someone up at a company to get an edge. But passing out outright inside information -- the kind that will move a stock price one way or the other substantially -- should clearly be illegal.

One of the more interesting facts about hedge funds is that, according to those who measure risk statistically by deriving 'betas' and 'alphas,' they do better on average than the amount of risk they take suggests they should. Mutual funds on average do not.

Some interpret this as proof of how astute the hedge funds are compared to other investors. The data could also be interpreted another way. That given their size and wealth, they have more information about company strategies and results, takeovers, and the trading patterns of the market. They may even be able to push prices their way and bail out before others catch on. Cornering markets can be against the law. How often does "mini-cornering" -- momentary attempts to buy enough supply to determine a quick price change -- go on? That's perhaps the main reason why they do better than the risk they take suggests they should.

This is seedy stuff and there is no simple way to prevent it adequately. If such practices are common, it makes good sense for investors who have the money to sign up with hedge funds and get a piece of their unfair advantage.

On the other hand, some hedge funds are totally honest. How can we tell which ones make it on smarts, good instincts and genuine preparation? Only if the government aggressively cleans up the act. Fear of prosecution is perhaps the only effective weapon.

Meantime, good money flows to funds, often unwittingly, who exploit and take advantage -- and that only distorts the efficient allocation of capital in America.

Cross-posted from New Deal 2.0.

http://www.huffingtonpost.com/jeff-madrick/the-victims-of-insider-tr_b_863111.html

Whistleblower Hotline Services Anonymous Corporate Ethics Reporting Service

Shannon Walker — Thu, 19 May 2011 15:06:40 -0700

Contact WhistleBlower Security today and get a free demonstration of our proprietary compliance & ethics reporting software. Can you afford not to? info@whistleblowersecurity.com

Vacancy Financial Controller

JobsInRisk.com — Wed, 18 May 2011 10:30:45 -0700

Job Title: Financial Controller
Reference: JO-MPFC-811
Salary: £70000 - £85000 per annum + benefits
Location(s): City of London
Industry(s): Financial Services
Advertiser: Kennedy Pearce Consulting Ltd
Employment Type: Permanent
Posted: 18-05-2011

Job Title:	Financial Controller
Reference:	JO-MPFC-811
Salary:	£70000 - £85000 per annum + benefits
Location(s):	City of London
Industry(s):	Financial Services
Advertiser:	Kennedy Pearce Consulting Ltd
Employment Type:	Permanent
Posted:	18-05-2011

Description:

The Financial Controller will be involved in the financial management of client entities to include:

Management accounting:
Providing support to the accounts assistants on a day-to-day basis
Performing a detailed review of accounting ledgers prepared by others
Preparing monthly management accounts
Preparing/reviewing monthly management fee accruals/invoices

Fund accounting:
Reviewing fund monthly net asset valuations
Coordinating the annual fund audits including related taxation reporting (K1s, PFICs, Fin 48)

Regulatory:
Calculating monthly capital adequacy and preparing quarterly and bi-annual financial regulatory returns in accordance with FSA rules
Filing FSA returns via Gabriel system

Budgeting/scenario analysis:
Preparing annual budgets and interim forecasts (P/L , balance sheet, cash flow, capital)
Calculating breakeven assets under management
Monitoring liquidity and performing related stress tests, cost to close analysis

Financial accounting:
Preparing statutory financial statements according to UK GAAP, US GAAP and IFRS
Co-ordinating client annual audits to meet regulatory deadlines

Tax:
Providing information to tax agents, reviewing resultant tax computations and ensuring tax returns are filed within requisite deadlines

General:
Assisting others within the team who may require financial information to complete tasks, e.g. insurance renewals, completion or revision of ICAAPs, filing annual returns
Researching and presenting specific technical areas of accounting
Documenting complex or non-standard procedures
Ad hoc projects
Building client-relationships

Qualifications:

Accountancy qualification
Strong PC skills including advanced Excel, Word, Power-point, Sage Line 50,
Experience in financial services, ideally a fund environment
Knowledge of compliance issues

http://www.jobsinrisk.com/risk-job/Financial_Controller/38256

Deputy Director Accounts New York Headquarters

UNICEF — Wed, 18 May 2011 10:58:05 -0700

Deputy Director, Accounts

If you are qualified to mentor a team of senior technical professionals and work in partnership internally across UNICEF and with external partners to achieve tangible results for the most disadvantaged and excluded children worldwide, we are interested in receiving your application.

For 60 years, UNICEF has been hard at work in 190 countries and territories for the survival, development, protection and participation of children. UNICEF supports programmes for maternal, newborn and child health and nutrition, water, sanitation and hygiene, early childhood development and quality basic education for boys and girls and protection from violence, exploitation, HIV/AIDS and harmful practices.

We are looking for a Deputy Director to lead the accounting function in the Division of Financial and Administrative Management (DFAM) in our New York Headquarters.

Description:
Reporting to the Comptroller, s/he will be an active leader in the finance team, with responsibility for:
• the establishment and implementation of the accounting policy framework and technical accounting advice, and
• the design, development and support of key financial reporting procedures and systems which provide for the protection and safeguarding of assets and the prudent use of resources.
S/he will:
• plan, organize and direct the activities of the accounting function,
• provide leadership for financial statement preparation in compliance with applicable standards and regulations and for financial analysis, reporting and decision-making support for key business activities,
• partner with key internal stakeholders to instill a financial mindset across the organisation and
• represent organisational interests with external government, donor and UN system stakeholders.

Requirements:
• Professional accounting designation (Chartered Accountant, Certified Public Accountant or equivalent qualification) or advanced university degree in accounting, finance, or business administration.
• At least 12-13 years of professional accounting experience with the last 5 years at a managerial level.
• Practical understanding of IPSAS, International Accounting Standards (IAS) and/or International Financial Reporting Standards (IFRS).
• Demonstrated experience with financial management and accounting system applications and system conversion preferred.
• Excellent communication and negotiation skills.
• Fluency in English and another UN language, proficiency in French or Spanish advantageous

To apply, please send a letter of application and an updated Curriculum Vitae as well as a duly completed United Nations Personal History form to: recruit.SSR@unicef.org quoting vacancy reference 'Deputy Director Accounts'. If your application is shortlisted for this vacancy you will be notified.

The deadline for applications is 3 June 2011.

UNICEF is committed to diversity and inclusion within its workforce, and encourages qualified female and male candidates from all national, religious and ethnic backgrounds, including persons living with disabilities, to apply to become a part of our organisation.

http://www.unicef.org/about/employ/index_58515.html

Internal Auditor Washington DC WHO

World Health Organization — Wed, 18 May 2011 11:59:22 -0700

Vacancy Notice No: PAHO/11/FT168 Title: Internal Auditor Grade: P4 Contract type: Fixed-Term Appointment Duration of contract: Two years, first year probationary period	Date: 13 May 2011 Application Deadline: 10 June 2011 (23 day(s) until closing deadline) Currently accepting applications Duty Station: Washington, D.C., United States of America Organization unit: AM Americas (AM) Office of Internal Oversight and Evaluation Services (IES)

OBJECTIVES OF THE PROGRAMME : The mission of the Office of Internal Oversight and Evaluation Services (IES) is to provide independent, objective assurance and advisory services to the Director of PAHO designed to add value to and improve PAHO's operations. IES helps PAHO to accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of processes for risk management, control, and governance. The internal oversight functions provided by IES include internal audit, evaluation, and financial and operational investigations.
Description of duties: Under the direct supervision of the Auditor General, Office of Internal Oversight and Evaluation Services (IES), the incumbent is responsible for, but not necessarily limited to the following duties: a) Contribute to the Office of Internal Oversight and Evaluation Services (IES) risk assessment of the Organization's internal audit universe; b) Execute internal audit assignments in the areas of internal control, risk management, and financial, administrative, and operational processes and systems; c) Assess the suitability, cost-effectiveness, efficiency, and effectiveness of internal controls; d) Determine the extent of compliance with established regulations, rules, policies and procedures; e) Examine the reliability and validity of accounting, financial and other data, and report any deviations; f) Review implementation and performance of accounting systems in order to assess reliability in respect of producing accurate accounts and records of transactions; g) Review the conformity of obligations and expenditure with appropriations or other financial provisions; h) Prepare internal audit reports that contain findings and recommendations for remedial action or improvement; i) Discuss internal audit recommendations and findings at the close of audit assignments with concerned staff members; j) Contribute to the IES process of tracking, following up, and reporting on the implementation status of IES recommendations, with interaction with staff members to encourage appropriate action; k) Perform other professional oversight work, including investigations, reviews, spot checks, and ad-hoc advice, under the instruction of the Auditor General. l) Present and communicate the results of work performed to staff at all levels in the Organization. m) When called upon to directly supervise staff, establish clear work objectives, conduct timely and effective performance appraisals, provide coaching and feedback, and support staff development opportunities; n) Perform other related duties as assigned.
REQUIRED QUALIFICATIONS
Education: A bachelor's and master's degree in public or business administration, auditing, finance or other related area from a recognized university. In lieu of a master's degree, a professional certification of Certified Internal Auditor (CIA), Certified Public Accountant (CPA) and Chartered Accountant (CA) from an internationally recognized oversight body.
Skills: Key Behavioral Competencies -- Intra-institutional Action: Operates in a fair, consistent and equitable manner, and displays such behavior by example. Ensures that the mission and the values of the Organization as well as the setting in which projects will be carried out are the drivers in one's technical work. Understands the results required and performs to that standard. Behaves consistently in accordance with the Code of Ethics of the Organization. -- Communication: Leads the development of an environment that actively establishes and proactively engages in productive dialogues that involve multicultural environments. Encourages the skills and behaviors that facilitate productive dialogues. Expresses points of view effectively. -- Performance Management: Plans and takes concrete steps on one's own initiative to improve job performance and required competencies. Learns from one's mistakes, adjusts goals and courses of action to meet changing needs. Conducts evaluation meetings with subordinates at the times stipulated, using the Organization's instruments and others specific to the area. Consistently motivates the staff members to improve their abilities, gives them tasks and activities that represent a challenge to them. -- Teamwork: Embraces and leads consensual decision-making, that is, leading the fulfillment of team decisions, even when they may not fully coincide with one's own opinions or proposals. Knows how to manage difficult team situations and promotes consensus building. Takes responsibility for the team's successes and failures. -- Information Management: Processes and analyzes the data objectively, presenting it clearly and equitably. Leads the effort to acquire relevant and selected information that facilitates the achievement of organizational results. Evaluates/leads the evaluation of information systems on the basis of its advantages/disadvantages for processing information relevant to the area of work. -- Accountability: Accepts responsibility for the results, for the work of subordinates, for the tasks delegated, the deadlines, and any deviations from them. Requires and oversees the adherence according to the budget. Monitors the progress made upon reaching the objectives and deadlines. For any deviations on the work plan, looks for corrective actions. -- Analysis, Synthesis, and Forecasting: After analyzing situations on the basis of the available evidence and knowledge, leads one's area of responsibility toward individual and collective actions. Encourages the importance of continual analysis. Verifies and promotes that action is taken in situations that will require future intervention, based on ongoing analysis. Leads others in decisions needed to implement required actions. Is capable of anticipating the implications of analyzed situations between one and two years ahead. Technical Expertise -- Thorough knowledge of internal auditing and investigative practices, procedures, and principles, and their application; -- Thorough understanding and familiarity with the International Professional Practices Framework of the IIA and with the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework; -- Broad knowledge of operational, administrative, managerial and financial matters; -- Strong time-management skills, including the ability to plan and perform assignments on time and within budget; -- Broad knowledge of strategic, budgetary, and financial planning processes in international organizations; -- Strong professional oral and writing skills, including the development of reports, oral presentations, and technical/persuasive documents for consideration at the highest levels of the Organization. IT Skills Demonstrated ability to effectively use a computer and utilize software programs such as Microsoft Office Word, Excel, PowerPoint and Outlook. Knowledge of other software programs - such as Visio - would be an asset.
Experience: Nine years of combined national and international professional experience in internal auditing. Demonstrated experience and knowledge of risk-based internal auditing and in applying the International Professional Practices Framework of the Institute of Internal Auditors (IIA) in the conduct of work.
Languages: Very good knowledge of English or Spanish with working knowledge of the other language. Knowledge of French and/or Portuguese would be an asset.
Additional Information: ALL APPLICANTS MUST APPLY ON-LINE TO BE CONSIDERED FOR THIS POST. A WRITTEN TEST AND/OR INTERVIEW WILL BE HELD FOR THIS POST. CANDIDATES WILL BE CONTACTED ONLY IF THEY ARE UNDER SERIOUS CONSIDERATION. ALL APPLICANTS ARE REQUIRED TO COMPLETE AN ON-LINE PERSONAL HISTORY FORM. THE POST DESCRIPTION IS THE OFFICIAL DOCUMENTATION FOR ORGANIZATIONAL PURPOSES.
Annual salary: (Net of tax) US$ 67,395.00 at single rate US$ 72,373.00 with primary dependants	Post Adjustment: 44.6 % of the above figure(s). This percentage is to be considered as indicative since variations may occur each month either upwards or downwards due to currency exchange rate fluctuations or inflation.

Online applications are strongly encouraged to enable WHO to store your profile in a permanent database. Please visit WHO's e-Recruitment website at: www.who.int/employment. The system provides instructions for online application procedures.
All applicants are encouraged to apply online as soon as possible after the vacancy has been posted and well before the deadline stated in the vacancy announcement.
https://erecruit.who.int/public/hrd-cl-vac-view.asp?o_c=1000&jobinfo_uid_c=24634&vaclng=en
WHO is committed to workforce diversity.
Any appointment/extension of appointment is subject to WHO Staff Regulations, Staff Rules and Manual. Only candidates under serious consideration will be contacted.

WhistleBlower Security Updated Resources Section

Shannon Walker — Wed, 18 May 2011 16:19:49 -0700

http://www.whistleblowersecurity.com/whistleblower-resources

Protect your reputation, your assets and your employees by introducing a simple tool - contact us today!

WhistleBlower Security Fraud Prevention

Shannon Walker — Tue, 17 May 2011 16:03:08 -0700

Since fraud can be a catastrophic risk, implementing a fraud assessment strategy is a necessary component of your business planning. If you do not proactively identify and manage your fraud risks, they could put you out of business almost overnight. Even if you survive a major fraud, it can damage your reputation so badly that you can no longer succeed independently.

The ACFE offers a Fraud Prevention Check-Up that can pinpoint opportunities to save you money. Fraud is an expensive drain on a company’s financial resources. In today’s globally competitive environment, no one can afford to throw away the five percent of revenues that represents the largely hidden cost of fraud. If your organization is not identifying and tackling its fraud costs, it is vulnerable to competitors who lower their costs by doing so.

Strong fraud prevention processes help increase the confidence investors, regulators, audit committee members and the general public have in the integrity of your company’s financial reports. This could help to attract and retain capital.

When conducting the review, it is helpful to interview senior members of management as part of the evaluation process. But it is also valuable to interview employees at other levels of the organization, since they may sometimes provide a “reality check” that challenges the rosier view management might present, e.g., about management’s commitment to ethical business practices.

Some of the sample questions to consider include:

Has the organization established a process for oversight of fraud risks by the board of directors or others charged with governance (e.g., an audit committee)?

Has the organization created “ownership” of fraud risks by identifying a member of senior management as having responsibility for managing all fraud risks within the organization and by explicitly communicating to business unit managers that they are responsible for managing fraud risks within their area?

Has the organization implemented an ongoing process for regular identification of the significant fraud risks to which it is exposed?

Has the organization implemented measures to eliminate or reduce through process reengineering each of the significant fraud risks identified in its risk assessment? Basic controls include segregation of duties relating to authorization, custody of assets and recording or reporting of transactions. In some cases it may be more cost-effective to reengineer business processes to reduce fraud risks rather than layer on additional controls over existing processes.

Major frauds usually involve senior members of management who are able to override process level controls through their high level of authority. Preventing major frauds therefore requires a strong emphasis on creating a workplace environment that promotes ethical behavior, deters wrongdoing and encourages all employees to communicate any known or suspected wrongdoing to the appropriate person. Senior managers may be unable to perpetrate certain fraud schemes if employees decline to aid and abet them in committing a crime.

CHECK-UP

Outcome of A Fraud Prevention Check-List

The first item that a company should consider is a code of conduct for employees at all levels, based on the company’s core values, which gives clear guidance on what behavior and actions are permitted and which ones are prohibited. The code should identify how employees should seek additional advice when faced with uncertain ethical decisions and how they should communicate concerns about known or potential wrongdoing.

— Training for all personnel upon hiring, and regularly thereafter, concerning the code of conduct, seeking advice and communicating potential wrongdoing.

— Communication systems to enable employees to seek advice where necessary prior to making difficult ethical decisions and to express concern about known or potential wrongdoing. Advice systems may include an ethics or compliance telephone help line or e-mail to an ethics or compliance office/ officer. The same or similar systems may be used to enable employees (and sometimes vendors, customers and others) to communicate concerns about known or potential wrongdoing. Provision should be made to enable such communications to be made anonymously, though strenuous efforts should be made to create an environment in which callers feel sufficiently confident to express their concerns openly. Open communication makes it easier to resolve the issues raised, but protecting callers from retribution is an important concern.

— A process for promptly investigating (where appropriate) and resolving expressions of concern regarding known or potential- wrongdoing, then communicating the resolution to those who expressed the concern. The organization should have a plan that sets out what actions will be taken, and by whom, to investigate and resolve different types of concerns. Some issues will be best addressed by human resources personnel, some by general counsel, some by internal auditors and some may require investigation by fraud specialists. Having a prearranged plan will greatly speed and ease the response and will ensure appropriate per-sons are notified where potentially significant issues are involved (e.g., legal counsel, board of directors, audit committee, independent auditors, regulators, etc.).

Monitoring of compliance with the code of conduct and participation in related training.

Regular measurement of the extent to which the organization’s ethics/compliance and fraud prevention goals are being achieved. Surveys of employees’ attitudes towards the company’s ethics/compliance activities and the extent to which employees believe management acts in accordance with the code of conduct provide invaluable insight into how well those components are functioning.

Incorporation of ethics/compliance and fraud prevention goals into the perfor- mance measures against which managers are evaluated and which are used to deter- mine performance-related compensation.www.ACFE.com (800) CFE FRAUD PREVENTION

Proactive Fraud Detection

Companies need to establish a process to detect, investigate and resolve potentially significant fraud. Such a process should typically include proactive fraud detection tests that are specifically designed to detect the potentially significant frauds identified in the organization’s fraud risk assessment.

A brief fraud prevention check-up provides a broad idea of your organization’s performance with respect to fraud prevention. The important information to take from the check-up is the identification of particular areas for improvement in your company’s fraud prevention processes and those significant gaps in fraud prevention measures should be closed promptly in order to reduce fraud losses and reduce the risk of future disaster.

For more information, vist www.acfe.com to read about their Fraud Prevention Checklist.

PR Firm Commits Ethics Fraud as Part of Google Smear Campaign

Shannon Walker — Fri, 13 May 2011 15:03:51 -0700

In a blog written on www.forbes.com, Jeff Bercovici, quite rightly outlines the fact that the PR firm hired by Facebook to engage in "public relations" violated the most basic tenets of the pr code of ethics. It is disappointing in this day and age, with the level of transparency available and expected of us, that a well-known pr agency would engage in such basic unethical practices. Even the practitioners involved have fraudulent c.v.'s on their website. And the aggressive, nonchalant manner of their communications practices is even more disarming and concerning. Facebook, itself, needs to reflect on this turn of events and perhaps, make amends to its loyal group of followers, because engaging in fraud to smear a competitor and getting busted so conclusively, leads this writer to consider what else are they up to??

read more here: www.forbes.com/jeffbercovici/05/13/2011/about-that-google-smearing-facebook-flacks-ethics-degree

love the title of that blog posting too.

SEC Whistleblower Office Does Not Want to Talk to You

Shannon Walker — Thu, 12 May 2011 08:17:10 -0700

This is an amusing although disturbing account of the writer's attempts to report an unethical money manager to the SEC. After reading a press release documenting the launch of a new Head of the Whistleblower Office within the SEC, the writer has to work diligently to try and find someone to take his call. The obvious message here, is that the SEC still isn't making any strides forward in proactively supporting and monitoring whisltleblower reports.

http://blog.forbes.com/edwardsiedel/2011/05/12/sec-whistleblower-office-does-not-want-to-talk-to-you/

Canada New Breeding Ground for Cyber Crime

Shannon Walker — Wed, 11 May 2011 14:44:16 -0700

A report in the National Post points to Canada's dramatic increase in cyber crime, second only to Egypt. An interesting and puzzling phenomenon.

http://www.nationalpost.com/news/canada/Canada+breeding+ground+cyber+crime/4748791/story.html

Register Now! 2011 Compliance & Ethics Institute

Tue, 10 May 2011 10:30:06 -0700

September 11-14, 2011 | Las Vegas, NV

Take advantage of these special discounts offered for your flight to
SCCE’s 10th Annual Compliance & Ethics Institute Click here for more

SCCE's Annual Compliance & Ethics Institute is the primary education and networking event for professional working in compliance and ethics around the world. At this meeting, learn the latest methods and strategies for developing and improving your compliance program in this rapidly growing and evolving profession.

http://www.complianceethicsinstitute.org/

Identity Theft Growing Rapidly Throughout North America

Shannon Walker — Fri, 06 May 2011 15:23:58 -0700

Did You Know?

The average age range of an Identity Theft victim is 25-44 years old
More than 405,000 children had their Identity stolen in 2007
50% Of all Identity Theft does not get reported
There were 9.9 million victims of Identity Theft in 2008, up approx. 1.8 million from 2007
It takes 12 months, on average, for a victim of identity theft to notice the crime.
The top five financial institutions spend more than $100 million a year to deal with electronic fraud. All told, Identity Theft is a $47-billion-a-year-industry.
In 2008, lost or stolen identity information cost individuals $45 billion, an average of $4,849 per incident.
43% of all Identity Theft incidents were due to a lost or stolen wallet

Sony had to shut down their PlayStation Network when it was hacked into and millions of people's personal information was stolen. People need to learn how to protect themselves. In the near future, WhistleBlower Security will be launching a new Identity Theft Recovery system to assist people in quickly replacing and restoring their identity if stolen.

Compliance and Regulatory Senior Manager

Michael Page — Tue, 03 May 2011 10:07:54 -0700

European Investment Bank, London

Permanent ⁄ £65000 - £90000

Updated April 25, 2011

This is a great opportunity to be the No 2 to the head of Compliance in an expanding European Investment bank. The role encompasses a broad range of activities giving an extensive exposure to all business areas. The Bank has a considerable expansion plan so the successful individual will be working in a growing exciting environment.

Cooperate and assist the Head of Compliance and Regulatory Services London Branch in the correct execution of the following Compliance & Regulatory activities required to ensure strict conformity with respect to all current applicable laws, guidelines and regulations provided by the competent Regulatory authorities , with particular reference to the rules provided by the Financial Services Authority entity as well as ALL internal Group and Bank related Policies, procedures and processes:
• Daily and periodic approved Compliance monitoring activities related to the Capital Markets activities of the Branch
• Daily and periodic approved Compliance monitoring activities related to the Structured Finance and general Investment Banking activities of the Branch
• Daily and periodic approved Compliance monitoring activities related to the Administration and Support functions of the Branch
• Money Laundering monitoring and controls related to all aspects of Capital Markets, Structured Finance and general Investment Banking business
• Periodic review of existing Policies and procedures to ensure they are up to date and compliant with current local and other Supervisory Regulations and guidelines
• Assist in the assessment and reporting processing of the Branch Operational Risk
• Support in the preparation and completion of any local Regulatory and Exchange reporting.
• Report and update the Head of Department and Head Office Group Compliance function and General Manager on monitoring actions and report to the General Manager and Head Office on the evolution of Compliance & Regulatory Services
• Co-operates in agreement with the London Head of Compliance and Regulatory Services with other members of the London Team and with Head Office Group Compliance on specific Compliance and AML tasks assigned.
• Ad hoc duties periodically assigned by the Branch General Manager as agreed with the London Head of Compliance and Regulatory Services and Head Office Group Compliance

Who we're looking for
•The successful candidate will be an experienced individual who has significant monitoring exposure within ECM/DCM and Investment banking.You will have good product knowledge and understand the risks and requirements from a Regulation and Compliance perspective.
• Good Capital Markets Compliance monitoring and control with additional exposure and knowledge of general Investment Banking Compliance activities.
• Strong AML knowledge
• Italian Language speaker preferred but not essential

About our client
Our client is a leading European Investment bank

What's on offer
Competitive package and benefits

Michael Page Contact
For further info, apply or phone on 0207 776 5960. Job Ref: 13142434
Your application will be sent to Lindsay Reid

http://www.michaelpage.co.uk/job-display/1017964/compliance-and-regulatory-senior-manager.html

Kroll Annual Global Fraud Study Finds Data Theft Surpasses Property Theft

Shannon Walker — Mon, 25 Apr 2011 14:49:37 -0700

One of the ways to increase market share is to build a mousetrap and it increasingly appears that one of the fastest ways to increase market share is to pilfer a company’s plans for a better mousetrap.

According to the latest edition of the Kroll Annual Global Fraud Report, theft of information and electronic data at global companies has overtaken physical theft of property and goods for the first time.

As noted by Kroll, “If fraud were a virus, almost everyone would be slightly ill” with its finding that of the respondents, 88% reported that they had been hit by at least one type of fraud in the past year, a figure broadly similar in every region and consistent with those of previous years. However we were struck by the finding that soft theft has overtaken hard theft as a key concern for companies in the area of fraud.

This year’s study shows that the amount lost by businesses to fraud rose from $1.4m to $1.7m per billion dollars of sales in the past 12 months – an increase of more than 20%. While physical theft of cash, assets and inventory has been the most widespread fraud, by a considerable margin in previous Global Fraud Reports, this year’s findings reveal that theft of information or assets was reported by 27.3% of companies over the past 12 months, up from 18% in 2009. In contrast, reported incidences of theft of physical assets or stock declined slightly from 28% in 2009 to 27.2% in 2010.

According to the 2010 survey, 88% of companies said they had been the victim of at least one type of fraud during the past year. Of the specific countries analyzed China is the top market in which companies suffered fraud with 98% of businesses operating there affected, Colombia ranked second with a 94% incidence of fraud, followed by Brazil with 90%. Information-based industries reported the highest incidence of theft of information and electronic data over the past 12 months; these include financial services (42% in 2010 versus 24% in 2009), professional services (40% in 2010 versus 27% in 2009) and technology, media and telecoms (37% in 2010 versus 29% in 2009).

The Kroll annual survey came on the heels of a notice we recently received about the upcoming release of the Open Source Security Testing Methodology Manual (OSSTMM) v3, which is the first comprehensive security testing methodology manual to gain any ground. The OSSTMM is a peer-reviewed methodology for performing security tests and metrics; test cases are divided into five channels (sections) which collectively test information and data controls, personnel security awareness levels, fraud and social engineering control levels, computer and telecommunications networks, wireless devices, mobile devices, physical security access controls, security processes, and physical locations such as buildings, perimeters and military bases. Anthony Freed, Managing Director of InfosecIslandcalled the OSSTMM “a strikingly authoritative outline of security best practices, and will most certainly have an effect on security standards and best practices.”

The OSSTMM is made available at no cost through the Institute for Security and Open Methodologies (ISECOM) a non-profit collaborative community. It is dedicated to providing practical security awareness, research, certification and business integrity. ISECOM provides certification, training support and project support services for non-partisan and vendor-neutral funding of projects and infrastructure and assures you their training programs, standards, and best practices are truly neutral of national or commercial influence.

The example of this theft of business information was made real today by a client who told of an account had been opened in the company’s name, using fraudulent means, and someone was purchasing big screen televisions. The client only found about the fraud when the company received its first invoice for these fraudulent purchases. This reinforces the fact that compliance encompasses a wide range of areas in a company and the Kroll Annual Survey makes clear that information security should be included.

Source: Thomas Fox, www.corporatecomplianceinsight.com

Apple iPhones and 3G iPad Track Time and Whereabouts of Users

Thu, 21 Apr 2011 14:39:53 -0700

With the revelation that Apple iPhones and iPads have a secret file called "consoidated.db" that timestamps the whereabouts of the user, one has to wonder what Apple is up to and where is the transparency for their loyal customers? I use an iPad and love the product but i certainly resent the fact that Apple is tracking my movements. Is this an invasion of privacy, is it big brother? One has to wonder about the ongoing assault on our personal information and most importantly, about the lack of communication between Apple and its userbase.

What Does Photographing Chickens Have to Do with Increasing Transparency and Quality

Seth Godin — Tue, 19 Apr 2011 15:43:44 -0700

This is a great post written by Seth Godin who i have admired for years as a social media expert and prolific writer who's musing of business, marketing always strike a chord with me. In the post below, he speaks to why transparency in business can lead can correlate to an increase in the quality of service or product delivered. While a simple analogy, the logic makes sense; one can imagine how easily it is for companies to slide down a different path for the sake of cost saving or efficiencies that in fact, are anything but. If you have a thought on this post, please share it!

Thousands of doctors have signed up for a service that, among other things, they can use to try to prohibit patients from posting reviews. You can read a bit about it here.

In Iowa, in a surprisingly similar move, the state government is moving ahead with a law that will make it a crime to take or possess videotapes of factory farming that might harm the commercial interests of the farmer.

In both cases, an organization is trying to maintain power by hiding information from the public. Can you imagine being arrested for possession of a photo of a pig?

It's easy to argue that from the public's point of view, laws like this are a bad idea. The public certainly benefits from the outing of bad doctors and from the improved hygeine of factory farms. In that sense, it's unethical for doctors and legislators to subvert their responsibilities by ordering the unempowered to shut up.

I think it's interesting to think about from the doc's point of view (and the chicken farmer), as well. The temptation is for those in charge to defend the status quo by fighting transparency. This ignores a simple truth:

When book reviews are posted, book sales go up.

Yes, the argument of fairness matters. The patients have no choice, the chickens certainly have no choice and the consumers don't have much choice either. There's an argument that goes beyond choice, though... it turns out that transparency increases profitability.

If every chicken coop has a video camera in it, quality will obviously go up. Confidence in the product will go up. Employee behavior will improve as well, because it's hard to torture a chicken if you know you're going to get caught.

But wait, you might argue... if we have to take better care of the chickens, our costs will go up as well.

Here's the thing: when consumers get used to transparency, they're also more interested in the quality of what you sell, and are more likely to willingly pay extra. They'll certainly cross the street to buy from an ethical provider. And once people start moving in that direction, the cost of being an unethical provider gets so high that you either change your ways or fade away.

Chicken farms don't need a law prohibiting possession of images. They need a producer who will make a ton of great (true) chicken movies. Inundate us with images of cleanliness and quality instead of blacking us out. Don't race to the bottom (you might win). Instead, force your competition to race you to the top instead.

[Aside: the same objection happened when we started regulating hygeine in restaurant kitchens. Yes, it got more expensive to clean the pots and kill the rodents, but it was okay, because post-Duncan Hines, demand for quality went up enough to more than pay for it.]

The same argument holds true for doctors. Once information about good doctors becomes widespread, patients will be more willing to seek out those doctors, rewarding the ones who consistently take better care of their patients. The entire profession doesn't suffer (we'll still go to a doctor) merely the careless doctors will.

One more: A leading politician in India is arguing that bribery (in certain transactions) ought to be legalized. Why? Because if the briber feels free to rat out the bureaucrat, bribery goes down.

In all three cases, sunlight is an antiseptic and the marketplace rewards those that behave--and the entire market grows when the standards increase.

Consumers and those that want their admiration ought to reward those in favor of transparency (what a great opportunity for McDonald's). And the antidote for speech a provider doesn't like isn't a contract or a law. The antidote to speech you don't like is more speech.

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Posted by Seth Godin on April 14, 2011 | Permalink

What to Do When an Invoice Unexpectedly Appears on Your Desk

Shannon Walker — Mon, 18 Apr 2011 15:15:36 -0700

I recently read an article about a fraudulent scam that has been used for a while now. The scam involves an non-descript invoice being sent to your organization. The invoice looks legitimate. It displays your company's trademark - has your address correct and clearly outlines fees and where to send the funds. The problem with these invoices, is that if it is a nominal amount, sometimes your accounting team will process the invoice and send the funds. If you are lucky, like I was today, they bring it to you for your approval. When our accountant brought an invoice to me from a company in Hungary, I was initially suspect. The invoice implies they are registering your trademark in Hungary but as you read through the fine print, for $1650 USD, you will approve an offer to list in a collection-edition of new trademarks! So first things first, our trademark is not new. I have never applied for anything in Hungary. Now, the interesting part will be the next few weeks. My understanding with a number of these types of scams, is that collection departments will start to call demanding payment. They will harass and intimidate your staff and try to tell them they have agreed to the services. I will let you know if that happens to us, but the lesson is, no matter how small the invoice, ensure that you have controls in place, that every invoice must be approved by a supervisor of that company or division. It is far too easy for these types of things to slip through the cracks, and before you know it, you are on the target list.

US Government Moves To Shut Down Worlds Biggest Online Poker Companies

Nathan Vardi — Fri, 15 Apr 2011 16:32:31 -0700

An interesting article about the latest US federal government move to squash Internet Poker entrepreneurs. In what is sure to a fascinating legal battle and precedent setting case, the US District Attorney is reaching globally to secure a piece of the gambling fortunes made through the web. Will whistleblowers play a role in this case? Is it fraud or is it innovative entrepreneurs making an opportunity? The courts will decide.

Read more about here: http://blogs.forbes.com/nathanvardi/2011/04/15/founders-of-the-worlds-biggest-online-poker-companies-indicted

Corrupt Bank Oversight is Creating a New Immoral Hazard

Neil Weinberg — Thu, 14 Apr 2011 14:02:34 -0700

As word trickled out over the past few years that our law enforcers had punted on prosecuting one banking industry bum after another, I’ve frequently told friends it struck me as a glaring example of a prosecutorial failure of imagination.

Did Countrywide Financial’s Angelo Mozilo commit no crimes? AIG’s Joseph Cassano? Washington Mutual’s Kerry Killinger? Apparently not, if our law enforcement bureaucracy is to be believed.

What I wanted to know is this: Where’s New York’s Martin Act, which Eliot Spitzer wielded to out corruption in Wall Street research, hedge fund and mutual fund late-trading and market timing and “spinning” of coveted pre-IPO shares? Where are the prosecutions over failure to provide “honest services,” which federal prosecutors used to put former Enron boss Jeffrey Skilling behind bars for a couple decades?

A failure of imagination? Not according to Gretchen Morgensen and Louise Story in their provocative piece in today’s New York Times. Rather than describing a failure of imagination, this fascinating story tells of regulators and prosecutors who appear to be guilty of a failure of inspiration.

The article describes banking regulators abdicating their duty to refer cases of misconduct to law enforcement for prosecution—and of prosecutors abdicating their duty to ply their trade vigoriously. The reason appears to be not so much a grand conspiracy as a diffuse one. Countrywide, the Times indicates, was put off-limits to the Financial Crisis Inquiry Commission by jittery Republicans. Perhaps they were afraid an honest airing of who was on the “Friends of Angelo” list, and what goodies they received from Countrywide’s boss, would do severe damage to their political careers.

In other instances, it seems there were legitimate policy questions raised about whether it would serve the greater good for the feds to go after financial institutions for legal infractions, and large financial settlements, at the same time the government was bailing them out. “This wasn’t so much a political thing as ‘We don’t know if it makes sense to bring a big penalty against a bank that just got a big check from the government,’” says an unnamed source of the Securities and Exchange Commission’s thinking in the Times story.

That’s all fine and well as far as it goes. But the top executives at the major financial institutions that ultimately needed bailouts didn’t receive government checks. What a lot of them did receive were vast riches in the form of stock, options and bonuses–in some cases as they talked up their companies publicly while expressing serious doubts in private. Isn’t there anyone left in the government who can say “securities fraud”?

To me the moral of this story is that Washington has created a vast immoral hazard. We are all truly in a world of peril when regulators and law enforcers believe our financial institutions are too big to be brought to justice—and when our leadership in Washington is so gutless that its response is to let these same institutions emerge bigger and more beyond challenge than ever.

The Other Guy Who Sued Facebook Is Back With Fancier Lawyers

Kashmir Hill — Tue, 12 Apr 2011 15:06:28 -0700

Wood chipper Paul Ceglia, the New York man who claims he has a seven-year-old contract with Mark Zuckerberg that entitles him to at least half of the company, has refiled his lawsuit against Facebook, and brings a “boatload of new evidence,” reports Henry Blodget at Business Insider.

Ceglia has hired a power team of lawyers at DLA Piper who helped him dig up a bunch of emails that allegedly prove Ceglia’s claims that Zuck signed away half of “the face book” in exchange for seed money. Ceglia claims that in exchange for $2,000 (which might have seemed like a considerable chunk of change to a college sophomore), Zuck promised him half of the site’s revenue. If Zuck really agreed to this, it’s proof that Harvard failed in imparting common sense to the young entrepreneur.

Ceglia has a somewhat shady past — including a conviction for fraud — which has led many to question the validity of his claims. But the new evidence is compelling, says Blodget.

Ceglia has produced more than a dozen of what he says are emails between him and Mark Zuckerberg from July 2003 to July 2004, the year in which Facebook was created.
In these purported emails, which we have included below [Ed. note -- not the actual emails, but as they are quoted in Ceglia's new complaint -- and this being Business Insider, they are in an annoying slideshow format], Zuckerberg and Ceglia discuss “the face book” project in detail. They discuss how Ceglia will fund the project. They discuss how Ceglia has funded the project (proof of payment). They discuss how Zuckerberg has met some upperclassmen–the Winklevosses, presumably–who are pursuing a similar project, and how Zuckerberg is “stalling” them. They discuss how Zuckerberg has failed to complete the “face book” project on time. They discuss the launch of the face book, which Ceglia agrees looks great.

But which Ceglia somehow completely forgot about for the next six years or so…

The emails then include Zuckerberg telling Ceglia that the Facebook site is not doing well. They include Zuckerberg telling Ceglia that the site has seen so little success that Zuckerberg is thinking of shutting it down. And, in the summer of 2004, they include Zuckerberg offering to send Ceglia his $2,000 of funding back–right at the time Zuckerberg had moved to California to continue to develop, incorporate, and raise money for Facebook.
Ceglia contends that most of what Zuckerberg told him after the launch of the site were lies. (Facebook, as we all now know, went gangbusters right from the beginning). And Ceglia contends that, in the summer of 2004, Zuckerberg “misappropriated” the assets of their general partnership and conveyed them to the corporation that became Facebook, Inc.
via FACEBOOK LAWSUIT: Paul Ceglia Files New Evidence In Claim He Owns 50% Of The Company.

This complaint is definitely more promising than Ceglia’s first. It looks like there will be no rest period for Facebook’s (presumably) weary lawyers, after their victory over the Winklevoss twins.

Aaron Sorkin, are you paying attention? It’s already been proven that films about Facebook litigation are popular at the box office. Maybe it’s time for someone to start drafting the screenplay for The Social Network Two.

National Volunteer Week

Fast Company Calendar — Mon, 11 Apr 2011 13:36:56 -0700

Shannon Walker - President, WhistleBlower Security - When we talk about creating a corporate culture of transparency and inclusion, there is a new movement for encouraging employee engagement – volunteerism. This week is National Volunteer Week and corporations are motivating their employees somewhat differently these days – instead of expense perks, employees are received paid hours for volunteering on company time.

National Volunteer Week...

Gym reimbursements and lavish company parties may be going the way of the dinosaur, but paid time for volunteering is one employee perk not yet in danger of extinction. Take UnitedHealthcare, whose company attorneys recently donated 600 hours of pro bono legal service. Or Target, whose workers spend 450,000 hours annually on projects such as overhauling school libraries. At Gap, staffers can spend five company hours each month on causes like teaching underserved youth about job applications. VolunteerMatch, which pairs corporations with communities, expects skills-based volunteerism to double by 2015, thanks to a huge win-win factor: "Employees learn project management skills and improve their public-speaking skills," says Gap's director of employee engagement, Gail Gershon. "Obviously you want to get promoted, and this is a clear path to getting there."

http://www.fastcompany.com/1742091/national-volunteer-week

Are You Excited About Your Business Execution & Collaboration

FC Expert Blogger David Gardner — Fri, 08 Apr 2011 16:20:40 -0700

Shannon Walker - President of WhistleBlower Security writes: Someone recounted a quote her CEO uses regularly when discussing their business objectives:

The way you do anything is the way you do everything.

It resonated with me in a number of respects – from our attention to detail in personal life and business life, to our level of commitment and deliberate focus on our strategic objectives, but even more tellingly, to the daily productive outputs that we achieve in all arenas of our lives.
It is easy to get lost in the fluidity of the day, so the more we can be deliberate in the management of our business and focused in the execution of our decisions, the more successful we will be.

Are You Excited About Your Business Execution & Collaboration?

BY FC Expert Blogger David Gardner Today

This blog is written by a member of our expert blogging community and expresses that expert's views alone.

Some things never seem to change. About thirty years ago, James Treybig, the president of Tandem Computers, called a meeting with the engineering leadership team. He opined that when there were about 20 people in engineering, the team regularly performed miracles. 3 years later, he observed that with 300 people in engineering, it seemed like nothing was getting done. He was puzzled by this and wanted to know why. How many executives are feeling the same frustration today?

Too many executives know that business execution, collaboration and productivity aren't what they could or should be. While there are certainly fewer people employed in most companies today, the employees that remain aren't accomplishing more. There's plenty of gridlock, angst, frustration and unhappiness to go around. Executives crave:

• improved business execution
• improved collaboration amongst individuals and teams
• doing more with less (people, resources, time, etc.)

What executives crave really hasn't changed much. Jimmy had posed a great question with no simple answer. The problem had multiple dimensions:

• There were too many meetings--there was little time to do the actual work
• Decisions were made by consensus--there was a lack of direction about how to negotiate a consensus climate
• Roles and responsibilities weren't well defined--when everyone is responsible, no one is responsible
• There didn't appear to be a sense of urgency--did you see our record financial results last quarter? The quarter before that?
• There were a number of sacred cow projects, some with dubious projected returns.

For the vast majority of companies and departments, the challenges we discussed in that meeting 30 years ago prevail today. What needs to be done?

Understand--from your employees perspective--critical areas that likely are undermining your business:

Meetings

◦ Have meetings simply become a way of life?
◦ Are meetings contributing to your organization's effectiveness or inhibiting it?
◦ Is being double- and triple-booked for meetings a badge of honor?
◦ Are your people aware of the best practices for running meetings based on the meeting type?
◦ Are meetings the best way to collaborate based on a specific need or are there alternatives?

Decision-making

◦ Are decisions really made only at the top?
◦ Do employees feel that they play an important role?
◦ Is the decision-making process enhancing or undermining relationships?

Business execution within critical business processes--priority must be given to customer-facing processes

◦ What is working well and what is not?
◦ What needs to be tightened up?

I use a 2x2 matrix contrasting strategy with execution to understand vulnerabilities and opportunities for improvement.

Topic: _________________________

You can select a topic such as your own company, a competitor, a critical company function such as product development, customer service, operations, etc., meetings, decision-making, etc., and rate strategy (how effective is our strategy) versus execution (how well are we executing). It is worthwhile examining the same topic from different perspectives, e.g., internal customers, external customers, the marketplace, etc., to develop a more comprehensive understanding.

As Marshall Goldsmith offers, "what got you here, won't get you there." If the areas identified above were easy to improve, companies wouldn't continue to be plagued by them all these years. Most executives are too close to the problems to see what can be done about them. Isn't it time you took a closer look?

This blog post was co-authored by Dave Gardner and Daniel Markovitz. Dave is a management consultant, speaker and blogger who resides in Silicon Valley. His firm helps clients eliminate business execution issues that threaten profitable and sustainable growth. He can be reached through his website at www.gardnerandassoc.com or via Twitter @Gardner_Dave.

Daniel Markovitz is a consultant who helps companies bridge the gap between strategy and execution. He teaches at the Stanford University Continuing Studies Program and the Fisher School of Business at the Ohio State University. He can be reached via his website at www.timebackmanagement.com.

http://www.fastcompany.com/1744595/are-you-excited-about-your-business-execution-amp-collaboration

Vacancy Project Finance Assistant for Indonesian nationality only Jakarta Indonesia

UNDP — Thu, 07 Apr 2011 09:25:46 -0700

Closing Date: Tuesday, 19 April 2011

Background

UNDP Indonesia's mission is to be an agent for change in the human and social development of Indonesia. We, the UNDP Country Office (CO), aim to be a bridge between Indonesia an all donors as well as maintaining our status as a trusted partner to all stakeholders. We work in four key areas of development: Governance Reforms, Pro-Poor Policy Reforms, Conflict Prevention and Recovery, and Environment Management, with the overarching aim of reducing poverty in Indonesia. Besides the four priority areas, UNDP Indonesia is also engaged in a variety of crosscutting initiatives focused on HIV/AIDS, gender equality, and information and technology for development.

I. Organizational Context

UNDP – Poverty Reduction Unit (PRU) is seeking a Project Finance Assistant to support the Social Protection, MDGs and Regional Economic Development cluster on financial management.

The Project Finance Assistant will work closely with the Programme Associate for PRU, and the project team based in the UNDP's project office, as well as, with the Resource Mobilization Unit of UNDP Country Office. S/he will report to the Programme Manager for PRU, and under direct supervision of Programme Associate for PRU.

Duties and Responsibilities

II. Functions / Key Results Expected

Summary of Key Functions:

- Implementation of operational strategies

- Functioning of cost-recovery system

- Accounting and administrative support

- CO cash management

- Knowledge building and knowledge sharing

1. Ensures implementation of operational and financial strategies focusing on achievement of the following results:

- Full compliance of financial processes and financial records with UN/UNDP rules, regulations, policies and strategies.

- Input to the CO business processes mapping and elaboration of the content of internal Standard Operating Procedures in Finance in consultation with the direct supervisor and office management.

2. Ensures functioning of the optimal cost-recovery system focusing on achievement of the following results:

- Provision of inputs for preparation of cost-recovery bills in Atlas for the services provided by UNDP, follow up on cost recovery.

3. Provides accounting and financial support to the MDGs/Health/HIV, Social Protection and Regional Economic Development clusters focusing on achievement of the following results:

- Proper control of the supporting documents for payments and financial reports for NEX projects; preparation of all types of vouchers for projects and on-behalf of UN Agencies and non-Atlas Agencies; PO vouchers; Pay Cycle and payment execution.

- Timely corrective actions on unposted vouchers, including the vouchers with budget check errors, match exceptions, unapproved vouchers.

- Maintenance of the internal expenditures control system which ensures that vouchers processed are matched and completed, transactions are correctly recorded and posted in Atlas; ensure accurate computation and completeness of supporting documentation on the basis of appropriate authorization.

- Presentation of information on the status of financial resources, including advice on ensuring compliance with donor related reporting needs in line with UNDP and Standard Accounting rules.

- Advises and assists staff, experts and consultants/participants on aspects of allowances, salary advances, travel claims and other financial matters, such as, calculation and payment of DSA and other entitlements.

- Ensure that all procurement of goods and services are in line with the provisions of the operational manual, are transparent, and well documented.

- Manage to follow up the audit report by government auditor and/or external auditors under both NIM and DIM projects, and further collaboration with the internal auditor within the UNDP Country Office.

- Management of cash receipts and petty cash.

- Maintenance of the proper filing system for finance records and documents.

4. Ensures proper CO cash management system functioning focusing on achievement of the following results:

- Alternate to Programme Assistant/Associate for timely review of cash position for local accounts to ensure sufficient funds on hand for disbursements. Timely identification and recording of receipts for income application.

- Alternate to Programme Assistant/Associate for daily review of identification and recording of contributions, monitor the Cost Sharing Contribution level, and daily financial problem solving.

- Preparation of monthly UN exchange rate report to Treasury.

- Timely and accurate review of bank reconciliations from partners' Financial Review.

- Prepares detailed budget estimates and participate in monitor, review and analysis the detail expenditures and projections as required.

- Initiates correspondences to verify data, answers queries and obtains additional information on accounts and financial transactions as required, also propose improvements in the practices of the programme to ensure maximum efficiency and effectiveness.

5. Supports knowledge building and knowledge sharing in the CO focusing on achievement of the following results:-

- Provides training on financial management to project support unit.

- Participation in the trainings for the operations/ projects staff on Finance.

- Contributions to knowledge networks and communities of practice.

IV. Impact of Results

The key results have an impact on the execution of the CO financial services management in terms of quality and accuracy of work. Accurate data entry and presentation of financial information and a client-oriented approach enhances UNDP's capability to effectively and efficiently manage financial resources.

Competencies

IV. Competencies and Critical Success Factors

Corporate Competencies:

-Demonstrates commitment to UNDP's mission, vision and values

- Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability

Functional Competencies

Knowledge Management and Learning

- Shares knowledge and experience

- Actively works towards continuing personal learning and development in one or more practice areas, acts on learning plan and applies newly acquired skills

Development and Operational Effectiveness

- Ability to perform a variety of standard tasks related to financial resources management, including screening and collecting documentation, financial data processing, filing, provision of information

- Good knowledge of financial rules and regulations, accounting

- Strong IT skills

- Ability to provide input to business processes re-engineering, implementation of new system

Leadership and Self-Management

- Focuses on result for the client and responds positively to feedback

- Consistently approaches work with energy and a positive, constructive attitude

- Remains calm, in control and good humored even under pressure

Required Skills and Experience

V. Recruitment Qualifications

Education:

Bachelor degree in accounting, with specialized training and/or experience on finance/accounting/audit of non-government organization (or any development projects) is preferred.

Experience:

Minimum 3 years of relevant finance/accounting experience in the UN agencies and/or any international development projects with GOI is required.

Experience to control high volume of workload and manage the prioritization of tasks, experience in collaboration with partners to follow up any audit findings/reports, experience in the usage of computers and office software packages (MS Word, Excel, etc) and knowledge of spreadsheet and database packages, and experience in handling of web based management systems.

Language Requirements:

Fluency in the UN and national language of the duty station.

APPLICANT MUST COMPLETE P11 FORM AND SUBMIT AS PART OF THEIR APPLICATION . Click here to down load the form

P11

Female candidates are encouraged to apply

UNDP Indonesia reserves the right to select one or more candidates from this vacancy announcement.We may also retain applications and consider candidates applying to this post for other similar positions with UNDP Indonesia at the same grade level and with similar job description, experience and education requirements

UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence.

http://unjobs.org/vacancies/1302020977530

Vacancy Programme Finance Specialist New York

UNDP Environment and Energy Group (EEG) — Thu, 07 Apr 2011 09:32:18 -0700

Closing Date: Monday, 18 April 2011 

Background

The UNDP Environment and Energy Group (EEG) is based in UNDP's Bureau of Development Policy and is responsible for providing leadership and technical support to engineer delivery of the Environment and Sustainable Development pillar of UNDP's Strategic Plan. Its main focus is on helping countries develop the capacity to fully incorporate environmental sustainability into development at national and local, but also global and regional, levels. The principal areas of work are in environmental mainstreaming, environmental finance, adaptation to climate change, and local management of natural resources.

With its technical focus, the Environment and Energy Group (EEG) is organized into substantive technical teams with a Principal or Senior Technical Advisors (PTA/STA) being the team leader within each area. Each team leader supports and guides a team of Technical Advisors and Specialists, commonly situated in UNDP's regional service centers (RTAs, RTSs).

Energy, Infrastructure, Transport, and Technology

One such team is the Energy, Infrastructure, Transport and Technology (EITT) team, which focuses on energy use and supply, climate resilient infrastructure and low carbon transport and mobility. The EITT team assists developing countries to attract and direct public and private investment towards these areas, and is responsible for providing detailed technical knowledge related to accessing, using, and reporting on a variety of sources of funding. Currently the main sources of funds include: the Global Environment Facility (GEF); the UNFCCC Adaptation Fund; compliance and voluntary carbon markets; and various bilateral, multilateral, and sub-national funds, donors and partners. Increasingly EITT's work is oriented to utilizing scarce public catalytically to leverage greater flows of private capital.

MDG Carbon

As one part of EITT, UNDP has established MDG Carbon to serve as UNDP's corporate framework for carbon finance activities. MDG Carbon has 3 core objectives: first, to expand access to carbon finance to currently underrepresented countries and sub-national regions; second, to promote carbon finance activities with sustainable development outcomes, supporting the Millennium Development Goals (MDGs); and, third, to promote carbon finance solutions with high replicability and scale.

On the ground, MDG Carbon operates through two complementary arms, a Market-Enabling arm and a Project Development arm. The Market-Enabling arm works on public goods: policy dialogue, capacity building and new instruments. Here UNDP, providing its traditional capacity development assistance, uses a donor-funded business model. The Project Development arm provides assistance to develop viable carbon activities to the stage of credit issuance or monetization, including working with financial partners and other actors who purchase the credits issued by projects. Here, given the more commercial nature of this arm, UNDP uses a cost-recovery model.

In order to best structure its activities for any post 2012 climate finance environment, MDG Carbon applies its business model in three thematic areas: (i) project-based carbon finance (CDM/JI), (ii) sectoral approaches and trading mechanisms, and (iii) unaddressed sources and sinks of emissions. There are multiple linkages and synergies between these three areas.

Duties and Responsibilities

The Programme Finance Specialist (hereafter 'the Specialist') will have two core responsibilities.

I. The Specialist's first core responsibility will be to provide policy, programming, implementation and oversight support on UNDP's activities in the general EITT domain. Here, the Specialist will bring her/his expertise in the area of finance and EITT, including issues related to: the international climate finance system; the institutional investor landscape; financial and technical instruments to address financial barriers to EITT investment; and, business models to engage private sector involvement in EITT activities.

II. The Specialist's second core responsibility will be to provide finance-related support specifically to MDG Carbon's activities, including assisting with MDG Carbon emission reduction projects. Here the Specialist will bring her/his expertise in the commercial areas of carbon finance, including issues related to: the opportunity for carbon finance modalities to spur investment; the financial due diligence of projects; the underlying financing of projects; and, the off-take of credits generated by projects.

It is envisaged that each of the Specialist's two responsibilities will consume approximately an equal share, 50% each, of her/his work load. Clear targets for both roles will be set.

For the Specialist's role in general EITT activities, the Specialist's primary clients will be UNDP Country Offices. For the Specialist's role in MDG Carbon activities, the Specialist will be part of a team of Technical Advisors in the MDG Carbon Facility, and the Specialist's primary clients will be other RTA/RTSs. In both roles, the Specialist will interact with many additional actors, both internal and external to UNDP, including the UNDP/GEF directorate, other departments within UNDP, other UN agencies, international financial institutions, and the private sector.

The Specialist's primary supervisor will be the Principal Technical Advisor, EITT. The Specialist's secondary supervisor, for MDG Carbon activities, will be the Senior Technical Adviser, MDG Carbon Facility, Project Based Carbon Finance (CDM/JI).

The main functions/results of the position are as follows and in terms of the Specialist's role in general EITT activities:

Innovation, Strategic Leadership, Policy Dialogue and Advocacy (25%

Maintain a strategic understanding of, and engagement with, the substantive technical issues, institutions and processes in the area of EITT and finance;
Contribute to the development of strategic UNDP policy position papers and internal briefing notes on EITT and finance;
Provide policy development support and guidance, undertake policy analysis and develop technical tools and guidance;
Maintain a trusted leadership role related to EITT and finance and keep the EITT team informed of relevant trends and issues in the area

Key result

– In the area of EITT and finance: new strategic opportunities for UNDP are realized, UNDP's technical focus is leading edge and innovative, UNDP has strong partnerships with a wide range of stake-holders, UNDP has a trusted leadership role in the technical area of expertise.

Resource Mobilization and Development Impact (25%)

Providing timely quality information and technical advice on sources of funds, policies, priorities and activities;
Identifying and suggest to the PTA priorities and entry-points for UNDP assistance;
Facilitate the process of preparation, design, submission and approval of programme/project concepts and full-fledged proposals for financing;
Assisting with inception, contracting and start up of programmes/projects including establishment of indicators, benchmarks and work plans;
Supporting UNDP country offices and programme/project implementation partners in supervision, implementation, monitoring, evaluation, troubleshooting and adaptive management;

Key result

- In the area of EITT and finance: resources are mobilized in support of developing country clients as a consequence of the identification, development and funding of high technical quality and results based programmes and projects in line with country priorities and UNDP strategic priorities. UNDP programmes and projects consistently deliver high quality, high impact development results.

In terms of the Specialist's role in MDG Carbon activities:

Strategic Leadership, Policy Tools and Dialogue, & Relationship Management (25%)

Maintain a strategic understanding of, and engagement with, the substantive technical issues, institutions and processes in the area of carbon finance;
Maintain a trusted leadership role related to commercial aspects of carbon finance and keep the EITT team informed of relevant trends and issues in the area;
Develop and maintain guidance tools, templates and financial models for UNDP's performance of financial due diligence and assistance on projects' business development;
Maintain programme-level relationships with financial service providers which may invest in underlying financing or participate in the off-take of credits from MDG Carbon projects

Key result

- In the area of commercial aspects of carbon finance: new strategic opportunities for UNDP are realized, UNDP's technical focus is leading edge and innovative, UNDP has a suite of up-to-date and functional guidance tools and models; UNDP has relationships in place with a range of financial actors

Project Development Technical Assistance (25%)

Support field staff, in particular RTA/RTSs, and where necessary engage directly, in the financial due diligence, financial modeling and business planning aspects of project development work.
Support field staff, in particular RTA/RTS, and where necessary engage directly, in assistance to projects to structure and secure underlying financing for their activities
Engage directly in MDG Carbon's activities in assisting projects on the off-take of credits generated by the project, including assisting in advising on market practice regarding deal structuring and commercial terms

Key result

- In the area of commercial aspects of carbon finance: clients, and in particular RTAs and RTSs, are effectively, efficiently and promptly supported in the areas of financial due diligence, underlying financing, and the off-take of credits.

Competencies

Technical:

Full familiarity with financial aspects of EITT including international public climate finance, the institutional investor landscape, and financial and technical instruments to address financial barriers to EITT investments;
Full familiarity with the commercial and financial aspects, and industry practices, of carbon finance (origination, due diligence, project development, financing, commercialization);
Full familiarity, at the project development level, with financial statements and financial modeling
Technical and analytical capability to undertake detailed analysis of heterogeneous data and draw meaningful and relevant conclusions for practical applications;
Ability to analyse and address problems with full technical competency, leading to fact-based and practical recommendations and creative solutions;
Ability to produce high-quality outputs in a timely manner while understanding and anticipating evolving needs.

Corporate

Demonstrates integrity by modeling the UN values and ethical standards;
Promotes the vision, mission, and strategic goals of UNDP;
Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability;
Treats all people fairly without favoritism.

Functional:

Client Focus

Builds strong relationships with clients, focuses on impact and result for the client and responds positively to feedback
Consistently approaches work with energy and a positive, constructive attitude
Demonstrates openness to change and ability to manage complexities
Remains calm, in control and good humored even under pressure
Skills in facilitation and coordination, entrepreneurial spirit and demonstrated ability to work in an independent manner

Partnerships and teamwork:

Interdisciplinary and intercultural sensitivity and capacity to build strong relationships with partners and clients, using interpersonal skills to network effectively
Ability to manage complexity and contribute effectively to team-based activities and manage conflict and stress productively;

Knowledge Management and Learning:

Promotes knowledge management in UNDP and a learning environment in the office through leadership and personal example
Seeks and applies knowledge, information, and best practices from within and outside of UNDP

Communication:

Ability to write clearly and convincingly, adapting style and content to different audiences, and speak clearly and convincingly, demonstrating strong chairing and presentation skills in meetings, and adapting style and content to different audiences.

Required Skills and Experience

Education

Masters degree in a relevant environmental, political or business- related field.

Experience

At least seven years professional experience, including a requirement of substantial relevant experience in an investment or commercial banking context;
A thorough understanding of the international climate finance architecture, the institutional investor landscape, and financial and technical instruments to address financial barriers in the EITT area;
A thorough understanding of the carbon markets and detailed knowledge of financial industry practice with regard to carbon projects in developing countries;
Strong skills in financial statements and financial modeling
Familiarity with, and the ability to effectively work with, relevant organizations in carbon finance (e.g. UNFCCC, World Bank, IETA, GEF etc)

Language Requirements

Fluency in English is required (written and verbal). Proficiency or working knowledge of another UN language is an advantage.

Click here for important information for US Permanent Residents ('Green Card' holders).

http://jobs.undp.org/cj_view_job.cfm?job_id=22672

Job Vacancy President of El Nino Ventures Inc Vancouver BC Canada

Pacific North West Capital — Thu, 07 Apr 2011 09:50:27 -0700

Closing Date: June 6, 2011

Doing Good While Doing Well Lets Make it Legal

Paula Goldman — Tue, 05 Apr 2011 16:20:22 -0700

Shannon Walker - President of WhistleBlower Security comments: This is an interesting development in the evolution of the “corporation”. A bill in California will cast the largest possible net to allow corporations to pursue profits and socially responsible activities simultaneously and legally. Currently, American laws do not allow publicly traded companies to pursue activities which do not support bottom line enhancing goals. The proposed bill will allow for hybrid of organizations that both pursue profits but encourage and promote socially responsible activities.

On Wednesday, the California State legislature will be reviewing SB201, a landmark bill that would create a new corporate form known as the Flexible Purpose Corporation.

Why is this important?

Right now, instead of recognizing that business and market-based strategies have the potential to bring positive social change to millions, we have legal structures that actively deter such possibilities.

If you want to create an organization focused solely on making profits, the law knows how to deal with you. If you want to create en entity focused only on creating social good, the law knows how to deal with you as well. But if you want to do both, you're caught between a rock and a hard place.

Under current California law, officers of publicly held corporations can be sued for any actions that are seen to create a trade-off with financial returns. It doesn't matter if the effort is to green your environmental footprint, support an underserved population, or even benefit your own employees. Unless you can prove the action benefits your bottom line, you risk a lawsuit.

This bill changes that. It enshrines a simple common sense principle, one to which all of us should be able to agree. So long as you're transparent with your investors, the law shouldn't punish you for trying to do good while doing well.

This should hold true no matter where you fall on the spectrum, whether you're a social enterprise that exists mostly to benefit society, or a mega multinational for whom profits come first, or somewhere in the middle.

If you've been following recent trends in the sector, you will know that California isn't the first to be considering this concept. Vermont, Maryland and several other states have recently enacted legislation creating alternate corporate forms, including benefit corporations, as well as L3Cs (Low-profit Limited Liability Companies).

This bill pursues a similar purpose. It casts the widest possible net so that all of those who wish to pursue both profit and positive social good can do so.

Let's give SB201 our support. For all the hype about corporate social responsibility, such activities have little chance of becoming real priorities when legal structures punish people that pursue them seriously.

If you agree, call or email the California Senate Committee on Banking and Financial Institutions to let them know: (916)651-4102 or Eileen dot Newhall at senate dot gov.

http://www.huffingtonpost.com/paula-goldman/doing-good-while-doing-we_b_844251.html

What Are the Main Features of the SarbanesOxley Act

By Michael Haislip, eHow Contributor — Mon, 04 Apr 2011 09:30:57 -0700

The Sarbanes-Oxley Act of 2002 came in the wake of several high-profile corporate accounting scandals, including those involving Enron, WorldCom and Tyco International. Confidence in publicly traded companies collapsed when the media revealed the details of unethical insider trades, corporate hubris and corruption of outside auditors. Congress enacted the Sarbanes-Oxley Act, named after Sen. Paul Sarbanes (D-Maryland) and Rep. Michael Oxley (R-Ohio), to rein in such practices.

Greater Oversight of Accounting Practices

The act created the Public Company Accounting Oversight Board. The board regulates and inspects public accounting firms that deal with publicly traded companies. The act also requires CEOs and chief financial officers to establish internal accounting controls as a means to prevent fraud and malfeasance. These internal control summaries must be included in financial reports to increase corporate transparency. False statements on these internal control documents may subject company executives to criminal penalties.

Increased independence of auditors and analysts

Sarbanes-Oxley lessens the influence companies wield over auditors and accounting firms. In previous situations of corporate reporting fraud, investigators found inappropriately close business relationships between some companies and the firms that audited them. This gave the auditors a financial incentive to portray the company in a positive light. Sarbanes-Oxley basically allows auditing of auditors as an oversight technique.

Increased Penalties for Corporate Crime

Sarbanes-Oxley allows the Securities and Exchange Commission to penalize or bar securities professionals for inappropriate behavior, such as insider trading. The law also allows the SEC to punish executives who violate regulations. The SEC may bar executives convicted under Sarbanes-Oxley from directorships or officerships in public companies. The act increased prison sentences and fines for a number of corporate crimes. It also extended the statute of limitations for shareholders to sue for fraud or deceit perpetrated by the company.

Tighter Controls on Insider Activity

The act places greater controls on insider activities. The SEC defines an insider as an executive officer, a director or a shareholder with at least 10 percent of outstanding shares. The act requires faster reporting of insider trades to the SEC than previously required. Any insider trades must be reported within 48 business hours of the trade. The act also bars any insider trades during retirement fund blackout periods. Blackout periods occur when the fund experiences major changes. Participants are prohibited from changing their investment options during this blackout period.

http://www.ehow.com/info_8150844_main-features-sarbanesoxley-act.html

Subscribe to WhistleBlower Security's Newsletter

Facebook Fires Employee On Insider Trading Allegations

Halah Touryalai Working Capital — Mon, 04 Apr 2011 11:26:26 -0700

Facebook allegedly terminated an employee over allegations that he bought the company’s stock on the secondary market.

Michael Brown, manager of Corporate Development at Facebook, bought the shares back in September 2010, according to a report from TechCrunch.

A source told TechCrunch that Brown was terminated for violating Facebook’s policy that prohibits buying and selling of Facebook shares on secondary exchanges.

Such secondary exchanges offer investors a chance to buy and sell tough-to-trade assets like those of private companies like Facebook. Investors are buying up such shares through through companies like SecondMarket.

The sellers of privately held shares are usually former employees or early investors who are looking to cash out. And, of course, there are plenty of other investors eager to take those shares off their hands.

(Check out my colleague’s Steven Bertoni piece on SecondMarket creator Barry Silbert in the June 7 issue of Forbes where he notes that connecting buyers and sellers in the shares of privately-held tech companies was the company’s fastest-growing market.)

The secondary trading arena is getting extra attention these days in light of the SEC’s recent interest. In December, there were reports that the SEC was asking Facebook, Twitter, LinkedIn and Zynga for information related to trading activity of its private shares.

Facebook’s shares are particularly hot these days for obvious reasons including Goldman’s investment in the social networking company. Goldman Sachs investment in Facebook valued the company at roughly $50 billion. The firm invested $450 million of its own money and was planning to offer Facebook shares to high net-worth individuals investors

It’s been a bit of a bumpy ride since that news broke. There have been perceived conflicts of interest and regulatory concerns.

Right off the bat, Goldman feared that it’s deal with Mark Zuckerberg’s company was becoming too public. Regulators prohibit private offerings from being publicly promoted and Goldman was nervous that all the hype around its Facebook offering would be questioned by the SEC.

As a result of that and other concerns, Goldman pulled the offer away from U.S. investors and offered it instead to foreign investors only who are not subject to the same restrictions.

So, if the allegations about Brown buying and selling trades on the secondary market are true, then it will come as no surprise that Facebook fired him for it.

The TechCrunch story says Brown bought the shares back in September-that’s before the Goldman deal was announced. That may not matter if Facebook’s ban on trading secondary-market shares was in already in effect.

Regardless, the last thing Goldman and Facebook need before a potential IPO are their own insiders’ drawing more negative attention to the deal.

http://blogs.forbes.com/halahtouryalai/2011/04/01/facebook-fires-employee-on-insider-trading-allegations/

Bankers Powers Assessing the reach of DoddFrank

Scott Leibs - CFO Magazine — Fri, 01 Apr 2011 16:30:58 -0700

Is the Dodd-Frank Act the new Sarbanes-Oxley? While it does not saddle CFOs with an immediate, and expensive, regulatory burden for which they are directly responsible, its scope and complexity may ultimately make it far more influential on companies' operations.

For one, Dodd-Frank will affect all companies, not just the diminishing ranks of those that are publicly traded. And, as many observers have noted, its breadth (or height, if you consider its 2,300+ pages) is staggering, and will require years to fully implement. But the most maddening resemblance may be that, like 2002's Sarbox, it will take even longer for its efficacy, or lack thereof, to become apparent. Businesses already struggle with what may be the most defining aspect of the "new normal" — a prevailing sense of uncertainty regarding every aspect of the economy, from the vagaries of consumer demand to the impact of new regulations — and Dodd-Frank seems likely to exacerbate rather than mitigate that unease, at least in the short-term.

This issue's special focus on banking offers a look at two examples. As senior editor Vincent Ryan notes in "The Big Fail," the legislation doesn't fully settle the argument as to whether, or how, the government will bail out financial institutions deemed too big to fail. It does take some important steps in putting a fence around the issue, but leaves more wiggle room than many would like. As Ryan explains, there may be good reasons for that, but for those hoping that one legacy of the financial crisis would be total clarity around this issue, Dodd-Frank disappoints.

The law is also having a ripple effect regarding which banks you do, or don't, do business with. As senior editor Alix Stuart details in "A Small Problem," an impending wave of M&A activity in that sector can be traced, at least in part, to Dodd-Frank. That could force some CFOs to assess new banking partners on the fly. On the plus side, for the moment credit conditions have eased, and many CFOs are rushing to take advantage.

In more good news, our latest Duke University/CFO Magazine Business Outlook Survey, which marks its 60^th consecutive quarter with this iteration, continues to turn up additional signs of an improving economy. See "Spring Fever?" for a full rundown of your peers' attitudes and plans. And, for a lighthearted bit of perspective on the latest news, good and bad, see "2001: A Finance Odyssey." It's a useful reminder that volatility has been with us always.

http://www.cfo.com/article.cfm/14564847/c_14565154

Job United Nations Auditor P3 Internal Audit Division Geneva

United Nations - Careers — Thu, 31 Mar 2011 10:41:05 -0700

Job Opening

Job Title: Auditor, P3
Department/ Office: OFFICE OF INTERNAL OVERSIGHT SERVICES
Duty Station: GENEVA

Posting Period: 4 February 2011-5 April 2011
Job Opening number: 11-AUD-INTERNAL OVERSIGHT SERVICES-17253-R-GENEVA

United Nations Core Values: Integrity, Professionalism, Respect for Diversity

Org. Setting and Reporting
This position is located in the Internal Audit Division (IAD) of the Office of Internal Oversight Services (OIOS). The Auditor reports directly to the Senior Auditor/Chief of Section or to auditors in charge (team leaders).

Responsibilities
Audits/assignments are undertaken in the areas of finance, administration and operations. Incumbents at this level, work individually or as a member of an audit team. They may also lead smaller teams for mid-size or moderately complex operations.

Within delegated authority, the Auditor will be responsible for the following duties:

• Leads audits of smaller, less complex operations and supervises audit assistants on these assignments.
• Prepares/participates in preparations for risk-based audit plans/programmes in accordance with OIOS standards.
• Documents, evaluates and tests systems and controls to determine their adequacy and effectiveness to ensure (i) compliance with policies and procedures, (ii) accomplishment of management’s objectives, (iii) reliability and integrity of information, (iv) economic use of resources, and (v) safeguarding of assets.
• Prepares working papers for review by the auditor in charge or the Senior Auditor/Chief of Section.
• Reviews working papers prepared by assisting auditors for subsequent review by the auditor in charge or the Senior Auditor/Chief of Section..
• Develops and discusses findings; comes to agreement on recommendations and timelines for corrective actions with responsible officers of operations audited and monitors the implementation status of agreed recommendations.
• Drafts audit reports for entire assignment or portion of assignment.
• Takes initiative in identifying appropriate audit tools, best practices, and identifies/performs tasks aimed at ensuring that the audit/assignments are conducted in accordance with OIOS standards.
• Supervise and coach lower level staff
• The position entails frequent travel which may include hardship locations.
• Performs other projects or tasks as may be assigned.

Competencies
Professionalism
• Exercises due professional care by considering the: extent of work needed to achieve the audit plan; relative complexity, materiality, or significance of matters to which assurance procedures are applied; adequacy and effectiveness of risk management, control, and governance processes, probability of significant errors, irregularities, or non compliance; and cost of assurance in relation to potential benefits
• Demonstrates professional competence and has knowledge of auditing standards and practices, risk assessment, and applicable financial rules and procedures
• Identifies issues, formulates opinions and presents conclusions and recommendations
• Is alert to significant risks that might affect objectives, operations, or resources
• Considers the needs and expectations of clients, including the nature timing and communication of results
• Identifies issues, formulates opinions and presents conclusions and recommendations
• Has knowledge of specialized IT audit applications, such as IDEA, ACL, and AutoAudit
• Shows pride in work and in achievements
• Is conscientious and efficient in meeting commitments, observing deadlines and achieving results
• Is motivated by professional rather than personal concerns
• Shows persistence when faced with difficult problems or challenges
• Remains calm in stressful situations
• Takes responsibility for incorporating gender perspectives and ensuring the equal participation of women and men in all areas of work

Teamwork
• Works collaboratively with colleagues to achieve organizational goals
• Solicits input by genuinely valuing others’ ideas and expertise; is willing to learn from others
• Places team agenda before personal agenda
• Supports and acts in accordance with final group decision, even when such decisions may not entirely reflect own position
• Shares credit for team accomplishments and accepts joint responsibility for team shortcomings

Communication
• Speaks and writes clearly and effectively
• Listens to others, correctly interprets messages from others and responds appropriately
• Asks questions to clarify, and exhibits interest in having two-way communication
• Tailors language, tone, style and format to match the audience
• Demonstrates openness in sharing information and keeping people informed

Core Values
Core Values: Integrity, Professionalism and Respect for Diversity

Education
Advanced university degree (Master’s degree or equivalent) in business administration, finance, accounting or related field. A first-level university degree in combination with qualifying experience may be accepted in lieu of the advanced university degree. Certification as a Certified Public Accountant (CPA), Chartered Accountant (CA), Certified Internal Auditor (CIA), Certified Information Systems Auditor (CISA), or equivalent is desirable.

Work Experience
A minimum of five years of progressively responsible professional experience in audit, finance, accounting, administration, business administration/analysis, programme/project evaluation and monitoring, statistics, computer science or related area, Experience in auditing, preferably in the public sector, required.

Languages

English and French are the working languages of the United Nations Secretariat. For this post, fluency in English (both oral and written) is required. Knowledge of French or another UN official language is an advantage.

United Nations Considerations
The United Nations shall place no restrictions on the eligibility of men and women to participate in any capacity and under conditions of equality in its principal and subsidiary organs. (Charter of the United Nations - Chapter 3, article 8). The United Nations Secretariat is a non-smoking environment.

Assessment Method
Competency based interviews and other assessment methods as required.

Special Notice
- The appointment is limited to OIOS.
- Staff members are subject to the authority of the Secretary-General and to assignment by him or her. In this context, all staff are expected to move periodically to new functions in their careers In accordance with established rules and procedures.

No Fee

THE UNITED NATIONS DOES NOT CHARGE A FEE AT ANY STAGE OF THE RECRUITMENT PROCESS (APPLICATION, INTERVIEW MEETING, PROCESSING, OR TRAINING). THE UNITED NATIONS DOES NOT CONCERN ITSELF WITH INFORMATION ON APPLICANTS’ BANK ACCOUNTS.

https://inspira.un.org/psc/UNCAREERS/EMPLOYEE/HRMS/c/HRS_HRAM.HRS_CE.GBL?Page=HRS_CE_JOB_DTL&Action=A&JobOpeningId=17253&

Whistleblower Bookstore The Whistleblowers Handbook A StepbyStep Guide to Doing Whats Right and Protecting Yourself

By Stephen Martin Kohn — Thu, 31 Mar 2011 12:02:33 -0700

Product Description

Every single day, American workers by the thousands report fraud, violations of environmental rules, health and safety hazards, and political corruption. The National Business Ethics Survey reports that 56% of workers admit to witnessing serious misconduct at work, and more than half of them take the first step to report it. But there exists a maze of confusing state and federal laws that govern whistleblowing, protect employees, and sometimes provide for large monetary rewards for whistleblowers who do the right thing. Ignorance of the proper steps to expose wrongdoing too often leads to silence, lost court cases, public embarrassment, and a failure to effect real change. But when done right, whistleblowing has strengthened democracy, protected the environment, and saved taxpayers and investors billions of dollars. Modern whistleblower laws have created a powerful tool for effective grassroots participation.

Now, from the nation’s leading whistleblower attorney, comes the first-ever consumer guide to whistleblowing. In The Whistleblower’s Handbook, Stephen Martin Kohn explains nearly all federal and state laws regarding whistleblowing. In the step-by-step bulk of the book, he also presents twenty-one rules for whistleblowers.

http://astore.amazon.com/whistsecur-20

Job Policy Specialist Anticorruption Bratislava Slovak Republic

UNjobs Association of Geneva — Tue, 29 Mar 2011 09:49:28 -0700

Closing Date: Monday, 11 April 2011

Background

Please note that this is Development Project Funded (DPF) post.

The Policy Analyst will work at the UNDP Bratislava Regional Centre for Europe and the CIS in the area of Democratic Governance, providing advisory support and knowledge management services on Anti-corruption, managing the activities of the Regional Anti-Corruption Project and backstopping the activities of the Global Thematic Program on Anti-Corruption for Development Effectiveness (PACDE) in the Europe and CIS Region.

The day-to-day supervision and mentoring will be exercised by the Public Administration Reform and Anti-Corruption Policy Specialist. Interaction with the supervisors will take place on a regular basis, thus allowing continuous performance monitoring.

Duties and Responsibilities

Summary of key functions:

Research and advisory support on anti-corruption to UNDP Country Offices in the region
Knowledge management activities and facilitation of professional networks (internal and external)
Support to regional programmatic activities in anti-corruption
Support to corporate and global initiatives on anti-corruption
Others

1. Research and advisory support to UNDP Country Offices on anti-corruption

Provide analysis, research and technical backstopping to the Public Administration Reform and Anti-Corruption Policy Specialist and to UNDP Country Offices (COs) in the region for the development and implementation of projects and programmes in the area of anti-corruption (covering issues such as implementation of the UN Convention Against Corruption and related self assessment mechanism, anti-corruption in basic pubic services, prevention of corruption and integrity systems).
Conduct missions to the countries of the region to develop capacities of national counterparts and COs to programme strategic interventions in the area of anti-corruption, integrity, transparency and public accountability.
Support and implement capacity development initiatives in the area of anti-corruption, integrity, transparency and public accountability based on the needs of UNDP COs and other stakeholders.
Provide timely and quality inputs to effective policy and programme support services at the request of the COs.

2. Knowledge management activities and facilitation of professional networks (internal and external)

Keep abreast of research and policy developments in the area of Anti-Corruption (AC)
Support the facilitation of UNDP's regional Community of Practice on Public Administration Reform and Anti-Corruption;
Conduct analysis and prepare reports on trends and issues in the field of AC in Europe and the CIS;
Coordinate and support the analysis of case evidence; methodology development; knowledge products on anti-corruption related issues;
Support the process of developing knowledge products, by codification of experiences and lessons learnt at the national and regional levels
Supports existing partnerships with counterparts such as Anti-Corruption Agencies and practitioners, International Organizations, Think-Tanks and NGOs.

3. Support to regional programmatic activities in anti-corruption

Act as project manager for UNDP's regional Anti-Corruption project
Effectively apply Results-based management tools, set project management targets, monitor and report achievement of results
Organize conferences and seminars related to various issues within the AC portfolio
Liaise with CO colleagues and participate in country assessment missions to identify and develop pilot initiatives and linkages between country and regional programmes in the area of AC.

4. Support to corporate and global initiatives on anti-corruption

Backstopping of the activities of the Global Thematic Program on Anti-Corruption for Development Effectiveness (PACDE) in the Europe and CIS Region
Quarterly communications with Global Manager on the status of implementation

5. Others:

Follow-up on the UNCAC-related political processes, act as focal point for coordination with UNODC in this respect and on a case-by-case basis represent UNDP in technical meetings.
Provide both internal and external clients with timely and adequate support/information on programme activities;
Update and enrich the WIDE expert roster with quality consultants with specific experience in and sensitivity towards Europe and the CIS;
Preparation of talking points and presentations on anti-corruption issues;Preparation of briefing notes for relevant meetings and events when requested.
Carry out other duties as necessary relevant to the above mentioned thematic areas.

Competencies

Corporate Competences:

Demonstrates commitment to UNDP`s mission, vision and values
Displays cultural, gender, race, nationality and age sensitivity and adaptability
Promotes the vision, mission, and strategic goals of UNDP
Treats all people fairly without favoritism

Functional Competences:

Development and Organizational Effectiveness:

Ability to perform a variety of specialized tasks related to Results Management, including support to design, planning and implementation of the programme, managing data, reporting.
Ability to provide input to business processes re-engineering.
Ability to lead formulation, implementation, monitoring and evaluation of development programmes and projects, mobilize resources
IT literacy, familiarity with e-presentation techniques and ability to operate with on-line web-based applications

Leadership and Self-Management:

Focuses on result for the client and responds positively to feedback
Consistently approaches work with energy and positive, constructive attitude
Remains calm, in control and good humor even under pressure
Demonstrates openness to change and ability to manage complexities
Sense of initiative and willingness to embrace additional responsibilities in team work;
Builds strong relationships with clients and external actors;
Demonstrated ability to work in an independent manner; ability to organize work efficiently and deal with a heavy workload

Key Competences:

Substantive understanding of achievements and challenges inherent to transition toward democracy in Europe and the countries of the former Soviet Union;
Extensive knowledge of the theoretical framework supporting policies and programming in the area of anti-corruption, transparency and public accountability.
Extensive knowledge of legal and institutional frameworks for prevention of corruption in particular in the Eastern European and the CIS region.
Extensive knowledge of UNDP Capacity Development framework
Good knowledge of international development issues, with emphasis on good governance and democratic institution building;
Excellent problem-solving and communication skills;
Clear and convincing writing style;
Confirmed ability to adjust to new situations quickly, to work efficiently under pressure and to meet deadlines;
Programme/project design and management skills;
Analytical thinking and research skills;

Knowledge Management

Good Networking and inter-personal / social skills
Promotes a knowledge sharing and learning culture in the office
Actively works towards continuing personal learning and development in one or more Practice Areas, acts on learning plan and applies newly acquired skills

Required Skills and Experience

Education

Master's degree or equivalent in one of the following fields: political science, public administration, development studies, international relations, law, social sciences.

Experience

5 years of relevant experience, preferably in international organizations, experience in the Eastern Europe and the CIS Region is an advantage.
Experience in the area of institutional capacity development for anti-corruption.
Experience in project management.
Experience in the usage of computers and office software packages, experience in handling of web.2 tools an asset, experience of ATLAS system an asset.

Language Requirements

Fluency in spoken and written English.
Knowledge of Russian, South-Slavic or other regional languages is an advantage.

UNDP Bratislava Regional Centre, RBEC
Grosslingova 35
811 09 Bratislava, Slovak Republic
Phone: +421-2-59337-111, Fax: +421-2-59337 450

http://unjobs.org/vacancies/1301337245946

International Consultant for Monitoring and Reporting on State Actions against Corruption ACT Project Kabul Afghanistan

UNDP - UN's global development network — Tue, 29 Mar 2011 10:37:33 -0700

Closing Date: Monday, 11 April 2011

Background

UNDP is the UN's global development network, an organization advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. We are on the ground in 166 countries, working with national counterparts on their own solutions to global and national development challenges.

UNDP Afghanistan supports the Government to find innovative solutions to its development challenges based on the on-going Country Programme Document approved by the Executive Board for the period 2006 – 2009. A new Country Programme Document was approved by the Executive Board during September 2009 for the period 2010-2013. Key priority areas for UNDP assistance are in strengthening democratic governance, crisis prevention and recovery, and reducing poverty. UNDP is strengthening the institutional capacities of key national government and sub-national authorities which aim to enhance human security, human development, peace and stability in Afghanistan.

Corruption constitutes a serious problem in Afghanistan. According to a survey conducted by Transparency International in 2004, corruption outranks security in terms of the main challenges which the government must address. In 2009, Afghanistan was ranked as the second most corrupt country in the world according to Transparency International's Corruption Perceptions Index. The national Integrity Watch Afghanistan 2010 survey Afghan Perceptions and Experiences of Corruption states that “The Afghan population as a whole paid twice as much in 2009 as it had paid in 2006. Bribery today represents a burden of 1 billion USD on the Afghan GDP. One adult in seven experienced the direct bribery in Afghanistan in 2009 while 28% of Afghan households paid a bribe to obtain at least one public service.”

There are several reasons for this. In an environment where access to justice and enforcement of the law is limited, there is a lack of adequate processes and procedures for the performance of government functions and service delivery, and corruption has become a means for survival. As a result, corruption has become a high reward, low risk activity. Decades of war and repression, weak state authority, the omnipresent threat of violence, the high discretionary powers of public officials, low civil service salaries and the weakness of the judiciary and legal enforcement system has led to a culture of corruption and impunity, with limited transparency and accountability in the use of public resources. There is no doubt that corruption poses a considerable threat to sustainable peace and development in Afghanistan, and fighting corruption is increasingly seen as one of the key priorities of the Government of the Islamic Republic of Afghanistan (GIRoA) and the international community. Ultimately minimizing corruption is a prerequisite for rebuilding the country and the creation of a legitimate, peaceful and pluralistic state.

The commitment to fight corruption was publicly stated by GIRoA and the international community during several International Conferences in Support of Afghanistan, held in Paris, London, and Kabul. Several key steps have been taken by GIRoA in the fight against corruption including the ratification of the United Nations Convention Against Corruption (UNCAC) on 25 August 2008, the finalization if the NACS, and the establishment of the HOO. While steps have been taken in the direction it is critical that rhetoric is transformed into concrete action and the complex set of institutions involved in the fight against corruption are coordinated to ensure a comprehensive and effective response to corruption. To ensure this, UNDP is supporting the establishment of an independent Monitoring and Evaluation Committee to assess the anti-corruption efforts of the GIRoA. Civil society organizations will play an active role in providing data to the committee through monitoring of state actions and reporting on them.

Duties and Responsibilities

OBJECTIVE OF THE ASSIGNMENT

Supporting the government's holistic anti-corruption strategy requires a novel mechanism for international assistance. It is an empirical fact that every Member State of the United Nations that has experienced and benefitted from improvements in the prevention and combat of public and private sector corruption, has established a functionally independent framework to monitor and evaluate the executive branch's efforts to combat and prevent corruption and, while its civil society engaged in an operational social control of the state.

The Government of Afghanistan (GoA) has committed itself to the establishment of an independent committee to offer policy advice and monitor and evaluate progress against specific benchmarks. The Monitoring and Evaluation Committee (MEC) members, supported by technical staff, will also act in their capacity as an expert panel addressing the ways and means to tackle corruption with independence. The Committee will determine its own operating procedures. The MEC will have the sole authority to determine the content of its reports, which must be published periodically. All such reports will be available to the President, Parliament, and the people of Afghanistan through the media. They will also be made available to the international community. Reports will provide an assessment against agreed benchmarks but may also choose to examine specific themes or sectors. Special emphasis will be on establishment of various boards, including civil society board, to provide information to the MEC reports.

The objective of this assignment is to provide capacity building support to civil society members interested to become part of the civil society board of the MEC and the Civil Society Networks to be established for the MOF and MOE. The capacity building support will include training on how to monitor and report on state action against corruption and how to receive and follow up on complaints received from the public.

SCOPE OF THE ASSIGNMENT:

The job description for International Consultant for Monitoring and Reporting on State Actions against Corruption includes:

Collect, analyze and contextualize knowledge, information, and best practices on monitoring and reporting state action against corruption by the civil society organizations.

Develop a training manual for the CSOs on how to monitor and report on state action against corruption.

Prepare training material and deliver training to a network of CSOs on monitoring and reporting state action against corruption.

Collect, analyze and contextualize knowledge, information, and best practices on handling and follow up of complaints by the civil society organizations.

Develop a training manual on complaints handling and follow up by civil society working closely with the government anti-corruption institutions.

Prepare training material and deliver training to civil society networks established to receive complaints from the public and to follow up on complaints with relevant government institutions.

In consultation with the civil society board, prepare a draft framework for monitoring and reporting by the civil society to the MEC.

In consultation with the relevant institutions, prepare a framework for complaints handling and follow up by civil society organizations.

The International Consultant for Monitoring and Reporting on State Actions against Corruption will be under the overall guidance and management of the Project Manager and direct supervision of the Grants Manager.

The International Consultant will work in close consultation with the HOO, MOE, MOF as well as the relevant team of ACT Project.

OUTPUT OF THE ASSIGNMENT:

The consultant will be expected to provide the following outputs:

A manual and training material on monitoring and reporting state action against corruption.

A manual and training material on receiving and follow up of complaints by civil society organizations.

Draft framework for monitoring and reporting on state action against corruption.

Draft framework on complaints receiving and follow up by civil society networks working with the government institutions

DURATION AND COMMENCEMENT OF THE ASSIGNMENT:

This work will be undertaken during mid April to mid June 2011 to align with the other parallel activities already underway.

Competencies

Corporate Competencies:

Demonstrates integrity by modeling the UN's values and ethical standards (human rights, peace, understanding between peoples and nations, tolerance, integrity, respect, results orientation (UNDP core ethics) impartiality;

Promotes the vision, mission, and strategic goals of UNDP;

Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability.

Functional Competencies:

Management and Leadership

Experience in conducting surveys, assessments (in particular anti-corruption)

Consistently approaches work with energy and a positive, constructive attitude;

Demonstrates good oral and written communication skills; Demonstrates openness to change and ability to manage complexities

Proven ability to lead and motivate staff in challenging environments;

Ability to develop and manage professional relationships;

Ability to develop capacity and competencies of staff and to transfer skills.

Behavioral competencies:

Ability to work effectively with government and donor counterparts;

Proven experience in knowledge transfer and capacity development;

Excellent networking skills;

Excellent written and verbal communication skills;

Treats all people fairly and without favouritism.

METHODOLOGY IN UNDERTAKING THE ASSIGNMENT:

In carrying out the assignment, the contractor shall:

The Contractor will review all existing project documents, periodic reports and project outputs, the Afghanistan National Development Strategy, UNDP Country programme, documents related to the HOO, and other relevant documents; consult extensively with project partners and stakeholders, UN personnel, other agencies/ donors (UNIFEM, GTZ, USAID, CIDA, SIDA, UNFPA, UNICEF, JICA, etc.) mechanisms, and consult extensively with officials of the HOO involved in anti-corruption work.

Required Skills and Experience

Education:

Master's degree in Public Administration, Development Studies, Law, International Relations, or other relevant field.

Knowledge of Afghanistan is preferable. Previous experience of working with Government of Afghanistan an asset.

Experience:

Minimum 5 years experience and proven technical track record in anti-corruption and public administration reforms.

Five to ten years of relevant work experience in the field of governance, with a particular focus on transparency and accountability.

Proven ability to develop training manuals and deliver trainings.

Experience in anti-corruption especially complaints receiving and follow up.

Experience in monitoring and reporting.

Knowledge and experience of social audit and social budget auditing.

Language:

Fluency in English, Knowledge of Pashto and Dari (Preferred)

International:

Interested and qualified International candidates should apply on-line through the UNDP Jobs site: http://jobs-admin.undp.org/cj_view_job.cfm?job_id=22592

Please ensure that you upload your UN Personal History Form-P11 available at http://www.undp.org.af/jobs/index/htm in the relevant field of the on-line applications.

Incomplete applications or applications received after the closing date 11 April 2011 will not be given consideration. Please note that only applications who are short-listed will be contacted. For more detailed information about UNDP Afghanistan please visit our website at http://www.undp.org.af Candidates, who are currently holding UNDP or UN Agencies contracts, are asked to declare the type contract and duration, in their application.

Female candidates are highly encouraged to apply

http://unjobs.org/vacancies/1301337240451

Better whistleblower protection needed

By Elizabeth James, Special To North Shore News — Mon, 28 Mar 2011 09:44:45 -0700

". . . expressing truths that are inconvenient to those in power is inherently dangerous and can cause serious harm to you, your career and your family's wellbeing, even to your physical and mental health."

Federal Accountability Initiative for Reform (FAIR), Feb. 2011

Most of us cannot know what goes on behind the closed doors of the governments and corporations that, to a large extent, decide how we live our lives.

So when politicians, staff or corporate executives behind those doors engage in unscrupulous deeds, our systems of accountability become essential to our financial, environmental and social wellbeing.

Should the systems fail -- because they were underfunded, badly drafted or circumvented -- citizens are left with few protections.

Journalists offer some comfort, if and when they can get at the facts by going undercover or via a flawed access-to-information process.

Independent officers like auditors-general and ombudsmen, underfunded in B.C., give us more assurance that someone is watching the store, as does the federal parliamentary budget officer.

But when all else fails, we must rely on the courage of ethical individuals on the inside who remain determined to see truth and integrity prevail.

In Dec. 2002, Time Magazine named three whistleblowers -- Sherron Watkins of Enron, Coleen Rowley of the FBI and Cynthia Cooper of WorldCom -- its persons of the year. In doing so, the magazine said that although "their lives may not have been at stake," the three "put pretty much everything else on the line. "Their jobs, their health, their privacy, their sanity -- they risked all of them to bring us badly needed word of trouble inside crucial institutions."

For more than two years, that is precisely what employees inside the office of Christiane Ouimet, Canada's former public sector integrity commissioner, tried to do for us.

And for their pains, we let them down.

In releasing FAIR's "damning critique of (the) federal whistleblower protection law," executive director David Hutton was referring to the Public Servants Disclosure Protection Act (PSDPA).

Ostensibly, the act was intended to protect government employees from retaliation should they report what they believed to be acts of wrongdoing on the part of their colleagues or superiors.

But as FAIR's analysis reveals, when it came to protecting employees in Ouimet's office, the legislation was a disturbing failure.

This was confirmed in a December 2010 report by Auditor General Sheila Fraser, who reported that 24 employees left the office between Aug. 5, 2007 and July 31, 2009.

Noting that this "amounted to an average turnover rate of over 50 per cent per year," Fraser went on to observe that the numbers "included the departure of the majority of staff in senior positions who reported directly to the commissioner."

Worst of all is the fact that the departing PSIC employees -- most of whom had years of exemplary public service in their resumes -- endured the overt and subtle retaliations from which the legislation purports to protect them.

Federal employees may be worse off than would-be whistleblowers in the private sector, where a growing number of businesses are taking matters into their own hands and using the services of companies like Shannon Walker's WhistleBlower Security. www.whistleblowersecurity.com

Walker -- otherwise known as West Vancouver's Coun. Walker -- agrees there is a need for blanket legislation to protect both public and private sector employees. But she also says the protections offered by WhistleBlower Security and by U.S.-based EthicsPoint go beyond legislative solutions to enhance accountability, protect against fraud and to encourage ethical workplaces.

Such services, together with legislation like the U.S. Sarbanes-Oxley Act and other whistleblower legislation enacted since 2002, might well have arrested the corporate wrongdoings that caused the downfall of Enron and WorldCom. Furthermore, had the warnings of FBI staff attorney Rowley been heeded, it is conceivable that the extent of New York's 9-11 disaster might have been mitigated.

Unfortunately, improved Canadian legislation will come too late for those who suffered what may well be career-ending reprisals by Ouimet. Even more galling is that when Ouimet resigned in the midst of Fraser's probe of her office, it was she rather than her beleaguered victims who walked away with a taxpayer-funded $530,000 severance package.

From the misuse of municipal golf course accounts to the BC Rail deal; from Liberal sponsorships to Lehmann Brothers; and from the Gulf of Mexico oil spill to the doctoring of climate-change reports -- locally, nationally, internationally, we've seen the need. Employees "on the inside" are often in the only position to protect us, not just against Time's "black comedy of corporate fraud," but also against ticking time-bombs within governments, unelected agencies like TransLink, and inside so-called public corporations like BC Hydro and B.C. Ferries.

Surely, their courage earns them the right to be protected in return?

http://www.nsnews.com/life/Better+whistleblower+protection+needed/4489652/story.html

Director ComplianceChief AML CAMLO ResMor Trust Company

ResMor Trust Company — Thu, 24 Mar 2011 10:47:17 -0700

The Director, Compliance/Chief Anti-Money Laundering Officer (CAMLO) provides Anti-Money Laundering/Anti-Terrorist Financing (AML/ATF) subject matter expertise at the enterprise, regulatory and industry level. The incumbent leads the development of group policies and procedures, advising on complex questions and issues as necessary. The individual shall continuously improve the AML/ATF program to monitor adherence to applicable regulations and policies for the business units supported. Key requirements for this position are subject matter expertise and strong verbal/written communication skills. The Director, Compliance/Chief Anti-Money Laundering Officer (CAMLO) reports directly to the Chief Compliance Officer. Requisition ID 16804.

https://ally.myvurv.com/MAIN/careerportal/Job_Profile.cfm?szOrderID=16804&szReturnToSearch=1&szWordsToHighlight=

Chief Trade Policy & Governmental Cooperation Section P5

United Nations Economic Commission — Fri, 18 Mar 2011 09:33:36 -0700

Job Title: Chief, Trade Policy & Governmental Cooperation Section, P5
Department/ Office: Economic Commission For Europe
Duty Station: Geneva

Posting Period: 3 February 2011-4 April 2011
Job Opening number: 11-ADM-ECONOMIC COMMISSION FOR EUROPE-16873-R-GENEVA(G)

Org. Setting and Reporting: This position is located in the Trade and Timber Division at the United Nations Economic Commission for Europe

https://inspira.un.org/psc/UNCAREERS/EMPLOYEE/HRMS/c/HRS_HRAM.HRS_CE.GBL?Page=HRS_CE_JOB_DTL&Action=A&JobOpeningId=16873

Email for a Free Demo Receive 10% off WhistleBlower Services

Shannon Walker — Fri, 18 Mar 2011 11:08:00 -0700

Contact WhistleBlower Security today and receive 10% off your Annual Subscription - Can you Afford Not To?

To learn more about WhistleBlower Security:

Email: info@whistleblowersecurity.com

WhistleBlower Security Inc.
1455 Bellevue Avenue #300
West Vancouver, BC, V7T 1C3
website: www.whistleblowersecurity.com

Subscribe to WhistleBlower Security's monthly Newsletter

View

Another Inside Job

Another Inside Job — Thu, 17 Mar 2011 11:55:06 -0700

Shannon Walker - President, WhistleBlower Security Inc. says: Interesting op-ed piece about the ongoing ethical and systemic dysfunction within the US banking system

The immediate flashpoint is a proposed settlement between state attorneys general and the mortgage servicing industry. That settlement is a “shakedown,” says Senator Richard Shelby of Alabama. The money banks would be required to allot to mortgage modification would be “extorted,” declares The Wall Street Journal. And the bankers themselves warn that any action against them would place economic recovery at risk.

All of which goes to confirm that the rich are different from you and me: when they break the law, it’s the prosecutors who find themselves on trial. To get an idea of what we’re talking about here, look at the complaint filed by Nevada’s attorney general against Bank of America. The complaint charges the bank with luring families into its loan-modification program — supposedly to help them keep their homes — under false pretenses; with giving false information about the program’s requirements (for example, telling them that they had to default on their mortgages before receiving a modification); with stringing families along with promises of action, then “sending foreclosure notices, scheduling auction dates, and even selling consumers’ homes while they waited for decisions”; and, in general, with exploiting the program to enrich itself at those families’ expense.

The end result, the complaint charges, was that “many Nevada consumers continued to make mortgage payments they could not afford, running through their savings, their retirement funds, or their children’s education funds. Additionally, due to Bank of America’s misleading assurances, consumers deferred short-sales and passed on other attempts to mitigate their losses. And they waited anxiously, month after month, calling Bank of America and submitting their paperwork again and again, not knowing whether or when they would lose their homes.”

Still, things like this only happen to losers who can’t keep up their mortgage payments, right? Wrong. Recently Dana Milbank, the Washington Post columnist, wrote about his own experience: a routine mortgage refinance with Citibank somehow turned into a nightmare of misquoted rates, improper interest charges, and frozen bank accounts. And all the evidence suggests that Mr. Milbank’s experience wasn’t unusual.

Notice, by the way, that we’re not talking about the business practices of fly-by-night operators; we’re talking about two of our three largest financial companies, with roughly $2 trillion each in assets. Yet politicians would have you believe that any attempt to get these abusive banking giants to make modest restitution is a “shakedown.” The only real question is whether the proposed settlement lets them off far too lightly.

What about the argument that placing any demand on the banks would endanger the recovery? There’s a lot to be said about that argument, none of it good. But let me emphasize two points.

First, the proposed settlement only calls for loan modifications that would produce a greater “net present value” than foreclosure — that is, for offering deals that are in the interest of both homeowners and investors. The outrageous truth is that in many cases banks are blocking such mutually beneficial deals, so that they can continue to extract fees. How could ending this highway robbery be bad for the economy?

Second, the biggest obstacle to recovery isn’t the financial condition of major banks, which were bailed out once and are now profiting from the widespread perception that they’ll be bailed out again if anything goes wrong. It is, instead, the overhang of household debt combined with paralysis in the housing market. Getting banks to clear up mortgage debts — instead of stringing families along to extract a few more dollars — would help, not hurt, the economy.

In the days and weeks ahead, we’ll see pro-banker politicians denounce the proposed settlement, asserting that it’s all about defending the rule of law. But what they’re actually defending is the exact opposite — a system in which only the little people have to obey the law, while the rich, and bankers especially, can cheat and defraud without consequences.

http://www.nytimes.com/2011/03/14/opinion/14krugman.html?src=un&feedurl=http%3A%2F%2Fjson8.nytimes.com%2Fpages%2Fopinion%2Findex.jsonp

A version of this op-ed appeared in print on March 14, 2011, on page A25 of the New York edition.

UNDP Vacancy Whistleblower protection provisions Consultant

UNDP — Thu, 17 Mar 2011 13:35:31 -0700

UNDP Vancacy: Consultant to support drafting of whistleblowers' protection provisions, in compliance with international standards, home based and Podgorica, Montenegro.

http://unjobs.org/vacancies/1300358133510

Closing Date: Tuesday, 29 March 2011

Network effects A massive insidertrading trial shakes Wall Street

the economist — Fri, 11 Mar 2011 10:15:37 -0800

Shannon Walker - President, WhistleBlower Security Inc.: The insider trading trial of Raj Rajaratnam, founder of Galleon, a hedge fund, began in New York. This trial represents the profound swinging of the pendulum with the SEC and federal prosecutors as they battle to demonstrate they are seriously taking on Wall Street. It should last ten days and should be a fascinating spectacle to watch, as titans of finance are called to the witness stand. Stay tuned

“RAJ RAJARATNAM is not a master of the universe, but rather a master of the Rolodex.” That is how Robert Khuzami, director of enforcement at the Securities and Exchange Commission (SEC), described the hedge-fund titan in October 2009 when he was arrested for insider trading. Mr Rajaratnam used to be considered one of Wall Street’s cleverest investors. His hedge fund, Galleon Group, once managed $6.5 billion. But on March 9th, when the humbled Mr Rajaratnam showed up for the start of his trial, he didn’t look much like a master of anything, save his six-person defence team. http://www.economist.com/node/18334985?story_ID=18334985&fsrc=nlw|wwp|03-10-2011|business_this_week

Mr Rajaratnam is at the centre of one of the largest insider-trading cases in history. Government prosecutors allege that Mr Rajaratnam used his wide network of contacts, including executives at big companies like IBM and Intel, to track down non-public information which he then used for trades, raking in profits worth $45m. Many of his erstwhile friends and associates have already confessed to wrongdoing. Of the 26 people that the US Attorney’s office has charged in connection with Galleon, 19 have pleaded guilty. Mr Rajaratnam insists he is innocent and traded only on the basis of public information.

The trial is expected to last ten weeks and could feature as many as 102 witnesses, including some of Wall Street’s top brass. Lloyd Blankfein, the boss of Goldman Sachs, and David Viniar, the bank’s chief financial officer, may testify. Rajat Gupta, a former boss of McKinsey whom the SEC charged on March 1st with providing tips to Mr Rajaratnam, may be summoned, too. It is not clear yet whether Mr Rajaratnam himself will take the stand. Federal prosecutors will play recordings of phone conversations during the trial, so his voice will be heard regardless.

A jury of 12 people will decide the fate of Mr Rajaratnam, who could spend up to 20 years in jail if he is convicted, according to some estimates. Given these high stakes, it is no surprise that selecting the dozen jurors was a painstaking process. Mr Rajaratnam’s lawyers expressed concern that the SEC’s charges against Mr Gupta could bias a jury. There is also the public’s resentment of Wall Street. Richard Holwell, the judge trying the case, asked prospective jurors more than 50 questions to gauge their eligibility, including whether they were strongly biased against wealthy financiers who do million-dollar transactions. Two said they were, and were dismissed.

Mr Rajaratnam is not the only one who has a lot riding on the outcome of this case. After its failure to spot Bernie Madoff’s Ponzi scheme, the SEC is under pressure to prove it has got tougher on rogue hedge funds. The Galleon affair may be about insider dealing but the government has adopted heavy-duty crime-fighting tactics including wiretapping and raids. If Mr Rajaratnam is acquitted, it will be a huge embarrassment for prosecutors.

Others are also on edge. When the SEC first brought charges in the Galleon affair, Preet Bharara, the US attorney for the Southern District of New York, who is the lead prosecutor in Mr Rajaratnam’s trial, said it should be a “wake-up call for Wall Street”. Mr Bharara meant what he said. The SEC has been paying close attention to the use of “expert network” firms, which connect traders who want to know about a certain company or industry with consultants who can tell them about it. The firms are supposed to provide only details that are public, or can be found out legally (“market colour” is what people in the industry call it). But the SEC has raised concerns thatemployees at expert networks are going too far and sharing material, non-public information with those willing to pay for it.

Last November the agency charged a French doctor for allegedly tipping off a trader at a hedge fund about a death in a clinical drug trial. The doctor is thought to have served as a consultant at an expert network. Then, last month, the SEC charged ten people who were employees or clients of Primary Global, an expert network, with insider trading. Dozens of subpoenas have reportedly been sent out to other hedge funds, mutual funds, banks and expert networks to gather more information. More charges may soon follow.

The effect on parts of the hedge-fund industry has been chilling. So far this year at least three funds have announced plans to close down because of charges or raids by government officials, including Barai Capital Management (charged), Level Global (raided) and Loch Capital (raided). Level Global and Loch saw investors redeem money as soon as possible because of the raid, even though they haven’t been charged with any wrongdoing. “It’s McCarthyism,” says the boss of one hedge fund. “You’re dead if you’re accused. You’re guilty unless proven innocent. It’s really scary. It’s destroying businesses.”

Most fund managers prefer to bite their tongues. They are trying to spruce up their policies to avoid the government’s wrath and reassure their anxious investors. Some have suspended dealings with expert-network firms entirely, until the SEC clarifies its views on using them.

Many are putting more money toward beefing up their compliance departments, and setting out clear rules for when traders are allowed to talk to consultants. “Hedge funds are going to need to have the same quality of compliance officers that banks have,” says Stephen Bainbridge, a professor at University of California, Los Angeles, School of Law. One hedge-fund executive thinks that some funds will move to operating a single trading book, rather than multiple books, in order to have more oversight over individual traders for whose actions they are liable.

All of which makes an already difficult fund-raising environment for small funds even rougher. Investors want to make sure that managers have clear compliance policies in place. That favours larger funds, which can afford the extra safeguards. The industry’s assets under management are now back above pre-crisis levels (see chart). But of the more than $13.9 billion that investors put into hedge funds during the fourth quarter, 83% went to funds with more than $1 billion under management.

Even the largest funds are not safe from government scrutiny, however. Rumours abound that the SEC is trying to target one of the industry’s largest funds. And Mr Rajaratnam himself can attest that having billions of dollars under management does not keep you out of court.

http://www.economist.com/node/18334985?story_ID=18334985&fsrc=nlw|wwp|03-10-2011|business_this_week

from the print edition | Finance and Economics

WhistleBlower Securitys March 2011 Newsletter

Shannon Walker - President WhistleBlower — Thu, 10 Mar 2011 11:05:33 -0800

WhistleBlower Security is entering its sixth year of business and with this anniversary, we have re-launched our website to offer more timely news and features, additional capabilities in our reporting software and a growing network of resellers to expand our global reach of clients. We have also expanded our contact centre hotline hours to 24/7/365 – so whenever one of your employees calls in – they will have a live agent to speak with. We invite our current clients to visit the new site and become familiar with the enhanced software and encourage you to visit often for new features.

CLICK HERE TO READ WBS NEWSLETTER

Fraud charges laid in crane inspections

CBC News — Wed, 09 Mar 2011 17:49:09 -0800

Shannon Walker - President WhistleBlower Security Inc. - A simple scam. Nominal amounts of money. The real issue here is the lives put at risk and the liability exposure faced by those companies who unknowingly paid a non-certified inspector to inspect their cranes, forklifts and other industrial equipment. This is why, no matter what size of company, access to an ethics hotline is so important. Organizations that embrace empowerment and offer this service for their employees protect not only the employee but the integrity and reputation of the company. The question is, why wouldn’t you offer this service.

Engineer blew the whistle on forged signature, stamp

A B.C. man accused of posing as a commercial crane inspector and providing falsified inspection certificates is facing 49 fraud-related charges, police say.

RCMP allege Paddy Gene Doherty, 37, of Fruitvale, forged certification after performing inspections on cranes, forklifts, garage hoists, and other industrial equipment at approximately 27 businesses in 10 Kootenay communities between January and June of 2009.

Doherty is accused of defrauding businesses that paid him approximately $40,000 during that time period. Doherty is also being charged on several counts of "uttering a forged document" for allegedly forging a professional engineer's signature and an engineering certification stamp.

Cpl. Dan Moskaluk, an RCMP spokesman, said annual inspections are required on certain types of heavy machinery and before a tower or crane can be erected. A crane inspector must be certified by the Canadian General Standards Board (CGSB), and then must submit the inspection report to a professional engineer to review and provide a stamped certificate.

In a written release, Moskaluk said that checks showed that Doherty's CGSB certification had expired on Dec. 31, 2008.

"More alarming than the monetary loss to the businesses is the risk to the public and workers safety, considering that in some of the cases, the re-inspections by a certified inspector failed the equipment that had previously been approved by Doherty," Moskaluk said.

The investigation began in May 2009 after a B.C. professional engineer lodged a complaint with police.

A warrant has been issued for Doherty's arrest, but police have so far failed to locate him.

http://www.cbc.ca/news/canada/british-columbia/story/2011/03/05/bc-crane-inspector-fraud.html

Cancel disgraced commissioners cushy severance package advocacy groups

Postmedia News — Tue, 08 Mar 2011 10:25:49 -0800

Shannon Walker - President of WhistleBlower Security Inc. - Not only was Christiane Ouimet terminated for grossly abusing her power in the Office of Public Integrity, the Canadian government has awarded her $530,000 as part of her severance package. Where does the abuse end? First, out of 228 whistleblowing complaints, only 5 incidents were investigated and no action was taken. Then, Ms. Ouimet bullied, harassed and verbally abused her staff. This type of severe mismanagement needs to be addressed and the government needs to cancel the severance package. The only way to begin any kind of redemptive strategy is for the government to acknowledge the mistakes, make amends to both the victims and staff and make the necessary changes to the legislation so whistleblowers are truly protected.

OTTAWA — An alliance of more than 30 advocacy groups is urging the federal government to cancel a severance package worth more than $500,000 paid to a disgraced integrity commissioner after she resigned last fall.

Christiane Ouimet was appointed commissioner in April 2007 and tasked with protecting government whistleblowers seeking to disclose wrongdoing in the federal public sector.

But she abruptly resigned last October, just weeks before the auditor general released a scathing report slamming her for failing to do her job properly.

Last week, leaked documents detailing the conditions surrounding Ouimet's departure showed she walked away with a package worth more than $530,000.

"I can understand the outrage," said Liberal MP Joe Volpe, who chairs the committee investigating Ouimet's performance, and whose members can recommend government cancel the severance package. "We haven't heard from Ouimet to the conditions of the agreement . . . But she quit."

Both Volpe and the alliance of advocacy groups, called the Government Ethics Coalition, point out that severance packages tend to be paid to employees who are fired or asked to leave.

What's more, the alliance said, the average severance in Canada is paid at a rate of one to two weeks pay per year served.

Ouimet worked slightly less than half of her seven-year contract, and received 18 weeks of pay and benefits and an additional 28 weeks' pay for accrued and unused vacation.

The package also came with promises from Ouimet and the government to keep confidential details of her time in office, her departure and severance.

"Perhaps she did everything she was asked to do, and this agreement was part of the terms," Volpe said. "I don't know why she was given this money."

The Government Ethics Coalition is asking Volpe's committee to hear testimony from the government officials who negotiated the terms of her departure, and to recommend government cancel the severance.

Regardless, the Office of the Public Sector Integrity Commissioner has been seriously compromised, said David Hutton, executive director of Federal Accountability Initiative for Reform, an alliance member representing federal whistleblowers.

"Government generously rewarded Ouimet . . . whose misconduct for three years undermined efforts to combat misconduct within the public service," Hutton said in a statement issued Monday. "(Then government) secretly gagged both itself and Ouimet, apparently in an effort to prevent the full facts from emerging. It is still refusing even to promise meaningful action to fix its discredited whistleblower protection system."

Auditor General Sheila Fraser's report found Ouimet's office — which has an $11-million budget — investigated only five of 228 complaints filed during Ouimet's three-and-a-half-year tenure. No instances of wrongdoing were uncovered by Ouimet.

Ouimet also berated, intimidated and yelled and swore at her staff, the report said.

The Office of the Public Sector Integrity Commissioner is one of several watchdog offices whose heads are supposed to report to Parliament, not the government.

Seven of the watchdogs — some whose performance has also been scrutinized recently — recently sent a letter to the House, urging stronger parliamentary reviews of their appointments and performance.

The Government Ethics Coalition is comprised of 31 groups with a total membership of more than three million Canadians.

amisnky@postmedia.com

Twitter.com/amyminsky

The Whistleblowers Handbook

Shannon Walker — Tue, 01 Mar 2011 16:32:23 -0800

Shannon Walker, President of WhistleBlower Security: Today, a new book entitled The Whistleblower’s Handbook: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself, is being released. We have attached a link to the Amazon site where you can purchase this book.

Early Reviews of The Whistleblower’s Handbook:

"Whistleblowers should do two things: call us at 60 Minutes and read The Whistleblower’s Handbook. It’s 21 rules lay out the game plan for holding institutions accountable while protecting your job" Michael Radutzky, Senior Producer 60 Minutes

"As a whistleblower who has successfully won a case against the Federal Bureau of Investigation (FBI), I can attest to the fact that this is the definitive Bible for whistleblowers. Written by Stephen Kohn, the premiere whistleblower attorney in the United States, this handbook contains everything you will need to know about blowing the whistle, and surviving" Jane Turner, FBI Whistleblower and 25 year veteran agent

The Whistleblower’s Handbook opens a window into the controversial but vital role of whistleblowers in America’s workplace dating from the days of the Civil War. With compelling insider details, practical "rules" and rare insights, Stephen Kohn, the country’s leading whistleblower expert, has created the essential overview for CEO’s, CFO’s, GC’s, chief compliance officers, HR and audit professionals, and others who should be knowledgeable about this fundamental aspect of corporate life.

http://astore.amazon.com/whistsecur-20

JPMorgan Hid Doubts on Madoff Documents Suggest

By DIANA B. HENRIQUES, New York Times — Mon, 28 Feb 2011 09:21:07 -0800

Senior executives at JPMorgan Chase expressed serious doubts about the legitimacy of Bernard L. Madoff’s investment business more than 18 months before his Ponzi scheme collapsed but continued to do business with him, according to internal bank documents made public in a lawsuit on Thursday.

On June 15, 2007, an evidently high-level risk management officer for Chase’s investment bank sent a lunchtime e-mail to colleagues to report that another bank executive “just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme.”

Even before that, a top private banking executive had been consistently steering clients away from investments linked to Mr. Madoff because his “Oz-like signals” were “too difficult to ignore.” And the first Chase risk analyst to look at a Madoff feeder fund, in February 2006, reported to his superiors that its returns did not make sense because it did far better than the securities that were supposedly in its portfolio.

Despite those suspicions and many more, the bank allowed Mr. Madoff to move billions of dollars of investors’ cash in and out of his Chase bank accounts right until the day of his arrest in December 2008 — although by then, the bank had withdrawn all but $35 million of the $276 million it had invested in Madoff-linked hedge funds, according to the litigation.

The lawsuit against the bank was filed under seal on Dec. 2 by Irving H. Picard, the bankruptcy trustee gathering assets for Mr. Madoff’s victims. At that time, David J. Sheehan, the trustee’s lawyer, bluntly asserted that Mr. Madoff “would not have been able to commit this massive Ponzi scheme without this bank.” But with the case under seal, there was no way to gauge the documentation on which the trustee based his $6.4 billion in claims against the bank — until now.

In a statement, JPMorgan Chase strongly disputed Mr. Picard’s accusations and said it would “vigorously” challenge the claims in court.

The bank and Mr. Picard mutually agreed to unseal the complaint, which is one of dozens of big-ticket claims he has filed to recover assets for the victims of the Ponzi scheme. Other defendants include a half-dozen global banks, including HSBC in London and UBS in Switzerland, and the Wilpon family, the owners of the New York Mets.

To date, Mr. Picard has collected about $10 billion through settlements and asset sales; he estimates the total cash losses in the fraud at $20 billion.

In a statement released Thursday, the bank said the trustee’s complaint was “based on distortions of both the relevant facts and the governing law.” It denied that it had known about or played any role in Mr. Madoff’s fraud and dismissed the claim that it turned a blind eye to his activities to retain income from his business.

“Madoff’s firm was not an important or significant customer in the context of JPMorgan’s commercial banking business,” the statement said. “The revenues earned from Madoff’s bank account were modest and entirely consistent with conventional market rates and fees.”

As for Mr. Picard’s claim that the bank should have frozen Mr. Madoff’s bank account or reported his suspicious activity to regulators, the bank said, “At all times, JPMorgan complied fully with all laws and regulations governing bank accounts, including the regulations invoked by the trustee.”

Although lawyers redacted the names and specific positions of bank executives involved in the incidents described in the lawsuit, other information in the complaint makes it clear that many of them held prominent positions.

Deborah H. Renner, one of the trustee’s lawyers with Baker & Hostetler, reinforced that impression in a statement released Thursday. Ms. Renner said, “Incredibly, the bank’s top executives were warned in blunt terms about speculation that Madoff was running a Ponzi scheme, yet the bank appears to have been concerned only with protecting its own investments.”

One discussion of the bank’s “due diligence” on Mr. Madoff was aired on June 15, 2007, at a meeting of the bank’s hedge fund underwriting committee. According to the complaint, that committee was composed of “senior business heads and bankers, including individuals such as the chief risk officer and the heads of equities, syndicated leveraged finance, sales and hedge funds.”

News accounts identified the chief risk officer for Chase’s investment bank in June 2007 as John J. Hogan, who is currently a member of the bank’s executive committee.

The newly public material offers the clearest picture yet of the long and complex relationship between Mr. Madoff and Chase, the global institution that served as his primary bank since 1986.

What emerges is a sketch of an internal tug of war. One group of senior Chase bankers was pursuing profitable credit and derivatives deals with Mr. Madoff and his big feeder-fund investors, the hedge funds that invested their clients’ money exclusively with him. Another group was arguing against doing any more big-ticket “trust me” deals with a man whose business was too opaque and whose investment returns were too implausible.

For much of 2007, the tide was with the Chase bankers designing and selling complex derivatives linked to various Madoff feeder funds. By June of that year, they already had sold at least $130 million worth of the notes to investors, and they sought approval for deals that would have pushed that total to $1.32 billion, the lawsuit asserted.

The committee agreed to increase the bank’s exposure to Mr. Madoff only to $250 million, but by 2008, the bank’s risk management executives were gaining, backed up by suspicions raised by the “due diligence” teams visiting the large hedge funds that invested with Mr. Madoff.

After Mr. Madoff’s arrest, the complaint said, a bank employee referred to the agenda for a committee meeting that considered the Madoff deals in June 2007 and wrote, “Perhaps best this never sees the light of day again!!”

On the sidelines in this shoving match between the derivatives sales force and the risk management unit, according to the lawsuit, were the retail bankers who were responsible for monitoring the daily activity in Mr. Madoff’s bank accounts — activity that bore no resemblance to the normal patterns of a brokerage or investment management firm, according to Mr. Picard.

Even after it had begun to act on its suspicions about Mr. Madoff, Chase did not freeze his bank accounts or alert his regulators — or its own — to the unusual patterns in those accounts, the trustee contended.

The bank “had only to glance at the bizarre activity” in the Madoff accounts “to realize that Madoff was not operating a legitimate business,” the trustee asserted in the suit. The money coming in was not from the sale of securities, and the money going out was not for the purchase of securities — at a time when Mr. Madoff was supposedly making billions of dollars in trades as part of his investment strategy, the complaint asserted.

Mr. Picard’s lawsuit says that the door to Chase was opened for Mr. Madoff by one of his longtime investors, a wealthy Chase customer who was not identified in the complaint.

According to the trustee, the flow of money just between the Madoff accounts and this customer’s accounts should have set off warning bells at the bank.

On a single day in 2002, Mr. Madoff initiated 318 separate payments of exactly $986,301 to the customer’s account for no apparent reason, the trustee reported. In December 2001, Mr. Madoff’s account received a $90 million check from the customer’s account “on a daily basis,” according to the lawsuit.

Mr. Picard’s complaint does not speculate about the purpose of the transactions.

The transfers should have caused the bank’s money-laundering software to start flashing, Mr. Picard’s complaint asserted.

Kudos For OscarWinning Inside Job Michael Lewis On CNNs GPS

Robert Lenzner StreetTalk — Mon, 28 Feb 2011 10:46:40 -0800

Shannon Walker - President of WhistleBlower Security: I watched CNN’s GPS with guest Michael Lewis yesterday and was mesmerized by the sorry picture he presented of the US economy and political landscape. Then last night, Inside Job, was awarded the Oscar for Best Documentary. Read Robert Lezner’s blog to get a further indication of the ongoing saga of political and economic dysfunction in the US.

I celebrate the entirely deserved Oscar for documentary film, “Inside Job,” which surgically delved into the dissembling, creative misrepresentation of Wall Street and its perfidious regulators and apparatchiks in academia. I predicted the award in my October blog after seeing it the first time at the fim festival.

Charles Ferguson, the film’s director, has raised the nation’s awareness of the way finance is subsidized and protected by the political powers-that-be. His quiet outrage that no-one has gone to jail or had their cornucopia of wealth taken from them is understood on some level by the public. It is part of the reason for the rage throughout America.

So, it was exquisite timing that the remarkable story teller and scribe of all matters money, Michael Lewis, appeared before the Oscars on Fareed Zakaria’s GPS 360 Sunday morning show on CNN. ( I order every one of my readers to watch every Sunday and be enlightened on geopolitical/economic issues. Zakaria is the nation’s Number One TV source of enlightenment, with no left or right political credo.)

Here’s Lewis from the transcript of Zakaria’s show, pre-Oscars.

“A leadership that is intent on still stabilizing the financial system doesn’t have any interest in calling attention to the outrages of the financial system,” Lewis told Zakaria. “We have a system that’s essentially broken… the incredible thing is that there isn’t a social revolution.”

About Wall Street, Lewis nailed the reason why nobody has gone to jail or been banned from the financial services industry for life– as were the minor thugs of the NASDAQ tech stock bubble early last decade. He was answering “Inside Job” director Ferguson, and the rest of us.

Wall Street was “subsidized to profitability; they were able to use their influence to prevent political change,” Lewis said.

In my next blog I will give you my take on how the dissemblers outnumber the truth tellers on Wall Street, according to the findings of “The Financial Crisis Inquiry Report,” Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States.”

http://blogs.forbes.com/robertlenzner/2011/02/28/kudos-for-oscar-winning-inside-job-michael-lewis-on-cnns-gps/

Dubai Quality Group DQG 21st World Congress on Total Quality

Sunil Bahri, Director of Finance — Thu, 24 Feb 2011 16:06:52 -0800

WhistleBlower Security's Reseller Group: Dubai Quality Group attends 21st World Congress on Total Quality in Mumbai

Dubai Quality Group attends 21st World Congress on Total Quality in Mumbai Dubai Quality Group (DQG) participated in the 21st World Congress on Total Quality (WCTQ2011) held in Mumbai, India, between 28 January and 30 January, 2011.

The congress was organized by the Institute of Directors (IOD), the leading organization in the field of quality based in New Delhi, India, and founded by Dr. Madhav Mehra, President of the World Council for Corporate Governance, UK. The theme of the WCTQ2011 was "Leading 360 Transformations" through "i-Tear" (Innovation + Transparency + Engagement + Accountability + Responsibility). It was attended by eminent specialists from UK, USA, UAE and India and over 400 participants from major corporations from India and abroad. They shared views and exchanged opinions on their work in Quality & Excellence. DQG was represented by Mr. Sunil Bahri, Director of Finance, DQG and Mr. Prashant Nasery, Board Member, DQG, who submitted two working papers during the congress. The first, titled "Innovation through Business Excellence... Dubai Model," was presented by Mr. Bahri, and highlighted the achievements of the Business Excellence Department, Department of Economic Development, Government of Dubai and Dubai Quality Group. Mr. Nasery submitted the second paper under the Japanese title "Kaizen-Blitz" meaning "Rapid Improvement," highlighting the achievements made by CIP (Continuous Improvement Subgroup) of Dubai Quality Group. The congress was also attended by the Honorable Mr. K. Sankaranarayanan, Governor of Maharashtra and Mr. P. N. Bhagwati, Retired Chief Justice of the Supreme Court of India and Chairman of the 21st WCTQ2011.

With a significant presence in the congress, Mr. Sunil Bahri, on behalf of DQG, extended an invitation to all participants to attend the joint conference of Dubai Quality Group and American Society for Quality, to be held during 12 and 14 March, 2011, at the Dubai World Trade Centre.

http://www.ameinfo.com/256111.html

KaizenSox Consulting: http://kaizensox.com/

Officials want better protections for whistleblowers

ctvtoronto.ca — Fri, 18 Feb 2011 09:24:26 -0800

It is time that all municipalities across Canada embrace the simple but effective tool to identify areas of fraud: the anonymous hotline. As demonstrated through Toronto’s experience, employees will use these tools if they are made available. They will use them more, if the organization supports those who come forward and ensures the job and integrity of the person reporting. Every organization can benefit from this tool, but because of the sanctity of the taxpayers money, we should all be demanding that our governmental agencies engage in these services to protect the public purse.

http://toronto.ctv.ca/servlet/an/local/CTVNews/20110215/whistleblower-protection-at-city-hall-110215/20110215?hub=TorontoNewHome

Fraud

Shannon Walker - WhistleBlower Security — Thu, 17 Feb 2011 13:56:04 -0800

Fraud occurs in all aspects of our lives. Business, personal finances, charitable organizations, green ventures, health and insurance scams – it is a pervasive and prominent critical illness in our society. It can be prevented however, with the introduction of various risk mitigation strategies and learning the basics of protecting yourself and your organization. WhistleBlower Security provides one method of putting the first line of defense in place. Learn more by visiting our site and reading our blog which will provide updates on legal and regulatory opinions, new scams in the marketplace, case studies and educational features to assist you in the prevention of wrongdoing in your life.

Can you afford not to have WhistleBlower Security? click here - Features & Benefits

Religion Not Money Often Motivates Corporate Whistleblowers

By: Eamon Javers — Sat, 12 Feb 2011 14:57:37 -0800

Shannon Walker - President of WhistleBlower Security: An interesting article that describes the average whistleblower as being the best performers within the organization, more religious and more idealistic – their moral grounding tends to empower them to come forward.

As we worked on this series of reports, we were surprised by the similarities in the people who become whistleblowers.

Paul Burns | Lifesize | Getty Images

The experts say they see similar categories of people again and again. And though they’re quick to point out that anyone can become a whistleblower, certain traits stand out.

For one, whistleblowers can be deeply religious people, whose faith gives them an identity outside their corporate life.

Tom Cantor, who won $42 million in a whistleblower case against Quest Diagnostics [DGX Loading... () ], says he couldn't have done it without his religion. "Five years in a court was a really, really tough time,” he told me. “I had a bible verse in my hand. I read it every day: 'No weapon that is formed against you shall prosper'."

Cheryl Eckard, the whistleblower who won $96 million in a settlement with GlaxoSmithKline [GSK Loading... () ] last fall, told me she couldn’t have done it without her religion. “I can't imagine that a Christian would blow the whistle before another religion would,” she said.

“But you certainly—it helps to have faith, you know, in something. You have to believe in something. And for me, my faith in God carried me through this. I prayed my way through it.”

The key, say the lawyers, is that religious people have an anchor to their personal identity that isn’t caught up in their place in the corporate ladder. That independent identity doesn’t always have to come from religion. The whistleblower we identify as Mr. ABC, for example, told me his motivation came from having served in the military when he was younger.

“I guess I was too idealistic in having served in the Army after college, I was much more idealistic in general about how people approached the tax code,” he told me. “I didn’t know that compliance was optional.”

Whistleblowers are often upper middle managers—senior enough to know what's going on, but not the very top people in a company. And Wall Street's whistleblowers will likely come from the ranks of folks who deal with a company's most sensitive secrets.

"They're the people who are responsible for putting together the SEC reporting,” said Eric Havian, a lawyer who represents whistleblowers. “The people who are responsible for monitoring to make sure there is no foreign bribery going on. The people who are responsible to make sure there's no money laundering, or that you're not lying to the shareholders, you're not lying to the regulators.”

The experts also say that whistleblowers tend to be the very best performers in an organization, not the slackers. They're the people inside a company who are confident they’ll be taken seriously when they come forward.

That's why the SEC says it is already seeing a significant increase in quality tips. “This information will typically be provided by someone who's close to the center, close to the heartland of the misconduct,” said SEC enforcement director Robert Khuzami.

http://www.cnbc.com/id/41494697

How was the threeyear meltdown in Ouimets office kept secret

FAIR Whistleblower — Tue, 01 Feb 2011 14:49:25 -0800

The collapse of Canada’s whistleblower protection system was not caused by just one individual: it resulted from three systemic failures: 1) a failure of the appointments process, in selecting someone who was unsuitable; 2) a failure of the legislative process, in passing deeply-flawed legislation; and 3) a spectacular failure of the oversight process.

How was this situation allowed to continue unchecked for more than three years?

Headed by a new commissioner who reports directly to Parliament, the office was supposedly the cutting edge of the Federal Accountability Act, empowering 400,000 employees to safely expose wrongdoing. People would be watching closely: many whistleblowers hoped that finally someone could halt the misconduct they were witnessing and rescue them from reprisals by corrupt bosses.

But there were signs of trouble from the start. When commissioner Christiane Ouimet took up her position two senior staff left within six weeks—Pierre Martel, executive director and former acting commissioner, and Normand Desjardins, head of investigations. Desjardins took a costly early retirement. There followed a mass exodus: 18 out of 22 staff left in the space of a year. One observed that “there were people with six-figure salaries leaving with no job to go to.” The investigative team was gutted and more lawyers hired as the commissioner pursued her so-called ‘prevention’ strategy.

The causes of this turmoil would become very clear later, when the auditor general found that Ouimet was an abusive manager who yelled, swore, berated and intimidated staff; was reluctant to conduct investigations or to find wrongdoing and failed to carry out her mandate.

It’s unclear whether any of those leaving submitted grievances regarding Ouimet’s actions. This would seem a dangerous step since grievances went directly to Ouimet, the only person authorized to accept them. Most leavers were in mid-career: their livelihoods and their pensions depended upon continued employment in the public service, and grieving might get them blacklisted. Ironically, the only agency with a mandate to help people in such situations was the PSIC itself.

Seventeen months after Ouimet’s arrival Desjardins, appalled by what he was hearing from former colleagues, submitted a formal disclosure of wrongdoing to the Auditor General’s Office. Being retired, unlike the others he felt he could do so safely.

Incredibly, Ouimet would hang onto her job for almost another two years, with little change in her approach. She continued to intimidate staff and to pursue her ‘prevention’ strategy, thus ensuring that dozens of whistleblowers’ cases were closed without proper examination, that few investigations were launched, and that these were inadequately resourced. She even launched an extraordinary series of reprisals against a former employee that she suspected (incorrectly) of complaining against her. And right to the bitter end she maintained her perfect score in uncovering government misconduct: zero cases of wrongdoing and zero cases of reprisals.

What did change in this office was the Auditor General’s investigation, which became a pitched battle with staff caught in the crossfire. Ouimet had legal representation (paid by the taxpayer) and demanded what lawyers call ‘procedural fairness’. This translated into measures such as stenographers recording all interviews of witnesses and the transcripts being provided to Ouimet. Fully two and a half months elapsed after the initial evidence was provided to Ouimet before she could be interviewed for the first time—and then a three-month delay before her second interview. Two years elapsed between the complaint that launched the investigation and the final report.

In October CBC 2010 investigative journalist Brigitte Bureau broadcast a report that included FAIR’s concerns about PSIC’s dismal three-year track record, and an interview with Ouimet defending her record. This prompted some former PSIC employees to approach Bureau regarding the AG’s investigation. Once that story broke it was all over for Ouimet: her resignation was announced within hours. The press release said that she had retired two days previously: less than halfway through her seven-year term.

The code of silence

How could this situation remain hidden from sight for so long when so many knew, directly and indirectly, what was going on? The AG interviewed 34 people, including former employees, who all knew first-hand. Dozens of employees who were leaving PSIC undoubtedly told their friends and colleagues in the departments where they were seeking jobs. The Justice Department knew since it had to authorize payment for Ouimet’s legal representation, decide its strategy and assign lawyers. The Treasury Board certainly knew about the startling turnover rates. As the agency responsible for employment fairness, the PCO should have known.

Yet for 20 months the iron code of silence imposed on public servants held firm. Apparently not a single reporter, not a single whistleblower working with PSIC staff, not even organizations like FAIR that monitor PSIC knew that Ouimet was under investigation.

The result of this disciplined and respectful silence was that a wrongdoer at the highest level of government was accorded scrupulous consideration and due process while honest lower-level employees (her staff and countless whistleblowers) suffered for months or years and were denied redress.

This may be called procedural fairness, but it’s certainly not justice.

Lost in the fog of oversight

No agency with such an important mandate should be allowed to produce zero results year after year without coming under close scrutiny

PSIC’s plans were vague to the point of obscurity—but the money was handed out anyway. This meant that subsequent efforts to examine PSIC’s performance would be handicapped, since no-one knew what the commissioner was supposed to accomplish. In fact she had not committed to accomplish anything very specific.

When Ouimet’s annual reports to Parliament began to appear, these were as uninformative as her plans: one or two pages of meaningful data buried in up to 40 pages of slogans, unverifiable claims and vacuous prose. She even blamed her complete lack of results on public servants not coming forward and urged them “have the courage of your convictions”. Yet these reports—and the bogus prevention strategy, and the lack of results—were all accepted with virtually no challenge by MPs.

When Ouimet appeared before committee, most members appeared to have little idea what to ask her. The few probing questions put to her were met with evasive or misleading answers. It’s worth noting that Canada’s two main whistleblower organizations (FAIR and Canadians for Accountability) had both publicly criticized Ouimet’s track record and even called for her replacement. Both had been contacted by whistleblowers whose credible and well-documented cases had been ignored by PSIC, and both had expressed their concerns to at least some committee members. But no House or Senate committee called them to testify—or any other witnesses who might have been able to shed light on what was going on.

By ignoring civil society, the committees shut out a valuable constituency that could have helped them do their job properly, and in doing so they weakened the democratic process. FAIR didn’t know the full scope of the problems, but by the second year we certainly knew more than enough to help parliamentarians lift the lid off this can of worms if they had chosen to ask.

In 2009 the House Ethics Committee called Ouimet to testify two days before her annual report was tabled in Parliament. Without a report to study the committee members has no basis for questioning her: they did not even know that PSIC had produced zero results for the second year running.

PSIC’s third annual report, again showing zero results, was tabled three months late, in October 2010—but Ouimet was gone before any committee called her to testify.

Let sleeping dogs lie

Many people have speculated that Ouimet was ordered or encouraged by the government to block whistleblowers. I suspect that she was just following her instincts as a career bureaucrat trained to protect the hierarchy.

But her actions were immensely convenient to those in power. Senior officials might fear that this new agency, functioning properly, would churn out the equivalent of another sponsorship scandal every few months and expose all kinds of distasteful or even illegal corruption. For senior bureaucrats and the government of the day, this fear would be a nightmare—especially if they believed that such misconduct is commonplace.

So leaving Ouimet in place, even as the investigation dragged on toward its inevitable conclusion, would have been much preferable to getting rid of her, with all of the troubling questions that her departure would raise. Since her resignation would itself be a scandal of some sort, let it be delayed as long as possible—that’s standard practice.

It’s hard to believe that Ouimet would have survived for so long if she had been a thorn in the government’s side rather than a convenient bulwark against scandal. It’s true that only Parliament had the power to remove her, but she could remove herself at any time—as she ultimately did, and Ouimet seemed unlikely to ignore suggestions coming from any Prime Minister. Regardless of the theoretical constraints of official procedure, she could have been sent packing in a heartbeat, especially with the damning evidence against her that was being assembled. But she was not.

Nearly all whistleblower cases that we see follow a pattern: 1) egregious misconduct that threatens the public interest, by someone in a position of power and trust; 2) failure of the official channels to detect, acknowledge or address the problem in spite of repeated warnings and credible evidence; 3) vicious reprisals against anyone who objects to the wrongdoing or seems to represent a threat to the wrongdoers; 4) determined efforts to frustrate and delay any investigation, often generously funded and supported by the central agencies; 5) in the very rare situation that the wrongdoer ultimately has to go, a generous settlement to ease their pain—and probably the promise of protection from any further indignities; 6) no acknowledgement, apology or compensation of any kind for those harmed—especially the whistleblowers, those darned troublemakers who probably deserve whatever happened to them.

This scandal followed the usual pattern with few exceptions. Canada’s first government agency created to expose misconduct and protect whistleblowers instead became a role model for all that it was supposed to prevent: senior executive misconduct, reprisals against honest employees, and cover-up.

Consequences

This story is far from over since little has changed as a result. The systemic failures that allowed it to happen have not yet been addressed although these affect the functioning of our entire system of government. We see nothing unusual in Mme Ouimet’s actions. FAIR hears almost weekly from credible truthtellers who have witnessed similar or worse misconduct: serious ongoing frauds, criminal illegality and systematic abuse of power. There’s little that we (or anyone else) can do to help these people and there’s nowhere safe for them to go—until the law is rewritten, PSIC rebuilt, and a competent commissioner appointed. These corrective actions cannot happen too soon.

Canadians must demand better from our leaders. Let’s heed the lessons from this shameful episode and try to restore some integrity to our system of government. Our children and grandchildren will judge us by what kind of democracy we hand on to them.

David Hutton is the executive director or the Federal Accountability Initiative for Reform (FAIR)

The SEC Looking Out For Wall Street

Neil Weinberg — Mon, 31 Jan 2011 13:30:04 -0800

Shannon Walker - This is a rather ominous - or eye opening - synopsis about the state of affairs at the SEC - is there a conspiracy theory here?

http://blogs.forbes.com/neilweinberg/2011/01/31/the-sec-looking-out-for-wall-street/

Latest on Whistleblower Rules Nothing Good

Compliance Week — Fri, 28 Jan 2011 15:56:59 -0800

A more complicated environment is set to emerge as the Dodd-Frank Act encourages whistleblowers to do an end-run around their own compliance departments. Now, more than ever, it is imperative to encourage a culture of transparency and support for employees to come forward to their internal departments before heading to the SEC. Organizations need to provide the channels for the teams to come forward in a positive, non-retaliatory environment and allow the organization to address and repair areas of wrongdoing.

http://www.complianceweek.com/latest-on-whistleblower-rules-nothing-good/article/194811/

Ethics in Business A Forthright Response to BSchool Cheaters

Ken Makovsky - Forbes — Wed, 19 Jan 2011 12:42:31 -0800

Shannon Walker, President of Whistleblower Security writes:

This is a very interesting video regarding the lack of moral conviction in our society. The Professor in the video, calls upon all the students who cheated on a mid-term to come forward and admit their wrongdoing in order to be allowed to re-do the exam and potentially graduate. The Professor is committed to the integrity of the class and college. The students were also required to take a 4 hour ethics course as part of the process. Out of 540 students, 200 of them came forward and admitted their wrongdoing. A very interesting case study of morals and ethics.

http://blogs.forbes.com/kenmakovsky/2010/11/23/ethics-in-business-a-forthright-response-to-b-school-cheaters/

Names You Need to Know in 2011

Forbes — Mon, 17 Jan 2011 15:20:25 -0800

Shannon Walker, President of Whistleblower Security writes:

Forbes has created a blog that introduces 61 Names you need to know for 2011. These names include people, products and ideas that will have a significant impact on the future. One of the most interesting things I spotted was the creation of a new C-level position called Chief Listening Officer. This person monitors all social media generated about their organization and then decides which department needs the information. From product development to public relations, the CLO can provide profound and immediate feedback for an organization creating a vital real-time link to your customers, vendors and staff. http://www.forbes.com/need-to-know/need_to_know_lander.html

So, who is the most important name to know about next year? Forbes believes the most important name to know in 2011 is Julian Assange. <http://www.forbes.com/profile/julian-assange?partner=forbesblogs> , the mastermind behind WikiLeaks who has dumped hundreds of thousands of U.S. diplomatic cables for the world to see. Forbes staff writer Andy Greenberg journeyed from New York to Washington to Iceland and then to London for a clandestine meeting with Assange himself. It’s a fascinating story <http://blogs.forbes.com/andygreenberg/2010/11/29/wikileaks-julian-assange-wants-to-spill-your-corporate-secrets/> about a provocateur who says he’s now targeting banks, a former hacker named “Mudge” who wants to stop him and those in Iceland who want to create a safe harbor for leakers around the world.

Obama Signs Landmark WhistleBlower Protection Bill for Food Safety Act

National Whistleblowers Center & NWLDEF — Wed, 05 Jan 2011 08:21:51 -0800

Washington, D.C. January 4, 2010. Today, President Obama signed the FDA Food Safety Modernization Act (H.R. 2571), which contains landmark whistleblower protections for food safety employees.

Highlights of the Food Safety Whistleblower Provision:

Covers all employers "engaged in the manufacture, processing, packing, transportation, distribution, reception, holding or importation of food;"
Allows workers have their case heard before a jury in federal court;
Provides for reinstatement, back pay and compensatory damages.

Richard Renner, Legal Director of the National Whistleblowers Center, made the following statement:

The Food Safety Modernization Act (FSMA) will save American lives by protecting the millions of American workers who grow, process, store and deliver our food. Those workers now have modern whistleblower protections when they raise concerns about the safety of our food.

It is important for working people to know that all legal claims have time limits. The time limit under FMSA to file a written complaint with OSHA is 180 days. For raising concerns about toxic chemicals, though, the time limit is still 30 days. Whistleblowers usually get better results when they work with an attorney experienced in employment discrimination law.

The FMSA fills an important loophole left by the Consumer Product Safety Improvement Act (CPSIA) in 2008. CPSIA does not cover food or medical devices. FMSA is the first law to provide whistleblower protections for workers covered by regulations of the Food and Drug Administration (FDA). While tainted food kills about 5,000 Americans a year, medications may kill as many as 100,000 Americans every year. Yet Congress has not extended whistleblower coverage to workers who raise concerns about violations of the FDA's pharmaceutical regulations.

It is time to end the patchwork protection of whistleblowers and pass a law that protects all workers when they raise concerns about health, safety, fraud, illegality, and dangers to the environment.

Perceived Levels Of Corruption In The Public Sector

Transparency International — Tue, 04 Jan 2011 15:53:03 -0800

Shannon Walker - Whistleblower President & C.E.O. comments: A very interesting study based on the perceived levels of corruption in the public sector among 178 countries by the Transparency International Organization. This site has numerous blogs, case studies, articles and research. Transparency International has chapters worldwide with myriad projects underway to analyze and identify ways to deter corruption in both public and private sectors. For anyone with interests in anti-corruption best practices, this site is invaluable: http://www.transparency.org.

I also found their research and analysis on whistleblower protection very interesting – I have inserted below for your interest:

Transparency International is committed to enhancing whistleblower protection and promoting the implementation of related legislation and organisational best practices. The 2009 TI annual membership meeting adopted a resolution http://www.transparency.org on the protection of whistleblowers. In the context of a European Commission co-funded project, TI published the report “Alternative to silence" READ MORE... about whistleblowing mechanisms in 10 European countries and developed recommended draft principles for whistleblowing legislation <http://www.transparency.org/content/download/48525/775659/Principles_Whistleblowing_Legislation.pdf> . In November 2010, TI published the joint policy position "Whistleblowing: an effective tool in the fight against corruption" <http://www.transparency.org/publications>

The Whistleblower Protection Law

Child Support Law — Mon, 20 Dec 2010 10:50:19 -0800

It was not till 1986 when a law protecting whistleblowers is created. Congress added an anti-retaliation protection to your then current False Claims Act.

A whistleblower is really a individual who tells on something he believes is an illegal act. The workers are probably the most generally known whistleblower. They inform on their employers which they suspect is doing or committing an illegal act.

Beneath the Whistleblower Protection Law, the worker should not be discharged, denoted, suspended, threatened or harassed in any type that discriminates the phrases and conditions of his employment due to the fact of your authorized act performed by the worker.

The employee may possibly be of support in numerous ways achievable to the investigation, testimony and also the likes. Nevertheless you can find some constraints under the whistleblower protection law.

Reporting illegal acts which are only within the company is a floor for exemption. But still there may be public policies that could safeguard the worker from retaliation

If it turns out that an employer didn’t in fact break a law, the employee is still entitled to whistle blower protection from retaliation, if he fairly thought the employer committed an illegal act.

The whistleblower protection law does not cover employer retaliation for complaints about private loathe. Workplace politics is not to be used like a basis for submitting a complaint versus the employer and use the whistleblower protection for individual acquire.

In order for your employee to be protected from employer retaliation, he might the have a suspected desecration of any Federal Law. However the intended violation ought to have provisions the law violated will safeguard whistleblowers.

The Whistleblower Federal Law, in contrast to the False Claims Act, permits the whistleblower to file a lawsuit inside a federal court. The Federal Whistleblower Law doesn’t allow the whistleblower to go straight to your court.

The individuals involved are pursued administratively. These individuals involved could file a complaint or charge to retaliate with or without a lawyer to represent them. Even so if the situation is not resolved immediately, the administrative law judge may then preside over the only evidentiary hearing that might take location.

A whistleblower ought to not try to delay an investigation of your feasible authorized remedy. To preserve this ruling, the retaliation need to then be introduced towards the attention of an appropriate federal government official inside 30 days, else the complaint could not be pursued.

Most states have some sort of statutory or typical law “whistleblower” or anti-retaliation laws. Much like the federal whistleblower laws, not each lawyer will know about these laws, particularly laws outside their personal state.

These states and also the District of Columbia have recognized a public policy exception for the “employment at will doctrine”: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Some states have explicit statutory protections for whistleblowers. These consist of: California, Connecticut, Delaware, Florida, Hawaii, Louisiana, Maine, Michigan, Minnesota, Montana, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Rhode Island, Tennessee, and Washington.

You’ll find also state laws that offer unique protections just for their very own state or local government employees: Alaska, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia and Wisconsin.

http://www.enhr2008.com/the-whistleblower-protection-law

LACCD Begins Whistleblower Hotline

EGP News Report — Fri, 17 Dec 2010 10:04:30 -0800

Reports fraud in community college bond system

By EGP News Report

Incidents of fraud, waste or abuse in the Los Angeles Community College District’s $5.7 billion bond-funded building program can now be reported through LACCD’s new whistleblower hotline, it was announced on Tuesday.

The 24-hour hotline was established as part of the community college system’s ongoing efforts to tighten controls, and to ensure that taxpayer dollars are spent appropriately, according the District.

While LACCD’s Office of the Inspector General will oversee the whistleblower hotline, a third party service will actually run it in order to maintain confidentiality.

The whistleblower hotline will handle reports of suspected misconduct, conflicts of interest, fraud, and waste within the building program, said Christine Marez, the LACCD’s first Inspector General.

Marez said her office will plan, direct and conduct investigations and audits to ensure accountability and transparency in the Sustainable Building Program, and then report its finding to the LACCD Board of Trustees, the Chancellor and the District Citizens’ Oversight Committee.

“We hope that our confidential whistleblower hotline will encourage staff and others working with the program to report possible abuse related to the District’s building program,” Marez said. “The LACCD is committed to maintaining an open environment and managing its bond-funded program with integrity.”

“The establishment of a whistleblower hotline is yet another step the District has taken to strengthen our robust program management,” said Dr. Daniel J. LaVista, Chancellor, LACCD. “Our regular financial and performance auditors have given us high marks since the inception of our building program. Where they have made suggestions, we have responded quickly. The hotline was suggested as a result of a program evaluation and its implementation is another example of how we manage our $6 billion program to improve our campuses.”

The Los Angeles Community College District’s Sustainable Building Program is one of the nation’s largest green construction efforts, involving nine campuses.

A flyer announcing the whistleblower hotline was distributed last week to LACCD and Build LACCD employees, contractors, consultants and the public. Reports to the whistleblower program are accepted via phone, fax, email or U.S. mail.

For more information about the whistleblower hotline, visit http://www.laccd-oig.org/whistleblower.php

http://egpnews.com/?p=22391

Georgia to pay whistleblower $280000

Rhonda Cook-The Atlanta Journal-Constitution — Tue, 14 Dec 2010 13:39:14 -0800

Georgia has agreed to pay a woman $280,000 to settle a whistleblower lawsuit in which she claimed she was fired for reporting that two Ethics Commission lawyers were running a private law practice on state time.

According to her attorney, the lawsuit filed June 24, citing the Georgia Whistleblower Act, was settled to prevent the matter from going to trial.

Jennifer Ward said she was fired Nov. 18, 2009, in retaliation for reporting that State Ethics Commission attorneys Thomas Plank and Yasha Heidari had met with clients and attended court hearings when they were supposed to be working for the commission. She also said they used state computers to research private cases and had abused sick time. A subsequent investigation by the Office of the Inspector General also found that the men represented a lobbying group, Bright Ideas Consulting, which is regulated by the commission.

Ward said in her suit that she filed a report involving the two men just before Plank was named acting executive secretary of the commission. Ward was fired on Nov. 18, 2009, about a month after Plank moved into the temporary assignment, the complaint said.

Heidari resigned from the commission last April to devote more time to the private law firm Heidari & Plank, which was founded in March 2009. Plank resigned Aug. 16, a month after the inspector general's investigation found he and Heidari had pursued their private business while on state time.

Heidari could not be reached by telephone or e-mail on Monday, but last summer, just after the state investigation was released, he described the inspector general's report as "pathetic" and "50 pages of fluff." He said the inspector general's office had spent a year investigating and found little, but released the lengthy report in part to justify its existence to lawmakers.

Plank could not be reached for comment. There was no telephone listing or e-mail contact for him on the firm’s website.

The 1993 Georgia Whistleblower Act prohibits retaliation against any employee reporting certain wrongdoing.

http://www.ajc.com/news/georgia-to-pay-whistleblower-774826.html

One out of two execs stung by fraud survey

By John Morrissy, Financial Post — Thu, 09 Dec 2010 11:53:46 -0800

Sophistication, frequency a major concern for firms

Almost one out of two executives at large Canadian companies says employees have attempted to defraud their organization, according to a study by software provider SAS.

Customer fraud ranked equally high on the scale, with 47 per cent of executives, or only one percentage point fewer, saying their companies had been victimized by it.

"The number of occurrences of fraud, the sophistication of fraud, the dynamics of fraud are all becoming more and more prevalent," said Wes Gill, executive lead of enterprise risk management at SAS Canada.

"It can be anything from an individual who's very opportunistic in an insurance claim . . . to very sophisticated rings that are using this to finance terrorism." Gill said.

"In cases of organized crime it involves employees in collusion with external parties."

Other common forms of employee fraud involve cash transactions, which make the food and retail sectors targets.

Government and finance are equally high on the list of targets because of the size and complexity of their organizations, Gill said.

The problem is less of an issue for smaller-sized companies, the survey showed. Thirty-five per cent of senior executives at mid-sized companies said they, too, face employee fraud issues, while 30 per cent said they had been affected by customer fraud.

The SAS survey was carried out along with pollster Leger Marketing between March 3 and 26. It involved 1,022 senior-level decision makers and is considered accurate to within three percentage points, 19 times out of 20.

Lowest hit were the professional consulting, real estate and legal professions, 16 per cent of whose executives said they have faced customer fraud.

The survey said few employees who commit fraud get away with it. Only four per cent of executives at large companies said employees who committed fraud escaped being caught.

The survey defined large companies as those with more than 500 employees and mid-sized companies as those with 50 to 500 employees.

http://www.timescolonist.com/business/execs+stung+fraud+survey/3944341/story.html

Auditor general fights bid to end his control over whistleblower hotline

IRWIN BLOCK, The Gazette — Wed, 08 Dec 2010 11:21:54 -0800

City of Montreal auditor general Jacques Bergeron has reacted "with stupefaction" to the city's bid to remove a whistleblower hotline from his authority.

The ethics line was set up in December 2009 to enable city employees and suppliers to tip off the auditor general's office, on a confidential basis, about irregularities in the handling of city business.

That hotline's mandate includes the city's transit corporation and the municipal housing office, neither of which would be covered if responsibility over the ethics line is shifted to city comptroller Pierre Reid.

In an angry letter yesterday, Bergeron blasted the move, contending the result will be less supervision, as the comptroller does not enjoy the same "arm's length" relationship to the civic administration as the auditor general.

The comptroller cannot guarantee the same level of confidentially, Bergeron said, and Reid might find himself in a conflict of interest if he is called on to investigate the city's top management, of which is a major player.

Bergeron is urging city council to reject the proposal at its next meeting, Monday.

The move, which became public last week, was denounced by both opposition parties yesterday.

Opposition leader Louise Harel accused Mayor Gerald Tremblay's administration of waging a vendetta against Bergeron "in reprisal" for past criticism.

Harel argued that taking the ethics line away from the auditor general conflicts with practices in Toronto, Ottawa and other Canadian cities.

iblock@montrealgazette.com

http://www.montrealgazette.com/news/Auditor+general+fights+control+over+whistleblower+hotline/3937142/story.html

Editorial Whistleblowers need better protection

The Montreal Gazette — Wed, 08 Dec 2010 11:25:52 -0800

Montreal Gazette Supports the Transparency and Need for WhistleBlower Hotlines for Government Employees

Without whistleblowers, Canadians might not have found out that the Canadian military was handing over Afghan detainees to possible torture. And Quebecers might have remained in the dark for much longer than they did about corruption in the construction industry -at their considerable cost.

But if the public is grateful that previously hidden facts are dragged into the light of day, governments are not always so appreciative. Last year, Richard Colvin, an intelligence officer at the Canadian embassy in Washington, told a parliamentary committee that senior government officials knew Canadian Forces were handing Afghan detainees over to probable torture by Afghan authorities in 2006-2007. He immediately found himself under attack from Defence Minister Peter MacKay.

That was one of the big cases. Whistleblowers who try to warn their employers of less high-profile violations are even more vulnerable to reprisals. That's why whistleblower protection is so important. It is in the best interests of taxpayers that public employees be free to reveal wrongdoing. For that to happen, they need a designated authority with the power and tools to investigate and at the same time protect the whistleblower.

Yet in Montreal and Ottawa, whistleblower protection is under real pressure. In Ottawa, the "hear-no-evil" attitude of Canada's first public-sector integrity commissioner was so outrageous, federal auditor general Sheila Fraser has had to investigate. Fifty-eight whistleblowers complained to the commissioner that they suffered reprisals after alleging wrongdoing. Four complaints were investigated. The two that have been completed were both rejected: Hardly encouragement to future whistleblowers.

Here in Montreal, the city set up a hotline last year for city employees and suppliers to report any wrongdoing they witness. To date, 128 reports have been made.

Did that number come as a nasty surprise to the Tremblay administration? Is that why the city has decided to take the hotline away from the city's auditor general and give it to the city comptroller instead? It is a shameful and transparent ploy to take control of the complaints system. That hotline must remain under the auditor-general. Only his office is completely independent. He alone can launch an inquiry independently of civic authorities.

Taxpayers need to know that someone independent is in their corner. The federal government has to get serious about protecting whistleblowers. The city should leave the hotline with the auditor-general.

http://www.montrealgazette.com/news/Editorial+Whistleblowers+need+better+protection/3944045/story.html

A New Competitor to WikiLeak to Emerge

The Times of India — Tue, 30 Nov 2010 16:34:15 -0800

REYKJAVIK: A former WikiLeaks associate said on Tuesday he and a number of other ex-members are preparing to launch an alternative to the whistle-blower website, just days after its latest document dump rocked the world.

"We want to set up a system that is different from WikiLeaks," explained 25-year-old historian and student Herbert Snorrason, adding that the project was "built on similar ideas" to those behind the organisation that has released hundreds of thousands of classified US documents in recent months.

"We broke from WikiLeaks because a few ex-WikiLeaks members had been very unhappy with the way (Julian) Assange was conducting things," Snorrason told AFP, referring to WikiLeaks' enigmatic Australian founder.

"They realised that ideas they wanted to come across would never be received," he added.

Assange, who is wanted internationally for questioning about rape allegations in Sweden, has previously been criticised for "acting like an emperor" in running his organisation.

Nonetheless, Snorrason insisted the project was "not a personal attack on Julian Assange or WikiLeaks."

"It is a different type of project and we do not see it as competition, nor should it be considered to be a WikiLeaks competitor," he said.

The difference, according to Snorrason, was that while WikiLeaks gathers leaked documents and dumps them on its site, the new project - he would not provide a name - will be "a safe haven where people can share information anonymously."

"We will not be publishing information ourselves, but rather be the hub of where people can upload information without having to be associated with what they upload," he explained.

WikiLeaks spokesman in Iceland, Kristinn Hrafnsson, could not be immediately reached for comment.

Whistleblower Act To Be Implemented On December 15 Says Idris

� 2010 BERNAMA — Mon, 29 Nov 2010 14:02:05 -0800

KUALA LUMPUR, Nov 29 (Bernama) -- The Whistleblower Protection Act 2010, formulated to curb corruption, will be implemented on Dec 15, said Minister in the Prime Minister's Department Datuk Seri Idris Jala.

He said the Act would help prevent people from engaging in corrupt activities as somebody would blow the whistle on them.

Idris said an announcement on this would be made on Dec 6.

"Dec 6 will be quite a historic moment for Malaysia in its fight against corruption.

"And then, we will put down on the modalities of the act's implementation which will take off on Dec 15," he told Bernama here Monday night.

He said the Act, which was passed by Parliament in May, was developed according to the best practices of the same act in other countries such as the United Kingdom and United States.

"The experience in the US and Europe was that corruption began to decline (after the implementation of Whistleblower Act) because it is a big deterrent.

"What is important is that the public knows that the protection act is there. We also have a witness protection act too. Not only are whistleblowers protected so too witnesses.

According to Idris, under the Act, if anyone in the country finds he or she has evidence of someone who has committed a corrupt practice or act or fraudulant activity, the whistleblower can file a complaint against that individual.

"The whistleblower clearly will be protected in terms of confidentiality and the identity of the person will be kept completely intact by law," he said.

Asked whether the whistleblower would be rewarded, he said there had been a proposal to reward whistleblowers but had yet to be discussed.

"We are only beginning with protection. Most countries just do this and do not reward. But we are looking into the possibility of having a reward mechanism," he added.

When tabling Budget 2010 in Parliament in October last year, Prime Minister Datuk Seri Najib Tun Razak announced that a Whistleblower Protection Act would be formulated to encourage informers expose corrupt practices and other misconduct.

Najib said that the move would provide immunity to informers from civil or criminal charges. The formulation of the Whistleblower Act was among the measures taken in the implementation of the National Key Result Areas (NKRA) to eliminate corruption.

-- BERNAMA

http://www.bernama.com/bernama/v5/newsindex.php?id=546445

SEC Announces Proposed Rules on DoddFrank Whistleblower Program

Fredric D. Firestone, Obiamaka P. Madubuko and Kathryn C. Goyer — Mon, 15 Nov 2010 10:09:19 -0800

Rules recently proposed by the U.S. Securities and Exchange Commission define the scope and procedures of the whistleblower provisions under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

On November 3, 2010, the U.S. Securities and Exchange Commission (SEC) issued proposed rules regarding the whistleblower provisions under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The SEC's proposed Regulation 21F defines critical terms, outlines procedures and generally explains the scope of its new whistleblower program. The proposed rules also address the important issue of whether whistleblowers should report suspected violations to their internal compliance and legal departments before making such reports to the SEC and how such internal reporting will affect their ability to receive a financial award under the program.

The Dodd-Frank Act authorizes the SEC to pay financial rewards to whistleblowers for reporting violations of the federal securities laws. To receive an award, the whistleblower must voluntarily provide the SEC with original information that leads to a successful enforcement action that results in monetary sanctions exceeding $1 million. The Dodd-Frank whistleblower provisions have been criticized for encouraging employees to bypass internal compliance and legal departments, and instead report suspected violations directly to the government. This has led to concerns the new whistleblower program will undermine, rather than support, the critical role that compliance programs play in rooting out corporate fraud and wrongdoing in America's public companies. (See " New SEC Whistleblower Program and Added Disclosure Rules in Dodd-Frank Act: Will These New Regulations Help or Hinder FCPA Compliance Efforts?"). In addition, there are concerns that offering such large financial incentives may not lead to more reliable claims or better corporate compliance.

The proposed rules attempt to address some of these concerns by giving whistleblowers the option of reporting suspected violations internally to a company's legal, compliance, audit or other department before reporting the violation to the government. Provided the whistleblower submits the same information to the SEC within 90 days, the individual remains eligible to receive an award and the SEC "will consider that [the whistleblower] provided information as of the date of [the] original disclosure, report or submission to one of these other authorities or persons." Proposed Rule 21F-4(b)(7). In the Supplementary Information accompanying the proposed rules, the SEC also contemplates an increase in the amount of the award for whistleblowers who first utilize a company's internal reporting program. However, the SEC will not penalize whistleblowers for not filing an internal report based on a fear of retaliation or other legitimate reasons.

By allowing a 90-day waiting period, the SEC seeks to provide a company with "a reasonable period of time to investigate and respond to potential securities laws violations (or at least begin an investigation) prior to reporting them to the Commission or an appropriate regulator." Proposed Rule 21F, Supplementary Information, at 112. The SEC further realizes that this grace period may also result in cost savings by eliminating false or unreliable claims. These proposed rules attempt to encourage employees to use their internal resources first (where practicable) and acknowledge the importance of "fostering robust corporate compliance programs." Id. at 34.

A related concern was whether whistleblower status should be conferred on individuals with a duty of loyalty to the company or who have access otherwise to privileged or confidential information. In response, the SEC's proposed rules would disallow whistleblower claims from outside counsel, independent auditors and internal legal, audit and compliance personnel. For internal legal, audit and compliance personnel, however, information submitted to the SEC may still qualify for a whistleblower claim if the entity did not disclose the information to the SEC "within a reasonable time or proceeded in bad faith." Proposed Rule 21F-4(b)(4)(iv). The SEC does not define "reasonable time" to mean any one fixed period, but instead indicates that it will be "a flexible concept that will depend on all of the facts and circumstances of the particular case." Proposed Rule 21F, Supplementary Information, at 26. The SEC has also invited comments on whether these proposed exclusions should be extended to other types of privileged communications or other professionals with access to confidential information.

As with many other provisions of the Dodd-Frank Act, the SEC's rule-making process is moving very quickly. Comments on the SEC's proposed Regulation 21F are due to the commission by December 17, 2010. Any company that deals with regulatory compliance issues involving securities laws should immediately consider whether and how to weigh in on these proposed rules.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Specific Questions relating to this article should be addressed directly to the author.

AICPA National Conference on Current SEC and PCAOB Developments

AICPA — Fri, 12 Nov 2010 10:07:55 -0800

AICPA National Conference on Current SEC and PCAOB Developments

Date: Dec 06 - Dec 08, 2010

Location: Marriott Wardman Park Hotel, Washington, DC

Pre-Conference: December 05

http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/InternationalAccounting/PRDOVR~PC-SEC/PC-SEC.jsp

Obtain the latest insights and information on SEC standards for auditing, reporting and governance directly from the regulators at the AICPA National Conference on Current SEC and PCAOB Developments.

Get critical updates from multiple training sessions and presentations by top leaders at the SEC, PCAOB, IASB, FASB, AICPA and members of the profession. You will hear about new regulatory issues, and how they will affect audits, reporting and governance for public companies. Day 3 of the conference features more practical sessions, helping you understand how these regulations and updates apply. You’ll also benefit at the conference from numerous networking opportunities.

With the recent passage of the Dodd Frank Wall Street Reform and Consumer Protection Act, the SEC is charged with the task of addressing many rules and proposals, in addition to conducting several studies. Hear from SEC regulators on how this bill will impact their decision-making and what’s new that you need to worry about.

The new acting Chair of FASB, and the outgoing chair of IASB will address IFRS convergence and how the change in personnel effects the roadmap.

Notable speakers include:


Mary Schapiro SEC Chair	Sir David Tweedie IASB Chair	Leslie Seidman Acting Chair, FASB

Topics addressed include:

SEC Activities Related to Financial Regulatory Reform
SEC Chair keynote address
The latest from the new Acting Chair of FASB
Legislative Update
In-depth sessions discussing revenue recognition, leasing, financial instruments, and more
SEC rulemaking activities
FASB and IASB standard setting agenda updates
Applying new accounting standards
Daily Q&A Sessions

Please note: in addition to this live event in Washington, DC, this program will also be available via simulcast in 4 locations: Dallas, TX, San Francisco, CA, Chicago, IL and New York, NY. Please check back for more information about these locations.

Who Should Attend: Senior professionals and CPAs from public company audit firms and SEC registered companies.

For Agenda updates, please check the Website or log on to our AICPA Conferences Twitter account (http://twitter.com/AICPAconfs) and follow hashtag #aicpasec or join this conference’s LinkedIn group at http://linkd.in/AICPASEC.

City of Memphis may set up whistleblower hotline to report corruption

Amos Maki — Tue, 09 Nov 2010 09:32:52 -0800

The Wharton administration is considering establishing a hotline for whistleblowers to report corruption and fraud in city government, officials told a City Council committee this morning.

“Based on my experience in the private sector, we need to go a few steps further to protect anonymity and prevent retaliation,” Human Resources director Quintin Robinson told the council’s Personnel, Intergovernmental Relations and Annexation committee.

The city has fraud and whistleblower policies, which prevent an employee from being fired for acting as a whistle blower. However, the current laws don’t do enough to protect workers from retaliation, Robinson and others said.

“You could be suspended or demoted,” said police officer J.D. Sewell, head of the city’s police union.

Former chief administrative officer Rick Mason suggested the city create an anonymous whistleblower system for city employees in the wake of several high-profile scandals in the General Services Division.

An FBI probe into a General Services contract is under way, and at least 11 officials have quit or been terminated.

In a report sent to mayor A C Wharton, Masson said previous members of management in General Services intimidated employees who may have been in a position to shed light on inept and possibly corrupt practices.

Masson said several people among 22 mid- and upper-level General Services employees who were interviewed "shared past practices of intimidation" by senior managers.

http://www.commercialappeal.com/news/2010/nov/09/city-memphis-may-set-whistleblower-hotline-report/

Christus Settlement Part of Larger $629 Million Qui Tam Whistleblower Case

By Gordon Gibb — Wed, 03 Nov 2010 11:25:25 -0700

Los Angeles, CA: A Qui Tam Whistleblower case that put the spotlight on a hospital chain based in Texas has been resolved after Christus Health Systems agreed to pay almost a million dollars to the federal government in an effort to settle whistleblower allegations of Medicare fraud.

According to the October 9th issue of Right Vision News, Mark Razin was at one time an employee of Healthcare Financial Advisors Inc. (HFA), an entity that worked in concert with hospitals on cost reports with the view to maximizing reimbursement by Medicare. The company is also reported to have encouraged hospitals to reopen the cost reports from previous years in an effort to make "adjustments" aimed at resubmitting to secure an increase in Medicare reimbursements. Many of those "adjustments" were found to be fraudulent.

The Christus settlement resolves allegedly fraudulent Medicare billings that date back as far as 1988 and extend to 2001. According to the qui tam lawsuit, a collection of Christus hospitals billed Medicare for advertising and marketing costs, as well as certain administrative costs for which Christus should not have billed Medicare. Christus was also found to have failed to disclose errors made by a fiscal intermediary charged with the task of reviewing cost reports for Medicare. The result, government whistleblowers found, was a series of overpayments to the hospitals.

Christus, which is based in Houston, operates more than 40 hospitals and related facilities in eight states of the Union. HFA was acquired by Certus in 1998—the same year that qui tam government whistleblower Razin filed his lawsuit in federal district court in Los Angeles against a number of former clients associated with HFA/Certus. Christus was among them. The qui tam lawsuit remained under seal for more than a decade before a judge finally unsealed the document this fall.

Government whistleblowers such as Razin are protected against reprisal under the federal whistleblower act, and provide valuable service by way of exposing fraudulent activity and wrongdoing against the government and other federal entities. For their efforts, federal whistleblowers receive a share of any proceeds. The settlement involving Christus came in at $970,987—but is merely a drop in the bucket when compared to the $62.9 million in funds recovered in total by the feds resulting from Razin's actions. http://www.lawyersandsettlements.com/articles/15313/qui-tam-whistleblower-lawsuit-government-20.html

Big Firms Seek Shield Against WhistleBlowers

By KAJA WHITEHOUSE — Mon, 01 Nov 2010 09:59:57 -0700

Big companies are begging the Securities and Exchange Commission to give them first crack at whistleblowers before the tipsters be permitted to tattle to the federal watchdog.

In a move critics say runs afoul of whistleblower protections established under the Sarbanes-Oxley Act of 2002, corporations and their legal advisers are asking the SEC to force employees with suspicions of wrongdoing to go through internal channels before taking their complaints to a higher authority.

Last week, law firm Arent Fox, which represents Wal-Mart and drugmakers Genzyme and Elan, asked the SEC to require employees to go through internal whistleblower procedures "as a required prerequisite" to making a claim with the SEC. The law firm also asked the SEC to refuse to accept tips from people with a "fiduciary responsibility" to the company, such as top officers and directors.

The requests come in the wake of the SEC's call for comments to help establish a new whistleblower program mandated by Congress. The new program will provide much larger financial rewards to people who come forward with tips on corporate misdeeds, and allow them to remain anonymous if they have a lawyer.

Stephen Kohn, executive director with National Whistleblowers Center, called it "obstruction of justice" for companies to discourage employees from taking their complaints to federal authorities, citing laws that call for protection of employees who take information to a "federal regulatory or law enforcement agency."

SEC officials last week also held a private meeting with a slew of large pharmaceutical and financial companies on the upcoming whistleblower program. The group included Johnson & Johnson, Tyco International, Pfizer, JPMorgan Chase and Citigroup. Details of the meeting are unknown.

Their lawyer, Barry Goldsmith of Gibson Dunn, didn't return a request for comment.

http://www.nypost.com/p/news/business/big_firms_seek_shield_against_whistleblowers_ZWnUQpujJlHt1c6F1td0mJ

Never used whistleblower panel has an $81million budget

Amy Minsky, Postmedia News — Tue, 26 Oct 2010 14:38:37 -0700

Tribunal hasn't heard a single case since it was set up in 2007

A little-known, never-used government tribunal will spend as much as $8.1 million of taxpayers' money by the end of 2012-13, federal documents show.

The Public Servants Disclosure Protection Tribunal was set up in 2007 to protect public servants from retaliation after reporting immoral or illegal activities in government. Since then, it hasn't heard a single case.

The fact that the tribunal hasn't been used comes to light following the sudden departure on Oct. 18 of Christiane Ouimet, the first federal public sector integrity commissioner, while her office was being investigated by Auditor-general Sheila Fraser.

The tribunal would take cases referred by Ouimet's office. In three years, the commissioner didn't find any wrongdoing in any of the 170 complaints her office received.

Fifty-eight whistleblowers complained to the commissioner's office since 2007-2008, saying they were mistreated or violated after filing a report. The commissioner launched only four investigations as a consequence of those complaints, and only two have been completed.

Because neither had findings of reprisal, the tribunal has never been referred a case.

"It's clearly a waste of money," said David Hutton, executive director with the Federal Accountability Initiative for Reform, a registered charity advocating for whistleblower protection. "This whole expensive system has achieved absolutely nothing. In fact, it has made things worse."

Hutton said the tribunal gives whistleblowers an "illusion of protection" when the reality is that civil servants are left without recourse after filing a complaint to the integrity commissioner about irresponsible, immoral or illegal government activities.

The tribunal spent $836,000 in 2008-09, according to its performance report from that year, and has tabled spending estimates of $1.83 million for each successive year until 2012-13.

Lisanne Lacroix, the registrar and deputy head of the tribunal's office, said she is surprised they haven't received a single case in three years. But, as she pointed out, the lack of work has meant less money actually spent.

"I have $1.828 million in my budget," she said. "But since we haven't had any cases, I haven't spent it."

Money not used is returned to the government each year.

While waiting for a case, the office has established rules and guidelines, trained staff and become familiar with legislation, Lacroix said.

She said the office employs four full-time and two part-time employees.

But if and when the tribunal eventually hears a case, there is virtually no chance the public servant will win, Hutton argues.

An equivalent "kangaroo court" in the United States heard 2,000 complaints, and only four cases prevailed, Hutton said. "It's virtually impossible for an employee to prove that an employer took reprisal against them. It's very hard to look at this system and come to any conclusion other than this is for show."

Prime Minister Stephen Harper created an independent Public Sector Integrity Commissioner to protect whistleblowers in 2007, with the intention of making civil servants feel protected when calling government on a misdoing.

Some opposition MPs say it's the legislation isn't working.

"I think you can safely say the Conservatives broken promises are expensive," NDP MP Pat Martin said. "It's a smoke-and-mirror illusion of whistleblower protection, when really, the legislation is inadequate to really protect them in any case."

http://www.vancouversun.com/news/Never+used+whistleblower+panel+million+budget/3726214/story.html

BC Needs Effective Legislation to Protect WhistleBlowers

Mon, 25 Oct 2010 13:21:56 -0700

With the recent debacle involving the Basi-Virk case, there is no time like the present for the provincial government to create a whistleblower program that mandates accountability and transparency for all parties.

http://fairwhistleblower.ca/content/bc-needs-effective-legislation-protect-whistleblowers

The Auditor General investigates high number of staff resignations

Public Sector Integrity Commission - Brigitte Bureau — Thu, 21 Oct 2010 14:51:27 -0700

The federal agency charged with investigating allegations of wrongdoings within the public service is itself the target of an investigation by the Auditor General.

Radio-Canada has obtained a copy of the complaint filed by an ex-employee of the Public Sector Integrity Commission. This letter mentions the fact that 18 of the 22 Commission staff had resigned in less than a year.

One of them, Normand Desjardins, took an early retirement, in 2008. M. Desjardins, who was in charge of all investigations at the Public Sector Integrity Commission, just couldn't cope working with Commissioner Christiane Ouimet. "Let's just say that my professional relation with the Commissioner deteriorated dramatically and quickly", he pointed out.

He says the situation even made him sick: "Her tone, the way she would address me... She was not asking for advices. She wouldn't have any open discussions. She talked, we listened".

While on sick leave, he decided to opt for an early retirement, even if it meant loosing some of his pension income. "I did not envisioned leaving in such a way after a career of 36 years. But, all of this was damaging my self-esteem", he added.

When Mr. Desjardins decided to filed a complaint with the Auditor General, he became aware of the fact that 18 of his former 22 colleagues had resigned, just like him, in less than a year.

Many of these ex-employees, who prefer to remain anonymous because they still work within the federal public service, have confirmed the difficult working climate that prevailed at the Commission. Some of them also question the role the Commissioner gave herself, as soon as she was appointed. She authorizes few official investigations, preferring a more preventive approach.

During a three year period, on a total of 170 complaints by public servants, the Commission was unable to identify even one wrongdoing, not one single case of abuse within the public service.

Another ex-employee of the Commission is now teaching at Ottawa University. According to Pierre Martel, the role of the Commissioner should be to investigate. "It is a bit surprising that very few official investigations were ever undertaken and that even when investigations were done, they couldn't find any wrongdoing", he said.

Mr. Martel was the interim Commissioner before Ms. Ouimet's appointment. Soon after she took over, he too resigned from the public service. "The relations between the Commissioner and all the staff were pretty strenuous", he concluded.

The Integrity Commissioner refused to grant us an interview. She simply said that she was fully cooperating with the Auditor General investigation.

A News Report by Brigitte Bureau, Société Radio-Canada.

http://fairwhistleblower.ca/content/auditor-general-investigates-high-number-staff-resignations

Bill C25 Disclosure Protection Whistleblower Legislation

Shannon Walker — Tue, 19 Oct 2010 13:44:42 -0700

Governmental Accountability

Has anything changed? In 2004, Bill C-25 was introduced to put whistleblower processes in place. Today, six years later, nothing much has changed. There is the Office of Public Integrity - who with a budget of $6.5 million hasn't proven to be very effective. The BC Provincial government doesn't have a true whistleblower program and perhaps that is because they really do not want to.

The Basi-Virk trial ended yesterday with a whimper. Guilty pleas, unanswered questions and the BC public still has no idea what went on with the sale of BC Rail. At some point, there has to be a higher level of accountability for politicians and bureaucrats alike. The threat of election time is not enough. Government must provide thorough and effective protocols for individuals to come forward. The amount of money squandered for this court case, the seven years that people devoted their careers trying the case, only to have a guilty plea with no explanation or answers to the allegations of organized crime at the highest level of government, seems illegitimate, wrong and entirely reckless with the trust and bank accounts of BC residents.

http://www.cbc.ca/news/background/whistleblower/

Whistleblowing Will WhistleBlowing Be Millions Well Spent

Michael F. Perlis and Wrenn E. Chais — Mon, 18 Oct 2010 14:11:07 -0700

Dodd-Frank is about to make whistle-blowers filthy rich. That's a mistake.

Sometimes the best intentions make the worst laws. This may be the case with the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act. A provision of the Act that rewards whistle-blowers who provide the Securities and Exchange Commission ("SEC") with information relating to securities laws violations may present more headaches than viable information for regulators investigating violations.

Signed into law on July 21, 2010, the Act is a comprehensive overhaul of the financial regulatory system. It contains a whistle-blower provision that rewards individuals who provide the SEC with "original information" relating to violations of securities laws. The provision requires that whistle-blowers receive cash payments of between 10% and 30% of the fines collected for monetary sanctions exceeding $1 million and provides expanded protection against employer retaliation.

Enacted to prevent a recurrence of Madoff Ponzi scheme embarrassment suffered by the SEC for ignoring repeated warnings by whistle-blower Harry Markopolos (who first suggested the whistle-blower bounty program be extended to all securities violations during his 2009 congressional testimony), this provision would allow qualified whistle-blowers to potentially reap hundreds of millions of dollars in compensation.

This financial windfall is especially relevant for the Foreign Corrupt Practices Act. The FCPA prohibits persons and corporations from bribing foreign officials to retain or obtain business. Over the past few years, these investigations and prosecutions have escalated, resulting in massive settlements. To put the potential FCPA whistle-blower bounty into context, in the first six months of this year alone, the SEC and the Department of Justice ("DOJ") announced FCPA penalties in excess of $1 billion--BAE Systems Plc. ( BAESF.PK - news - people ) ($400 M), ENI/Snamprogetti ($365M), Technip ($338M), Daimler AG ($185M), General Electric ( GE - news - people ) ($23.5 M), Innospec ( IOSP - news - people ) ($11.2M) and Alliance One Int'l ($10M).

It's estimated the DOJ has more than 140 open FCPA investigations, including investigations announced by Hewlett-Packard ( HPQ - news - people ) and Avon. The SEC created a specialized unit in San Francisco to handle these cases. A number of issuers, including Tidewater ( TDW - news - people ), Alcatel-Lucent ( ALU - news - people ), Palapina and Pride International ( PDE - news - people ), have collectively reserved hundreds of millions of dollars of FCPA penalties. If a whistle-blower had been eligible for a 30% reward in the 2008 Siemens AG ( SI - news - people ) settlement, which paid $1.6 billion in monetary sanctions to the DOJ, SEC and German government, the whistle-blower would have collected $496 million. Numbers like that will garner significant attention from employees, agents, foreign officials and contingency fee attorneys.

Given the amount of money at stake, one would expect that the parameters of the program would be well-defined. But this is not the case. For example, the amount awarded will be at the discretion of the SEC. Penalties, disgorgement and interest paid count toward the $1 million threshold. Factors to be considered in determining the amount of the whistle-blower reward include the significance of the information provided, the degree of assistance provided by the whistle-blower, and the programmatic interest of the SEC in deterring violations of the securities laws by making awards to whistle-blowers.

If the amount awarded is less than 10% or more than 30% of the monetary sanction, a whistle-blower may appeal the decision to the "appropriate court of appeals of the United States." Given potential award amounts, it is highly likely that the SEC's determination to decline to make an award will lead to an appeal. It should be troubling to the SEC and other related government agencies, that they would be required to litigate a behind-the-scenes look at how they prosecute cases, the value of particular evidence and whether and how the information presented by the whistle-blower was shared with other agencies. These appeals have the potential to be a tremendous distraction and resource drain for the SEC.

Under the Act, the whistle-blower could be a foreign official or foreign agent. If the SEC were required to make a 20 million whistle-blower payment to a foreign official, what would the political ramifications be? Foreign officials may find whistle-blower rewards a source of revenue worthy of reporting on colleagues or agents.

Taxpayers may also question why the government is so willing to take such vast sums of money out of U.S. enforcement agency coffers and reward it to whistle-blowers, particularly where there appears to be no shortage of current FCPA prosecutions and investigations.

For the first time, individuals who come across evidence of suspected bribery of foreign officials will have a significant financial incentive to report it to government regulators. The whistle-blower incentive has the potential to drastically impact corporate internal investigations and voluntary disclosure decisions. Employees who once approached company auditors and compliance personnel with their suspicions may decide instead to go straight to the SEC.

Management and corporate counsel who uncover evidence of potential corrupt foreign payments will have to weigh the new incentives for employees when deciding how to conduct internal investigations and whether to voluntarily disclose the results of their investigations. An employee who learns through an internal interview that the employer is investigating potential FCPA violations may head straight to the SEC, impeding and disrupting the company's attempt to ferret out improper payments. With the strengthened retaliation protections, employees who suspect a pink slip might seek whistle-blower status as a job security measure. On the enforcement side, the SEC may be diverted from warranted investigations as it attempts to manage an onslaught of allegations from disgruntled employees and insiders with little or no relevant information hoping to reap a huge windfall.

Given the enormous bounties whistle-blowers stand to collect, the ramifications of this provision will likely spawn a flood of allegations and an unforeseen quagmire of litigation with a cottage industry to support it. Once again, Congress has passed legislation without any thoughtful analysis of its consequences.

Michael F. Perlis is a partner with Stroock & Stroock & Lavan in Los Angeles and a former assistant director of the Division Enforcement of the Securities and Exchange Commission. He assisted in the original drafting of the FCPA. Wrenn E. Chais is Of Counsel at Stroock & Stroock & Lavan in Los Angeles, where she practices securities-related litigation.

http://www.forbes.com/2010/09/15/whistle-blowers-sec-opinions-columnists-perlis-chais.html

An alarming expose of governmental mismanagement

CBC — Fri, 15 Oct 2010 12:55:47 -0700

CBC The Current: Veterans Affairs Leak

CBC Radio, The Current – October 14, 2010

Last week Canada's Privacy Commissioner reported that officials at Veterans Affairs had passed around thousands of pages of confidential medical records and financial statements.

They were seen by mid-level managers all the way up to the minister. They belonged to Sean Bruyea, a Canadian veteran and a vocal critic of the department. And he told us on The Current that he believes the goal was to use the information to discredit him and he alleges much worse.

The privacy commissioner found the actions of public officials alarming. Sean Bruyea found them unconscionable. But it is their inaction that troubles Amir Attaran.

He's a law professor at the University of Ottawa. And he's especially concerned about the fact that this behaviour went on for years, reportedly involving hundreds of bureaucrats and that not a word of it was leaked to the public - by anyone. Amir Attaran was in Ottawa. And Ralph Heintzman is a Professor in the Graduate School of Public and International Affairs at the University of Ottawa and Senior Fellow at Massey College at the University of Toronto.

http://fairwhistleblower.ca/content/cbc-current-veterans-affairs-leak

AARP Joins Whistleblower Suit Against Device Makers

Pharmalot — Wed, 13 Oct 2010 15:54:31 -0700

This is a significant event as the AARP is taking the first step in making a case against the prevalent abuse of the healthcare system by manufacturers. Pharmaceutical companies have been prosecuted over the past few years after blatant abuse during the early 2000’s. According to a recent story in the New York Times, Novartis joins a growing list of pharmaceutical companies that have settled government investigations into health care fraud in the last few years, including Pfizer, which paid $2.3 billion; Eli Lilly, $1.4 billion; Allergan, $600 million; AstraZeneca, $520 million; Bristol-Myers Squibb, $515 million; and Forest Laboratories, $313 million. Pfizer, Lilly, Allergan and Forest pleaded guilty to crimes in the cases.

Many drug makers have been critical of FDA’s increased scrutiny of drug safety and argue that it has negatively impacted the regulatory approval rates of new experimental medicines. While this may create issues for pharmaceutical executives, the FDA was created to insure that all approved drugs are safe and effective and the risk to people who use them is minimal. In other words, the agency is finally doing its job—something it was prevented from doing for the past eight years! And a lot of these cases would not have come to the FDA’s attention without the assistance of the whistleblowers who came forward to alert the FDA of wrongdoing.

http://seekingalpha.com/article/229828-aarp-joins-whistleblower-suit-against-device-makers

Ed Silverman is the founding editor of Pharmalot and a prize-winning journalist who has covered the pharmaceutical industry for the past 15 years for The Star-Ledger of New Jersey, The Pink Sheet and, currently, as an editor-at-large for Med Ad News and R&D Directions.

Whistleblower watchdog strikes out for third time FAIR calls for change

David Hutton, Executive Director — Tue, 12 Oct 2010 10:12:53 -0700

OTTAWA – The Public Sector Integrity Commissioner, the agent of Parliament charged with protecting government whistleblowers, published her third annual report this week.

For the third consecutive year the Commissioner’s office, with its annual budget of $6.5 million and staff of more than 20, has uncovered not a single case of wrongdoing and has protected not a single whistleblower.

David Hutton, Executive Director of FAIR, stated:

“This report serves up a feast of platitudes about the great work being done by the Commissioner’s office and how wonderful the Canadian system is – the envy of other countries. Yet whistleblowing experts consider our law a disaster and the numbers confirm this.”

“It’s time to abandon the hype and face reality – the Commissioner’s ship is sinking. With no findings of wrongdoing or reprisal, this office has little credibility left. It has protected no-one and provides absolutely no deterrent to wrongdoers.”

These results highlight the failure of the government’s much-touted whistleblower law, which Minister Baird described as the “Mount Everest” of whistleblower protection when it was introduced by the Conservatives after their 2006 election victory – won on a campaign platform of transparency and accountability.

Since the law was enacted FAIR has seen no change in the experience of whistleblowers, whose lives are typically devastated by reprisals, and who quickly discover that the Integrity Commissioner’s office does nothing to protect them. Yet they have nowhere else to go.

Until honest employees can speak out without fear of reprisal, our bureaucracy will continue to spawn (and cover up) disasters that could be nipped in the bud: like the Tainted Blood scandal, the Sponsorship Scandal, Shawinigate, and the $1 billion Gun Registry budget overrun.

FAIR calls upon lawmakers to accelerate the required 5-year review in order to enact properly-designed legislation. They should also ensure that those who administer the law are focused on getting results – detection of wrongdoing and real protection for whistleblowers – rather than merely going through the motions.

For more information:
David Hutton, Executive Director
613-567-1511

http://fairwhistleblower.ca/content/whistleblower-watchdog-strikes-out-third-time-fair-calls-change

Come Blow Your Horn for the SEC

Peter J. Henning — Fri, 08 Oct 2010 09:43:10 -0700

Peter J. Henning follows issues involving securities law and white-collar crime for DealBook’s White Collar Watch.

The Dodd-Frank Act, which just became law, strengthens the authority of the Securities and Exchange Commission to regulate complex securities, like credit default swaps, and broadens oversight of hedge funds that control billions of dollars of assets. One provision of the law that is likely to give a significant push toward revealing more conventional types of securities fraud authorizes the S.E.C. to pay out financial rewards to whistle-blowers that could total millions of dollars.

Rewarding whistle-blowers is an important means for agencies like the Internal Revenue Service to generate information about continuing violations that might not come to light otherwise. The Dodd-Frank Act opens a new avenue for the S.E.C. to gather information for any violation of the federal securities laws, not just insider trading.

About White Collar Watch

Peter J. Henning, writing for DealBook’s White Collar Watch, is a commentator on white-collar crime and litigation. A former lawyer at the Securities and Exchange Commission’s enforcement division and then a prosecutor at the Justice Department, he is a professor at the Wayne State University Law School. He is currently working on a book, “The Prosecution and Defense of Public Corruption: The Law & Legal Strategies,” to be published by Oxford University Press.

Until the Dodd-Frank Act was enacted, the S.E.C. could only provide a whistle-blower award for information about insider trading. Until last week, only seven payments, totaling about $160,000, had been made for information about insider trading. It is not surprising that the program was only a modest success because insider trading tends to involve a limited circle of people who usually trade on the information rather than disclosing possible wrongdoing to the S.E.C.

On Friday, the S.E.C. announced that it had awarded $1 million to the former wife of David E. Zilkha for providing previously undisclosed e-mails that led to administrative charges for insider trading against Mr. Zilkha and a $28 million settlement with the now-defunct hedge fund Pequot Capital Management and its chief executive, Arthur J. Samberg. The Pequot investigation had been closed twice by the S.E.C. because of a lack of evidence, and the case would not have moved forward without the new information.

The Dodd-Frank Act creates a much broader whistle-blower program that authorizes the S.E.C. to pay a person for providing information that leads to “any judicial or administrative action brought by the commission under the securities laws that results in monetary sanctions exceeding $1,000,000.” The payments can be made in any type of case the S.E.C. can bring that sets off a civil penalty or disgorgement, such as broker-dealer violations, corporate disclosure cases, accounting fraud and even violations of the Foreign Corrupt Practices Act, which is part of the federal securities law.

Accounting frauds often develop over a long period of time as companies try to make their quarterly numbers by engaging in transactions and making bookkeeping entries that take them over the line. Lower-level employees, particularly those in financial positions, may have information about the financial irregularities but are often unwilling to risk their careers by blowing the whistle. Without an insider providing information about the types of transactions that should be looked at, the accounting misconduct may not emerge for years, if ever.

Dell’s settlement of securities fraud charges last week is a good example of how an accounting fraud can unfold. According to the S.E.C.’s complaint, the company engaged in fraudulent accounting from 2002 to 2006 in order to meet its earnings projections and also misled investors about payments it received from Intel.

Dell paid a $100 million penalty as part of the settlement, and its chief executive, Michael S. Dell, and two other officers paid a total of $11 million for their roles in the securities violations. This is the type of fraud that a corporate insider may well have disclosed much earlier if there had been a financial incentive for blowing the whistle to the S.E.C.

In order to encourage disclosure of securities violations, the Dodd-Frank Act creates a minimum amount for an award at 10 percent of the monetary sanctions imposed in the case, with a maximum of 30 percent of the sanctions. The earlier insider-trading whistle-blower program limited the award to a maximum of 10 percent of the recovered amount, so there is now a much stronger financial incentive to make disclosure to the S.E.C.

Using the Dell settlement as an example, a whistle-blower could have received at least $11 million, and the S.E.C. could have awarded as much as $33 million for information leading to the enforcement action.

The calculation of the amount of the whistle-blower award includes monetary sanctions in “related actions,” such as criminal prosecutions, and any disgorgement of ill-gotten gains by the defendant. By expanding the whistle-blower program to any type of securities law violation, it is likely there will be an upswing in disclosures that come within the Foreign Corrupt Practices Act, an area that has already seen a significant increase in activity by the Justice Department and the S.E.C.

Recent foreign corruption cases involving significant settlements include Siemens, which paid total criminal and civil penalties of $800 million in 2008, and Technip, which agreed in June to disgorge $98 million and pay a $240 million criminal fine. The potential whistle-blower awards in these types of cases would rival those seen in the health care fraud arena, such as the recent payment of $45 million to two individuals who provided information about AstraZeneca that led to a $520 million settlement.

In order to qualify for an award, the person must provide the “original information” that was “derived from the independent knowledge or analysis of a whistle-blower” about which the S.E.C. was unaware and that was not drawn from the news media, a legal proceeding or government report, unless the person was the source of that information.

The actual amount of the award, beyond the 10 percent floor established by the law, is up to the S.E.C. to decide, based on the significance of the information, the degree of assistance provided, consideration of the deterrent effect of an award, and “such additional relevant factors as the commission may establish by rule or regulation.” A person denied an award, or who seeks more money, can challenge the S.E.C.’s decision in the appropriate federal appellate court.

Disclosing possible wrongdoing by one’s employer entails enormous risks, and the Dodd-Frank Act provides a measure of protection for whistle-blowers. The law states that an employer may not “discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistle-blower in the terms and conditions of employment because of any lawful act done by the whistle-blower” in reporting information to the S.E.C. or testifying in an investigation or legal proceeding. Even with that protection, becoming a whistle-blower is not something to aspire to because it may be years before any award is made, if there is one.

It will be interesting to see whether the Dodd-Frank Act’s expansion of the securities whistle-blower program results in corporate employees reporting possible corporate misconduct to the S.E.C. first, rather than to their employer. It may be that the next Sherron Watkins (who became famous for reporting accounting fraud at Enron in an anonymous letter to its chief executive. Kenneth L. Lay, a few months before the company collapsed) will go straight to the government rather than use an in-house reporting system to air potential problems.

The challenge for the S.E.C. will be separating out valid information about potential violations from the inevitable complaining and unfounded accusations that any reporting program generates, particularly when there may be a pot of gold creating an incentive to report derogatory information.

After the debacle involving Bernard L. Madoff’s enormous Ponzi scheme, when credible information was ignored by the commission, the S.E.C. is likely to take most disclosures seriously, at least initially. We can expect to see an increase in investigations of corporate activities by the S.E.C. and the Justice Department now that there is the allure of a substantial whistle-blower bounty for reporting information.

This is bad news for companies that should expect at least some of their employees to report to the government first rather than relying on internal disclosure mechanisms.

– Peter J. Henning

http://dealbook.blogs.nytimes.com/2010/07/26/come-blow-your-horn-to-the-s-e-c/

Whistleblower Protections Equal Safer Food Federal Workers Say

Dylan Blaylock, Communications Director — Mon, 13 Sep 2010 10:23:13 -0700

Survey Results From FDA, USDA Workers Eye-Opening

WASHINGTON - September 13 - According to a new survey, scientists from Food and Drug Administration (FDA) and United States Department of Agriculture (USDA) overwhelmingly believe that if they, their coworkers, and food industry employees enjoyed solid whistleblower protections, food consumed in America would be safer to eat.

Earlier today, GAP coalition member Union of Concerned Scientists released a survey regarding food safety oversight. The UCS survey was given to thousands of scientists and meat inspectors at the FDA and USDA - of which over 1,700 responded. Specifically, by a margin of 70 percent to 2 percent, survey respondents said that "establishing strong whistleblower protections for private or public employees who report problems affecting the food supply" would improve rather than worsen food safety.

The Government Accountability Project (GAP) works with many federal and corporate food safety whistleblowers to protect them from retaliation, and advocates for stronger whistleblower rights.

"These survey results are proof that federal employees believe some of our food is unsafe, but can't act out to tell us," said GAP Food Integrity Campaign Director Amanda Hitt. "Our clients make food integrity disclosures at great peril to their personal and professional lives. They deserve the chance to safely speak up on behalf of public health, but without the significant hurdles and backlash that current whistleblowers have to endure."

The UCS studies confirm what numerous GAP clients have stated. GAP client Dr. Dean Wyatt, for example, is a Public Health Veterinarian for USDA Food Safety Inspection Service (FSIS). Dr. Wyatt discovered gruesome and distasteful violations of humane handling regulations - not at just one slaughterhouse, but two. Each time, Dr. Wyatt voiced concerns to his supervisors. However, FSIS officials continually chose to ignore shocking reports of inhumane treatment and safety violations. Instead, FSIS reprimanded him on several occasions for trying to hold the incompliant plants accountable, and subjected him to a slew of blatant retaliatory actions.

More on the UCS survey can be found in that organization's press release at http://bit.ly/bQhgrG

The Government Accountability Project (GAP) is a 30-year-old nonprofit public interest group that promotes government and corporate accountability by advancing occupational free speech, defending whistleblowers, and empowering citizen activists. We pursue this mission through our Nuclear Safety, International Reform, Corporate Accountability, Food & Drug Safety, and Federal Employee/National Security programs. GAP is the nation's leading whistleblower protection organization.

New SEC Whistleblower Rules Spur Fraud Complaints

NewsInferno.com — Wed, 08 Sep 2010 10:23:24 -0700

The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by the US Congress and signed by President Obama earlier this summer and contains some very attractive incentives for securities fraud whistleblowers.Now, according to the US Securities and Exchange Commission (SEC), the Act is leading to an increase in tips, wrote the Wall Street Journal.

The law empowers the SEC and the Commodities Futures Trading Commission (CFTC) to award between 10 and 30 percent of any monetary sanctions that exceed $1 million to whistleblowers providing information leading to a successful enforcement. The hope is that, said the Journal, massive financial debacles, such as what was seen in the historic Bernard Madoff Ponzi scam, be averted.

We previously wrote that according the Financial Times, the so-called “Wall Street Tip-Off Law” is expected to lead to a sharp increase in tips from senior employees and third parties with knowledge of securities fraud. “The scale of the awards reflects the high quality of whistleblower we hope to get—people within a company, broker or other regulated firm that we might not have heard from before,” Stephen Cohen, an SEC official, told the Financial Times. “We’re expecting a tremendous response.”

Lawyers representing whistle-blowers are passing the information along. “We’ve gotten some very high-quality tips,” SEC official Stephen Cohen told the Journal. “The goal is not just to get more tips; we want to get more high-quality tips,” Cohen added, noting that the law is meant to speed information delivery, but to also close cases, minimize loss, and recover victim funds, wrote the Journal. Not unexpectedly, defense lawyers say that the program could prompt the reporting of meaningless cases and could stop employees from working through these issues internally, said the Journal.

Because of the broad nature of the new program, it is conceivable that informants will not always be corporate insiders, but those who could present a case that enables the SEC to locate a fraud, said the Journal, noting that this element of the program was likely put in place in response to the Madoff fiasco. In that case, Harry Markopolos had approached the SEC on a variety of occasions over several years with information pointing to Madoff’s massively growing Ponzi scam.

The Act was passed in response to the recent recession, which holds the record as the worst economic meltdown experienced by the US since the Great Depression; securities malfeasance played a large role in the downturn. Until Dodd-Frank was enacted, the SEC could only provide a whistleblower award for information regarding insider trading, limiting the award to a maximum of 10 percent of the recovered amount.

Now, whistleblowers can report fraud anonymously and employers are prohibited from firing, demoting, suspending, threatening, harassing, or discriminating against them. To be eligible, a whistleblower’s information must lead to a successful SEC or CFTC enforcement. Regulators will determine the extent of awards based on a number of factors, including the significance of the information provided and whistleblower assistance.

Another report in Forbes Magazine recommended that those seeking to take advantage of the new law consult with an attorney to ensure their rights are protected; all anonymous whistleblowers must be represented by an attorney.

NewsInferno.com disclaimer: This article: New SEC Whistleblower Rules Spur Fraud Complaints was posted on Tuesday, September 7th, 2010 at 8:59 am at NewsInferno.com and is filed under Stock Fraud.

The fatal flaw in most inhouse whistleblower programs

Jennifer Azara — Mon, 23 Aug 2010 09:41:23 -0700

    * Thinking about getting Recovery funds? Think some more
    * Could your company’s safety incentive program backfire?
    * ‘Workshare’: Real alternative to layoffs — and state-supported, too
    * Read the fine print on your rewards programs — often

Have a way for employees to speak up about any funny business they witness? Great. But are those tips being ignored?

Quite possibly … if they’re made anonymously.

That’s the startling finding of a new survey published in the Journal of Management Studies.

Despite the fact that whistleblower mechanisms have been repeatedly proven to be the most effective ways to detect and prevent financial funny business, most companies won’t take any action on a whistleblower tip if it comes from an anonymous source.

The irony: Anonymous tips are often the largest and most dramatic!

No matter what system you currently have in place to guard against fraud, here’s are two keys make the most of this critical risk management tool.

Key #1: Make it as broad as possible

A whistleblower hotline doesn’t have to be used strictly when an employee see a coworker padding an expense report.

The sad truth is, these days so many actions can negatively impact your organization and its bottom line. So it’s a smart idea to expand your definition of what is a whistleblower-worthy incident, including concerns about:

    * safety
    * discrimination, and even
    * workplace bullying.

Key #2: Embrace as many best practices as possible

While every company is going to hit upon a system that works best for its own situation, there are definitely some best practices when it comes to the “ideal” whistleblower hotline:

    * They are monitored externally, rather than in-house
    * They offer 24/7 access, and
    * They are live, vs. a recorded message line. (Some people choose not to leave a tip when they don’t reach a real person).

Of course, some of these strategies you may be able to embrace, some you might not.

Bottom line: Make sure that everyone understands that having any type of whistleblower mechanism is better than having none at all.

Indian Cabinet Clears Way to Protect Whistleblowers

Economic Times — Tue, 10 Aug 2010 11:10:22 -0700

Cabinet clears whistleblower protection bill

NEW DELHI: The Union Cabinet has cleared a bill to protect whistleblowers and punish those exposing identity of people disclosing information. The proposed legislation, Public Interest Disclosure and Protection to Persons Making The Disclosure Bill, 2010, provides the Central Vigilance Commission powers of a civil court to hand down harsh penalty to people revealing identity of whistleblowers. Go to The Economic Times website for the entire article

Big Rewards Could Trigger More WhistleBlowing

Andrew Ross Sorkin — Mon, 09 Aug 2010 10:16:37 -0700

Whistle-blowers looking for a potential multimillion-dollar payday could start coming out of the woodwork with alacrity thanks to tip-off incentives included within the Dodd-Frank financial reform act, The Financial Times reported, citing comments from lawyers.

http://dealbook.blogs.nytimes.com/2010/08/09/big-rewards-could-trigger-more-whistleblowing/

Keeping information private now a tougher task

By Mitch Joel, Special to the Sun August 5, 2010 — Thu, 05 Aug 2010 14:17:17 -0700

This is a very interesting article about the transformation of sharing information throughout the digital world and the affect its having on our business practices. - Shannon Walker - President of Whistleblower Security Inc.

WikiLeaks transforms digital business culture - Keeping information private now a tougher task...The Vancouver Sun

By Mitch Joel, Special to the Sun August 5, 2010
WikiLeaks scared everybody last month. How is it possible that an individual can become a whistleblower by uploading thousands of documents to a website that anyone can have access to, and that individual doing the uploading cannot be traced?

In the good old days (about four years ago -- when WikiLeaks didn't exist), if someone wanted to be a whistleblower, it was a very complex and dangerous process that not only put employees at risk, but everyone in their family and social community as well. Whistle-blowing was a laborious process of gathering information, lying about your actions to colleagues, smuggling information in and out of a company, secret meetings, wiretaps, and other activities usually reserved for a John Grisham novel. Now, it's a couple of clicks from just about anywhere to a website that has no physical location and at which the creators have not been formerly identified (although we do know that Julian Assange acts as its public representation). How can a company like WikiLeaks -- which has created a platform so open and so powerful -- be so closed in terms of who they are, where they are from, and what their real endgame is?

This is the new nature of business in a digital world. It's not just the information and intellectual property that a company stores on its servers and hard drives, it is much more about the culture that is being created by its people, and how this integrates into something few businesses really spend any time focusing on: Internet culture and what it means to business today.

By it's very definition, business culture was always about closed platforms: protecting your information, protecting your strategy, keeping who is working for you private, ensuring that the competition was never able to know your next move or the things you do that make your business so unique and successful. This attitude is not only still relevant, but it is a requirement in a world where any one individual can have a thought and publish it to the world in text, images, audio and video, instantly and for free using the Internet.

Look no further than Twitter, You-Tube, Facebook, tumbler and beyond. There is no need for technical skill, and there is no need to be the next Hemingway to do it. Interested in knowing how many employees your competitors have, who they are, and everything else about them (including job titles and descriptions)? Do a quick search on LinkedIn for the company's name (while you're at it, do one for your own company). Do you still think you live in a world where your private business information is not open and public?

The knee-jerk reaction is to shut it all down. Lock the employees out. All new business models and shifts in culture are uncomfortable because they are weird. They're weird because they do not look, act or do what we have known to date.

Think about the concept of online dating before its popularity. Some still hold to their conviction that online dating is only for those who are supremely lonely. Reality check: In the past few years, online dating has become the primary way that most people meet, fall in love and get married (it's also been a primary driver for divorces and promiscuous hookups, but that's another story).

WikiLeaks and the case for figuring out how much a business must open up in the era of the Internet culture is a current affair that cannot be ignored. "In media history up to now, the press is free to report on what the powerful wish to keep secret because the laws of a given nation protect it," said media pundit and NYU journalism professor, Jay Rosen, in his recent PressThink blog post: "The Afghanistan War Logs Released by WikiLeaks, the World's First Stateless News Organization".

"But WikiLeaks is able to report on what the powerful wish to keep secret because the logic of the Internet permits it. This is new."

What the Internet now allows is what businesses must seriously start paying attention to.

Recently, Charlene Li (founder of Altimeter Group and the co-author of the best-selling business book, Groundswell) released her second book, Open Leadership: How Social Technology Can Transform The Way You Lead. In it, Li urges business leaders to "be open, be transparent, be authentic" (talk about some tall and un-traditional orders). The book goes on to promise how leaders can "tap into the power of the social technology revolution and use social media top be 'open' while maintaining control." The subtlety of the book and the surrounding context of the debate as to whether businesses can ever truly be open is a paradox, because if businesses choose to ignore Internet culture, what they fail to realize is that people now have this technology in the palms of their hands. And these voices will not be silenced (no matter how complex the privacy policy of the employment agreement is). Meaning: A business can chose to not be open, but so long as all of their employees (or even some of them) engage in these many channels and platforms, they are -- by default -- open and more transparent whether they like it or not.

What's a brand to do? In a recent interview, Li stated: "What has happened over the last three years is that we now have a culture of sharing that didn't exist three years ago ... Now we think and act very differently because of these technologies. The societal change that has happened is that we share more."

The act of sharing is no longer relegated to e-mail chains, a phone call, or a conference room meeting. The act of sharing has been digitally distributed across borders to the point where businesses that are embracing this culture now actively share some of their internal thinking openly to the world. The idea isn't to simply put everything you think out into the world. The real opportunity is to listen and accept the feedback, conversation and information that floats back.

This is what makes Internet culture so fascinating, and it's what makes the simple act of sharing such a powerful force in our ever-changing world. It's also what makes both businesses and those watching the WikiLeaks story unfold so scared.

Mitch Joel is president of the digital marketing agency Twist Image and the author of Six Pixels of Separation.
© Copyright (c) The Vancouver Sun

Research supports Ethical Environment promotes likelihood of reports of wrongdoing

Boulder Business Development Examiner Alexi Molden — Wed, 04 Aug 2010 16:04:49 -0700

This is a great example of the importance of empowering employees and embracing a culture of transparency and integrity. If you preach the practice, you will reap the benefits.

the Examiner...

DoddFrank Strengthens Whistleblower Protections and Encourages Pursuit of Bounties

Shannon Walker — Thu, 29 Jul 2010 09:27:02 -0700

According to Section 929A of Dodd-Frank, the new regulations expand the whistleblower protections of Sarbanes-Oxley to include those employees of non-publicly traded subsidiaries. Dodd-Frank also strengthens the whistleblower protection including strong new monetary incentives provided to employees to report compliance issues to the SEC and CFTC.

If your publicly traded organization has non-public subsidiaries, you need to review your internal whistleblower policies immediately to ensure you have reporting mechanisms in place for those employees. Employees are being encouraged more and more to come forward and provide information in exchange for substantial bounties by the US government.

SEC now freer to hike whistleblower awards

Zachary A. Goldfarb, Washington Post Staff Writer — Wed, 28 Jul 2010 14:37:56 -0700

With powerful senators watching closely, federal investigators search high and low for evidence of insider trading in shares of Microsoft.

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/26/AR2010072605406.html

Internal Control The Key to Ethical Profitability

By Robert Tie — Thu, 22 Jul 2010 11:44:42 -0700

http://www.acfe.com/newsletters/fraud-examiner.asp?copy=july10-internal-control

SOX 404 Auditor Attestation Not Required for Smaller US Reporting Companies

Clark Wilson LLP — Thu, 22 Jul 2010 14:58:45 -0700

On Wednesday, July 21, 2010, President Obama signed into law the Dodd-Frank Act, which, among other measures, exempts smaller reporting companies from the Sarbanes-Oxley (SOX) requirement under Section 404(b) for an auditor report on management's assessment of internal controls over financial reporting. Companies that are exempt are "non-accelerated filers". A company is a non-accelerated filer until its non-affiliated market capitalization is $75 million or more, measured at the end of the previous year's second quarter. An accelerated filer can exit accelerated filing status when its market capitalization is less than $50 million at that measurement date.

The exemption does not affect the requirement that management report on internal controls over financial reporting required under Section 404(a) of SOX. However it comes as very welcome relief for smaller issuers, who faced the prospect of much greater auditor related costs as a result of SOX 404(b). The law comes just in time for smaller issuers, as the auditor report was to be due for non-accelerated filers for fiscal years ended on or after June 15, 2010.

If you have any questions about how the new law affects your company, contact any member of Clark Wilson's Corporate Finance / Securities Law Group.

Securities Law Bulletin is produced by the Corporate Finance / Securities Law Group at Clark Wilson LLP. The information and links in this bulletin should not be treated by readers as legal advice and ought not be relied upon without further, detailed legal counsel being sought.

Sweeping New Whistleblower Incentives and Protections in Financial Reform Bill

Shannon Walker — Wed, 21 Jul 2010 08:51:28 -0700

On July 15, 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. President Obama has indicated that he will sign the bill that has now passed both of the Houses.

The legislation covers a wide range of topics in an effort to address the causes of the recent turmoil in the financial markets. It includes significant new whistleblower protections, including the creation of SEC and CFTC (Commodities Futures Trading Commission) whistleblower programs, a dramatic expansion of current whistleblower protections under the Sarbanes-Oxley Act of 2002, and a new whistleblower cause of action for employees performing tasks related to consumer financial products or services. Significantly, the legislation creates alternative paths for whistleblowers to assert their rights, often with different and conflicting rights, procedures and remedies. This Employment Law Alert summarizes the new whistleblower incentives and protections in the Dodd-Frank Act.

Fired Pediatric Hospice Nurse Fights To Clear Her Name

Shannon Walker — Tue, 06 Jul 2010 14:17:40 -0700

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/03/AR2010070302827.html

What BP was Missing on Deepwater Horizon A Whistleblower

Shannon Walker — Wed, 23 Jun 2010 12:46:15 -0700

http://money.cnn.com/2010/06/22/news/companies/bp_horizon_macondo_whistleblower.fortune/

Seeking Clarity at Calgary City Hall

Shannon Walker — Tue, 15 Jun 2010 13:55:11 -0700

This article demonstrates the importance having a whistleblower process in place to support municipal procurement practices.

http://www.calgaryherald.com/business/Seeking+clarity+City+Hall/3135505/story.html

Whistleblower says poor inspections partly to blame for oil spill

Shannon Walker — Fri, 11 Jun 2010 09:52:24 -0700

http://www.cnn.com/2010/POLITICS/06/08/govt.whistleblower.on.bp/index.html?hpt=T2

Heart Device Maker Hospitals in Three States Will Pay $38M to Settle Whistleblower Kickback Allegations

Shannon Walker — Tue, 08 Jun 2010 09:30:06 -0700

http://www.healthleadersmedia.com/content/FIN-251998/Heart-Device-Maker-Hospitals-in-Three-States-Will-Pay-38M-to-Settle-Whistleblower-Kickback-Allegations

Work and Play in the Age of Social Networking

Shannon Walker — Fri, 04 Jun 2010 15:27:38 -0700

http://www.priv.gc.ca/speech/2010/sp-d_20100512_ed_e.cfm

Billions Heading to Madoff Recovery Pot

Shannon Walker — Tue, 18 May 2010 14:01:33 -0700

http://www.reuters.com/article/idUSN0319982920100503

US Supreme Court Whistleblower Lawsuit Limits Use of Public Records

Shannon Walker — Fri, 14 May 2010 16:09:44 -0700

http//www.pinewswire.net/2010/04/supreme-court-whistleblower-lawsuit-ruling-limits-use-of-public-records/

Whistleblower Bill killed by PEI government

CBC News April 8, 2010 — Wed, 05 May 2010 08:34:35 -0700

An attempt by the P.E.I. Progressive Conservative Party to have whistleblower protection legislation enacted in the province was defeated by the government Thursday.

Opposition Leader Olive Crane spoke about the whistleblower legislation to reporters Thursday morning, with the backing of an expert on such legislation.

She said the bill was designed to protect public servants from reprisals if they report government wrongdoings.

It would have protected the confidentiality of whistleblowers, Crane said, and ensured that they were protected against repercussions such as job loss, demotion, or harassment.

David Hutton, of the Federal Accountability Initiative for Reform (FAIR), which promotes integrity within government, backed the bill.

" We want to endorse this bill as being a valuable initiative, and one that will achieve its purpose," he said.

"The opponents will often put forward very apocalyptic predictions of what will happen, that there will be a flood of embarrassing revelations, that government will grind to a halt because people will be afraid to do anything, employees will blackmail their bosses.

"None of these things has ever happened."

Crane said all politicians receive information from confidential sources, and they deserve protection.

"We all know we receive brown envelopes, and behind that envelope is a real person, and if you get to meet that person you get to know just how much stress they're under," she said. "So, this is the least we can do for that person."

But when the bill had its second reading, it came under fierce attack from the Liberals, who hold 24 seats in the 27-seat legislature.

Premier Robert Ghiz said the bill was unnecessary, and criticized it as being flawed and poorly researched.

Ghiz said there is stronger legislative protection already in place — including the Auditor General's Act and the Fraud Awareness Act.