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31 Days to a More Effective Compliance Program – Monitoring of third-parties

FCPA Compliance & Ethics -

How can data analytics be used for continuous improvement where the primary sales force used by a company is third-parties? A clear majority of FCPA violations and related enforcement actions have come from the use of third-parties. While sham contracting (i.e., using a third-party to conduit the payment of a bribe) has lessened in recent [...]

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COVID-19: Key Considerations for Malaysian Financial Institutions

Global Compliance News -

Due to the global outbreak of the novel coronavirus (COVID-19) and with the implementation of the Restriction of Movement Order (Order) on 18 March 2020, Malaysian financial institutions will need to adapt their ‘business as usual’ practices. It is imperative for financial institutions to take appropriate measures and actions to ensure business continuity and their ability to comply with regulatory requirements. This alert highlights the key regulatory considerations for Malaysian financial institutions.

Regulatory requirements

Financial institutions must ensure they can comply with all regulatory requirements set by the Central Bank of Malaysia (BNM) including:

  • maintaining the minimum capital funds and/or liquidity ratios prescribed by BNM and capital adequacy level that commensurates with their risk profiles at all times; and 
  • ensuring that their directors and officers remain fit and proper under the current situation. To the extent that the directors and/or officers are unable to continue to discharge his/her respective functions for health reasons, notification should be made to BNM and discussions may be necessary to appoint another officer to hold the relevant role, or alternative measures that may include cessation from office by the relevant officer.

BNM should be notified immediately if the financial institution anticipates that there will be difficulty or delay in fulfilling any of the regulatory requirements.

Board and management

Financial institutions must ensure that their board of directors (Board) and management are kept informed of the impact and latest developments of the COVID-19 crisis on their businesses. The Board and management must continuously assess the threats and risks on the financial institution.

This includes considering the impact of the Order on its customers, suppliers and other contractual counterparties. Specifically, they will need to assess if these counterparties have the ability to avoid its obligations:

(a) pursuant to a force majeure clause (i.e., to seek reprieve from having to perform its obligations due to circumstances beyond its control);

(b) by claiming that it is released from its obligations as the contract has been frustrated (i.e., there has been a supervening event that is not the fault of either party such that the change to the rights/obligations under the contract is not within contemplation and therefore parties should be relieved from performing the contract); or

(c) otherwise seek to negotiate the inclusion of a material adverse change clause for pandemics or epidemics (i.e., the occurrence of an event that results in a material adverse change that would enable the parties to be relieved from being bound by the contractual terms).

Business continuity planning and communication

Financial institutions should ensure that appropriate business continuity plans (BCP) and disaster recovery plans (DRP) for all critical business functions are in place to address the likely disruption. Financial institutions need to ensure that the following are in place:

(a) procedures to be followed in response to a major operational disruption;

(b) escalation, declaration and notification procedures;

(c) conditions for the activation of BCP and authorised individuals empowered to declare a disaster and grant permission to execute recovery processes;

(d) list of all resources required to cover critical business functions;

(e) relevant information about the alternate and recovery sites; and

(f) procedures for restoring normal business operations.

Communication is of the utmost importance especially during a business disruption or a crisis. Accordingly, financial institutions should include in their BCP a communication plan for notifying all relevant and external stakeholders such as home and host regulators, counterparties, key service providers, media and the public, following a major operational disruption.

Banks1 are regarded as providers of an essential service under the Order and the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 have clarified that the number of personnel and patron at the premises used for the provision of essential service must be kept at the minimum. Banks will therefore not be able to have its full team of employees on the ground to carry out its operations. The BCP and DRP, together with the communication strategies will need to be modulated as employees will likely be working in split teams across different locations and work-from-home arrangements. There will also need to be crowd containment measures at the various branch offices.

Cybersecurity

Under the Guideline on Risk Management in Technology, financial institutions must ensure the adequacy of their IT and cybersecurity strategic plans. Such plans must, amongst others, address the complexity of the institution’s operations and changes in the risk profile as well as business environment.

As alternative working arrangements would have been implemented, financial institutions should ensure that they are appropriately equipped to manage any cybersecurity risks that may arise as a result of employees working from various locations (including from their homes). In particular, sensitive data such as customer information and digital/electronic business data must continue to be protected during work-from-home arrangements.

Developments in Malaysia

Since the issuance of the Order, the Prime Minister, the National Security Council and various Ministries have issued clarifications to provide further colour to the Order and the restrictions. These supplemental explanations can guide financial institutions in their discussions with their contractual counterparties and employees. Our client alerts contain details of these clarifications and can be read on our website and LinkedIn pages.

It is uncertain whether the Order will be extended beyond 31 March 2020 and financial institutions will need to monitor these developments closely. Insurers are not regarded as providers of essential service.

1 Insurers are not regarded as providers of essential service.

The post COVID-19: Key Considerations for Malaysian Financial Institutions appeared first on Global Compliance News.

Compliance and Coronavirus-Eric Feldman on Culture Assessment During Coronavirus

FCPA Compliance & Ethics -

Welcome to the newest addition to the Compliance Podcast Network, Compliance and Coronavirus. As the Voice of Compliance, I wanted to start a podcast which will help to bring both clarity and sanity to the compliance practitioner and compliance profession during this worldwide health and healthcare crisis. In this episode, I am joined by Eric [...]

The post Compliance and Coronavirus-Eric Feldman on Culture Assessment During Coronavirus appeared first on Compliance Report.

Telehealth Compliance Issues

The Compliance & Ethics Blog -

Post By: Raj Shah & Baylee Culverhouse The COVID-19 pandemic has created new and emerging telehealth compliance issues—relaxing standards in certain areas while increasing the need for greater compliance planning and implementation in others. This blog post specifically discusses certain compliance issues with respect to three telehealth issues: (1) practicing telemedicine across state lines; (2) […]

Ahead of Privacy – Netherlands Update

Global Compliance News -

COVID-19: Global Data Privacy & Security Survey

As COVID-19 quickly spreads across the globe and has now been officially declared a pandemic, many companies are facing difficult business and legal challenges and are required to make some urgent decisions in order to keep their workforce safe and ensure business continuity. Data plays a crucial role in containing the spread of the virus but not every data processing can be justified on that basis. A balance must be found between protecting public health and personal privacy.

Baker McKenzie is pleased to provide you with a guide designed to assist employers assess whether or not certain data processing they may consider in light of COVID-19 is compliant with data privacy regulation.

Click here to access the guide, which features high-level views on five common questions companies are facing from Baker McKenzie lawyers from 13 countries.

Fine issued by Dutch DPA against sports association

The Dutch Data Protection Authority (Dutch DPA) issued a 525K EUR fine under the General Data Protection Regulation against the Dutch National Tennis Association. This fine was imposed for the – allegedly – unauthorized sale of member data to the Association’s sponsors. The sponsors have contacted a selection of the members by mail or phone, where after some of the members have complained about this contact without their consent. The Dutch DPA ruled that the sale of member data by the Association to its sponsors could not be based on a lawful processing ground. This case illustrates that complaints and press coverage seems to be important triggers to the Dutch DPA to start investigation and move to direct enforcement. Also, the Dutch DPA elaborates on the processing ground of “further use”, which is clearly considered as alternative to achieve lawfulness. The Association has announced it will appeal the fine decision. However, with view to Dutch administrative law, a decision is not expected before 2021.

The full decision can be found here (only available in Dutch)

As we introduced in our previous Ahead of Privacy – Update, the GDPR Enforcement Tracker provides a comprehensive overview of the EU enforcement actions since the introduction of the GDPR in May 2018, including this “new” fine of the DDPA. Our GDPR Enforcement Tracker can be found here.

The Dutch DPA receives an increasing number of data breach notifications

In 2019, The Dutch Data Protection Authority (“Dutch DPA”) received 29% more data breach notifications comparing to the year before. In European context, the Netherlands is leading with its number of data breach notifications, together with Germany and the United Kingdom. According to the Dutch DPA, organizations seems to be more and more aware of data breach notification requirements of the GDPR.

Similar to 2018, most of the data breach notifications were reported by the financial sector (30%), the healthcare sector (28%) and the public administration sector (17%). The majority of the data breaches followed from the sending or handing over personal data to the wrong recipient.

Throughout the year, the Dutch DPA completed several investigations onto organizations into data breaches and its (lack of) notifications. Although until now the Dutch DPA has taken less far reaching actions, the investigations could give rise to sanctions, including fines.

More information can be found here (available in Dutch).

International Data Transfer – Series of blogs

Since 2013, the Court of Justice of the European Union (“CJEU”) have been looking at the legitimacy of international data transfer from the EU to third-countries. At this moment, the CJEU is evaluating the Standard Contractual Clauses, which have been the bedrock of cross border personal data transfers outside the EU for many years. The Advocate General (advising the CJEU) concluded that the Standard Contractual Clauses should not be invalidated, but that reliance on the Standard Contractual Clauses requires companies to undertake certain additional measures to assure compliance. In particular, data exporters need to make their own assessment as to whether the data importer is able to materially comply with all Standard Contractual Clauses requirements.

Baker McKenzie’s Privacy Team published a series of blogs, on which we will focus more specifically on the applicability, pros and cons of transfer mechanisms, including Standard Contractual Clauses, Privacy Shield, Binding Corporate Rules and other lawful transfer options.

See for the latest data transfer update here.

Insurer may not demand phone number from intended customers

In January this year, the Financial Services Complaints Board (in Dutch: Klachteninstituut Financiële Dienstverlening) (“KiFiD”) ruled that rejecting an application for insurance because the intended customer did not provide a telephone number infringes the GDPR. The KiFiD found that the insurer did not demonstrate the necessity to process a telephone number of the insured customer for the performance of an insurance contract. The argument that it is an “extra service” to call the insured in case of important matters, cannot lead to the required necessity. Especially because the customer did indicate that he was best reached by e-mail, there was no legitimate purpose to process its telephone number.

Case available here (only available in Dutch).

Dutch legislation on Governments’ anti-fraud system infringes fundamental (privacy) rights

The Dutch government’s System Risk Indication (“SyRI”) is able to detect and combat fraud in areas such as benefits, allowances and taxes. According to the Dutch Government, SyRI is a technical infrastructure allowing data to be linked and analyzed anonymously in a secure environment in order to generate risk reports.

In 2018, a number of civil society organizations committed to privacy started legal proceedings against the Dutch government to stop the use of SyRI. The underlying legislation enabling the SyRI system would infringe human rights, including privacy rights. The District Court ruled on the lawfulness of SyRI by assessing whether the legal basis of SyRI contravenes higher law. In her assessment, the District Court used fundamental principles of the GDPR to give more substance to the European Convention on Human Rights, under which the principle of transparency, dataminimalisation, integrity and confidentiality.

In the end, the District court ruled that the SyRI-legislation is insufficiently comprehensible and verifiable. The court considered that new technological solutions could play an important role in fraud prevention, but only as long as it insures a fair balance between efficiency of the technology and the right to respect for private life.

In response to this judgement, the Dutch Employee Insurance Agency (UWV) has announced it will investigate whether their fraud system does comply with (privacy) laws. Case available here.

If you wish to know more about this update, or discuss other data privacy topics, feel free to contact the Amsterdam Privacy Team.

The post Ahead of Privacy – Netherlands Update appeared first on Global Compliance News.

Great Women in Compliance – Episode 56 – Mary & Lisa on Compliance and Coronavirus

FCPA Compliance & Ethics -

Welcome to the Great Women in Compliance Podcast, co-hosted by Lisa Fine and Mary Shirley. COVID-19 has had a monumental impact all over the world.  Every day, we see new public health issues, are living through economic challenges and everyone’s daily lives are very different than a year ago, or even 3 months ago.  In [...]

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Compliance into the Weeds: Episode 165-Covidiocy

FCPA Compliance & Ethics -

Compliance into the Weeds is the only weekly podcast which takes a deep dive into a compliance related topic, literally going into the weeds to more fully explore a subject. While we have both written and spoken about companies who are responding positively during the COVID-19 crisis, today we take up companies who are not [...]

The post Compliance into the Weeds: Episode 165-Covidiocy appeared first on Compliance Report.

Employers Face Tough Pay Decisions Amid the Coronavirus

Corporate Compliance Insights -

Now that the coronavirus is considered a pandemic, employers face a multitude of concerns when it comes to COVID-19, including compensation issues. Cowden Associates’ Elliot Dinkin addresses several of the key questions employers are asking during this crisis. The coronavirus crisis has had a significant impact on daily life and created a climate for businesses […] The post Employers Face Tough Pay Decisions Amid the Coronavirus appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

Thailand: Holding AGMs Amidst COVID-19

Global Compliance News -

Many companies in Thailand whose financial years end on 31 December will now be heading into “AGM season”. During this period, they must prepare financial statements, have them audited, then hold an annual general meeting (“AGM“) for the shareholders to consider and approve the financial statements.

For administrative convenience, companies whose directors and shareholders are located in various countries usually prefer to hold electronic meetings in order to help directors and shareholders avoid the burden of travelling to Thailand for in-person meetings. Thus, such companies face the issue of whether or not electronic meetings are legally acceptable under Thai law.

Electronic meetings of board of directors and shareholders are, to some certain extent, acceptable under Thai law, provided the meetings fulfil the regulations of the Ministry of Commerce (“MOC“).

Nevertheless, given that one requirement is that all attendees (either attending in person or via electronic means) must be in Thailand, it is likely that the MOC’s regulations may not be fully beneficial to companies whose directors or shareholders are based outside Thailand. To date, there is no new notification issued to resolve this gap.

However, given the spread of the COVID-19, the MOC has issued a mitigating measure, allowing companies that cannot hold meetings within the deadline prescribed by the law due to the COVID-19 pandemic, to submit a clarification letter to the MOC after holding the meetings. Although the MOC’s wording is not explicit, the companies that cannot approve the financial statements within the deadline because of the pandemic should not be subject to the late filing fines.

DOWNLOAD ALERT

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Dealing with COVID-19: What Now for US and Canadian Public Companies?

Global Compliance News -

In response to the outbreak of Coronavirus Disease 2019 (COVID-19), US and Canadian securities regulators have taken actions and provided guidance to facilitate the public company annual shareholder meeting process and to provide limited relief for public companies unable to meet filing deadlines due to COVID-19.

This alert summarizes these actions and provides practical considerations for public companies dealing with these uncertainties and reporting issues resulting from COVID-19.

US Securities Exchange Commission (SEC) Actions

2020 Annual Meeting Considerations. The COVID-19 outbreak and US efforts to contain the spread, including quarantines, travel restrictions, business/office closings and other social distancing efforts are creating uncertainties and challenges for the upcoming Annual Shareholder Meeting (ASM) season.

The SEC has published guidance to assist with planning for upcoming ASMs (available here). The guidance is to help facilitate the ability of companies to continue to hold their ASMs and to engage with shareholders while complying with the US federal securities laws. Key components of the new guidance include:

Change in Date, Time or Location of ASM. A company which has already filed and mailed its definitive proxy materials can notify its shareholders of a change in the date, time, or location of its ASM without mailing additional soliciting materials or amending its proxy materials if it:

  • issues a press release announcing the change
  • files the announcement as definitive additional soliciting material on EDGAR; and
  • takes all reasonable steps necessary to inform other intermediaries in the proxy process (such as any proxy service provider) and other relevant market participants (such as the appropriate national securities exchanges) of such change.

“Virtual” or “Hybrid” ASMs. If a company plans to conduct a “virtual” or “hybrid” meeting (and is permitted to do so under its state of incorporation laws and governance documents), the SEC expects the company to notify its shareholders, intermediaries in the proxy process and other market participants of such plans in a timely manner and disclose clear directions as to the logistical details of such ASM, including how shareholders can remotely access, participate in, and vote at such ASM. In that regard:

  • If a company has not yet filed and mailed its definitive proxy materials, such disclosures should be included in those materials.
  • If a company has already filed and mailed its definitive proxy materials for a physical meeting and now desires to convert the ASM into a “virtual” or “hybrid” meeting, it does not need to mail additional soliciting materials (including new proxy cards) solely for the purpose of switching to a “virtual” or “hybrid” ASM if it follows the same steps noted above for announcing a change in date, time or location of the ASM.

Shareholder Proposals. In light of the possible difficulties for shareholder proponents to attend ASMs in person and present their proposals, companies are encouraged, to the extent feasible under state law, to provide shareholder proponents or their representatives with the ability to present their proposals through alternative means, such as by phone, during the 2020 proxy season. Additionally, the guidance notes that to the extent a shareholder proponent or representative is not able to attend the ASM and present the proposal due to the inability to travel or other hardships related to COVID-19, the SEC Staff would consider this to be “good cause” under Rule 14a-8(h) for the shareholder proponent or representative to not have been present should a company assert Rule 14a-8(h)(3) failure to appear as a basis to exclude a proposal submitted by the shareholder proponent for any meetings held in the following two calendar years.

The SEC has also granted relief under the proxy rules for companies which need to deliver proxy statements/annual meeting materials in areas affected by COVID-19 (see Order available here). Through April 30, 2020, a company is exempt from the requirement to provide proxy statements or other soliciting materials if:

  • the company’s security holder has a mailing address located in an area where, as a result of COVID-19, the common carrier has suspended delivery service of the type or class customarily used by the company; and
  • the company has made a good faith effort to furnish the soliciting materials to the security holder.

Limited Filing Relief. Earlier this month, the SEC also issued an Order (available here) providing conditional regulatory relief for certain publicly traded company filing obligations under the Exchange Act due to the impact of the COVID-19. Subject to certain conditions, the order provides publicly traded companies with an additional 45 days to file certain disclosure reports that would otherwise have been due between March 1 and April 30, 2020. Filings covered by the order include Forms 10-K, 10-Q, 8-K, and 20-F, and Schedule 13G (but not Schedule 13D or filings under Section 16 of the Exchange Act).

A company may qualify for the relief if it is not able to meet a filing deadline for a covered report or documents due to circumstances related to COVID-19 and satisfies the following additional conditions:

  • The company files with the SEC a Form 8-K or furnishes a Form 6-K, as applicable, by the original filing deadline of the report (for filings due after March 16, 2020, which include Annual Reports on Form 20-F for calendar year foreign private issuers and Annual Reports on Form 10-K for calendar year non-accelerated domestic filers), providing a summary of why the relief is needed in their particular circumstances. Specifically, the report must include:
    • a statement that the company is relying on the Order;
    • a brief description of the reasons why it could not file the report on a timely basis and the estimated date by which the filing is expected to be made;
    • if the reason is due to the inability of someone other than the company to furnish timely a required opinion, report or certificate, an exhibit with a signed statement of that person giving the specific reasons why such opinion, report or certificate cannot be provided to the company by the deadline for the company’s SEC filing; and
    • if appropriate, a risk factor explaining, if material, the impact of COVID-19 on its business.
  • The company files with the SEC the report no later than 45 days after the original due date and discloses in the report that it is relying on the Order and the reasons why it cannot make the filing on a timely basis.

Companies relying on the Order do not need to file a Form 12b-25 with respect to their inability to make a covered filing on a timely basis.

Toronto Stock Exchange and Canadian Securities Regulators’ Actions

In response to recent developments related to COVID-19, the Toronto Stock Exchange (TSX) and Canadian securities regulators have adopted emergency measures, which are expected to continue to evolve over the coming week(s).

Toronto Stock Exchange. The TSX advises applicants and listed issuers to submit all documents to Listed Issuer Services staff electronically until further notice, and to submit electronically any fees associated with their submissions (see announcement here). Applicants and listed issuers may address their questions to their TSX Listed Issuer Services Manager.

Canadian Securities Regulators. The Canadian Securities Administrators (CSA) will provide temporary relief from some regulatory filings required to be made on or before June 1, 2020. The blanket relief will provide a 45-day extension for periodic filings normally required to be made by issuers, investment funds, registrants, certain regulated entities and designated rating organizations on or before June 1, 2020. This will include financial statements, management’s discussion and analysis, management reports of fund performance, annual information forms, technical reports, and certain other filings. Issuers choosing to rely on this exemption and that are complying with the conditions of the relief will not need to file applications for management cease trade orders as they will not be noted in default.

In instances where an exemption is not available, issuers may wish to consider contacting their principal regulator to discuss any potential effect of the current COVID-19 outbreak on their ability to comply with their obligations under securities legislation. Issuers may in certain circumstances consider applying for a management cease-trade order. This restricts certain officers and directors from trading and may be issued by a regulator instead of a failure-to-file cease-trade order.

Some issuers may be considering holding virtual securityholder meetings as a result of social distancing measures. The CSA has confirmed that it will publish guidance on making changes to annual general meetings as soon as possible.

With respect to trading, the CSA Staff are in continuous dialogue with the Investment Industry Regulatory Organization of Canada (IIROC), which has direct oversight responsibilities for trading surveillance.

The CSA will continue to monitor market developments and may issue further guidance in due course.

Additionally, the Ontario Securities Commission (OSC) has announced that on-site compliance reviews of registrants are postponed until further notice. Normal-course registration and compliance activities will continue as planned, and the OSC will be flexible on deadlines for information. The OSC will not be holding in-person hearings until at least April 30, 2020.

The Alberta Securities Commission (ASC) has announced that its offices currently remain open, with a core team fulfilling critical business functions onsite during regular business hours. The ASC encourages all organizations and individuals sharing documents to provide them electronically via email.

What Should Your Company Do Now?

Given the fast changing circumstances resulting from COVID-19, the continuing efforts to limit its spread and the current volatility and impact to business operations, public companies should continue to monitor their operations, filing obligations and engagement with shareholders. It is important to remain flexible and undertake contingency planning with respect to public disclosures, filings deadlines and the conduct of annual shareholder meetings and other shareholder communications.

If your company has its annual shareholder meeting scheduled and has already released the materials but needs to change the date, time or location of the meeting, you should promptly take the actions noted above after making a decision to change one or more of these so that the market is alerted to the change in a timely manner. Also, consider whether your company needs to adjust its annual meeting format (as permitted by your jurisdiction of incorporation and governing documents) after analyzing the typical attendance historically at your meeting and local restrictions, including limitations on size of gatherings, limitations on travel and other social distancing practices. Part of the analysis should include an analysis of your current shareholder base (e.g., large retail shareholder base vs. generally only officers/director in attendance).

If your company has other upcoming filing deadlines, consider potential issues in meeting the filing deadlines, including any requisite third party information, reports, opinions or certifications. If you anticipate any potential issues in filing timely, promptly consult your advisers to determine if any relief may be available and develop contingency plans. The SEC, the TSX and the CSA each continue to monitor the impact of COVID-19 on investors, public companies and the capital markets. Further regulatory action or guidance in relation to the COVID-19 outbreak may be issued by the SEC, the TSX or the CSA as the situation continues to evolve. You should continue to monitor this evolving area and reach out to the Baker McKenzie attorney with whom you work for further guidance.

Additional contributing author, Jennifer Brevelle, Senior Knowledge Lawyer, US Capital Markets.

The post Dealing with COVID-19: What Now for US and Canadian Public Companies? appeared first on Global Compliance News.

Unidentified Ultimate Beneficial Owners: how important is it for organisations to know who they are doing business with?

Ethixbase -

Author: Leas Bachatene Trying to identify the Ultimate Beneficial Owner (or UBO) of a third party can be challenging. Of course, knowing the identity of “The natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted[1]”, should be the

A Personal Tribute to Judge Stanley Sporkin: The Fern Street Crew Gang Prosecution (Part II of II)

Corruption, Crime & Compliance Blog -

My relationship with Judge Sporkin started in the 1990s when I served as an Assistant U.S. Attorney in the District of Columbia.  I prosecuted a number of criminal cases before Judge Sporkin.

In 1996, my colleague, Jim Dinan, and I prosecuted a RICO and Continuing Criminal Enterprise gang case against the “Fern Street Crew,” before Judge Sporkin.  The case involved five defendants who were charged with numerous murders, violent shootings, and cocaine trafficking.  The case was investigated by the FBI’s Safe Streets Task Force and Metropolitan Police Departments, and included evidence from numerous members of the Fern Street Crew, who agreed to plead guilty and testify, and witnesses, victim and undercover drug transactions. 

From the beginning Judge Sporkin approached the case fairly and with proper regard for the safety of jurors and witnesses, while protecting the defendants’ rights to a fair trial.   Given the threat of extra-judicial killing of witnesses and their families, Judge Sporkin authorized the use of an anonymous jury for the trial.

Following a lengthy trial, the defendants were convicted of numerous offenses, including murder, armed robbery, kidnapping and drug and RICO conspiracies.  Each of the defendants was ultimately sentenced to life in prison.  The defendants’ appeals were quickly rejected by the D.C. Circuit.  This last point was especially important to Judge Sporkin because it confirmed to him that he had conducted a fair trial, free from significant error.  He was right.

The trial included some chilling moments of courtroom drama, which Judge Sporkin always recounted to me in later years.  These events had left an incredible mark on Judge Sporkin (as they had on me).

An early witness who testified as a community leader from the Fern Street Area (near Georgia Avenue and Silver Spring) who initially complained to the US Attorney’s Office of rampant gang violence in their neighborhood.  The community leader, in the presence of the defendants recounted the frustration and fear of community members who wanted law enforcement to investigate and prosecute members of the Fern Street Crew.  Judge Sporkin always admired the  courage of this community leader to testify in a secure courtroom about the community group’s legitimate concerns.

A second dramatic incident involved the attempted murder of a rival gang member, who was tricked into coming to a female Fern Street Crew member’s apartment to have sex.  When the rival gang member arrived, he was kidnapped at gun point by members of the Fern Street Crew, stripped naked and thrown into the back of a van.  The Fern Street Crew members drove the rival gang member to the nearby woods, and forced the rival gang member to kneel down naked on the ground.  A Fern Street Crew member put a gun to the rival gang member’s head and told him “You are going to die now,” and shot the rival gang member in the head.

Two hours later, the rival gang member woke up, crawled out of the woods, was rescued by a civilian driving through the area, and then transported by helicopter to a hospital.  The victim survived.

Five years later, the victim walked into the courtroom and testified against the Fern Street Crew before Judge Sporkin.  As he testified, the jury was mesmerized.  Judge Sporkin leaned back in his chair, with his eyes closed, but attentively listened.  The victim did not know the shooter and had never been asked to identify him.  The victim then identified the shooter (who was wearing glasses in the courtroom).  Judge Sporkin never forgot this testimony.

The third dramatic event involved an attack on the girlfriend of a Fern Street Crew member.  The gang member was castigated as “weak” because he had developed a “problem” by smoking crack cocaine.  To punish him, two other Fern Street Crew members decided to attack the girlfriend of the drug user, gang member. 

The two gang members knocked on the girlfriend’s door, charged into her apartment when she opened the door and threw the girlfriend on her bed.  The girlfriend had a six-month old baby who was lying underneath the girlfriend’s body on the bed.  The crew members wrapped the girlfriend’s legs together with a long telephone cord, attempted to smother her with a pillow and then tried to rape the girlfriend while she was lying on top of her baby.  The baby was crying.  One the gang members decided to warm up a bottle of milk and feed the baby while the other gang member continued to try and rape the girlfriend despite having her legs tied together.

The girlfriend, who had no involvement in the gang’s activities, was a religious woman from southern Virginia.  Before testifying about these events, she prayed and asked me to do so.  I prayed with her.

The Fern Street Crew jury was comprised of all women, and was legendary in the US Courthouse as one of the most professional and impressive juries to be selected in history (up to that point).  Suffice it to say, when the girlfriend/victim testified about the events described above, several jurors cried.  The victim testified and maintained her composure except for brief moments when she cried.  She courageously identified the two defendants responsible for the attack.  The jury sat on the edges of their respective chairs.  Judge Sporkin leaned over the bench, staring at the two defendants identified, and with a glare looked at them with disgust.

For years, Judge Sporkin would recall these moments from the trial.  He repeatedly urged me to write a book with him, claiming to title it, “How We Saved the Fern Street Neighborhood.”  I always agreed.  Judge Sporkin was proud of the way in which he handled this difficult trial, and he had every right to be proud.  Out of all the complex gang cases prosecuted in the US District Court for the District of Columbia, Judge Sporkin’s handling of this case stood out as one of his finest moments.

The post A Personal Tribute to Judge Stanley Sporkin: The Fern Street Crew Gang Prosecution (Part II of II) appeared first on Corruption, Crime & Compliance.

NAVEX Global Releases 2020 Ethics & Compliance Hotline Benchmark Report

Corporate Compliance Insights -

Case closure times jump, harassment reports decline; the findings, based on data from 1.4 million reports, cover the second full year since the beginning of the #MeToo era Portland, OR (April 7, 2020) – Leading integrated risk and compliance management software company NAVEX Global announced the release of its 2020 Ethics & Compliance Hotline Benchmark […] The post NAVEX Global Releases 2020 Ethics & Compliance Hotline Benchmark Report appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

LRN Corporation to Moderate Webinar Discussion on How Organizations are Responding to COVID-19

Corporate Compliance Insights -

An expert panel at 12 p.m. ET on Thursday, April 16, will feature insights from ethics and compliance leaders and executives on how their companies are dealing with the pandemic  NEW YORK, NY (April 6,2022) — LRN Corporation’s Ben DiPietro will moderate a webinar discussion featuring ethics and compliance leaders that will explore how organizations are […] The post LRN Corporation to Moderate Webinar Discussion on How Organizations are Responding to COVID-19 appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

Should I Stay or Should I Close? COVID-19 Issues Across US Jurisdictions

Global Compliance News -

The growing COVID-19 crisis has led to an increasing number of states, counties and cities requesting or demanding that businesses close and people remain in place. That list grows by the day, and presents a challenge to businesses operating in multiple states. The article below summarizes some of the key questions for businesses considering a closure order and evaluating their response.

Where have closures been required?

In short, nearly everywhere. States, counties and cities nationwide have announced various levels of business closures. New York, Connecticut, New Jersey, Illinois, North Carolina, Pennsylvania, Ohio, Massachusetts, Washington and Michigan have ordered or issued statewide guidance regarding closures. Florida Governor Ron DeSantis has also indicated a similar executive order is likely forthcoming. Cities in Texas, including Austin, Dallas and Houston, as well as the counties they reside in, have also ordered closures, while Texas Governor Greg Abbott has indicated a statewide order is unlikely. The City of Philadelphia has issued its own closure guidance, despite the statewide guidance issued the same day. Seven counties in the Bay Area, including San Francisco, have issued shelter-in-place orders resulting in broader closures.

(For more on this, click to read a recent client alert issued by Baker McKenzie’s Employment and Compensation Group: Shelter-In-Place Orders Take Effect In The San Francisco Bay Area.)

What is required to close?

Generally speaking, businesses that are not considered essential. Restaurants and bars (including night clubs, microbreweries, distilleries and wineries) have been targeted by nearly every closure order. Orders in Los Angeles, the Bay Area, Denver, Houston, Austin, Dallas, Illinois, New York, New Jersey and Pennsylvania, among others, have closed dining rooms and limited food services to delivery, drive-thru or take-out. Gyms, fitness centers, movie theaters, performance venues, sporting events and entertainment centers have also been subjected to closure.

Some cities have closed businesses or facilities based on the amount of people they may attract. For example, the City of Austin and Travis County have banned any gatherings of 10 or more people, whether public or private, in a single space. Illinois, New York, New Jersey and Connecticut have similarly banned gatherings of 50 or more people. This approach typically excludes office buildings, schools or hotels, because people may gather in separate rooms within a building in groups of less than 10 or 50.

These orders have exempted “essential” businesses, such as grocery stores, pharmacies, hospitals and medical providers, as well as critical infrastructure operators (such as water, internet, airports, etc.) and infrastructure construction projects (highways, housing, etc.). These exempt categories have generally been broadly construed – Austin considers anything selling food products and household staples to be a grocery store; San Francisco’s definition includes farmer’s markets, convenience stores, and any establishment carrying pet supplies, fresh meat and produce, or household consumer goods such as cleaning and personal care products. Philadelphia includes stores focused on technology that could enable working from home, such as computers, telecommunications and other electronics.

The “shelter-in-place” order from the Bay Area counties allows for people to leave their homes only to operate “essential businesses,” resulting in possibly the most widespread closures in the nation for companies that cannot operate remotely. These “essential businesses” include those businesses listed above, as well as media service providers, gas stations, auto-supply or repair facilities, banks and related financial institutions, hardware stores, mailing and shipping providers, laundromats and dry cleaners, and businesses that provide supplies for people working from home. Pharmaceutical and biotechnology companies, private transportation providers for a designated list of “essential” activities, and plumbers, electricians and exterminators are also exempt. Additionally, businesses that supply any of these essential businesses with support or supplies are also considered essential, which is a potentially broad classification.

What modifications are in place for businesses that remain open? Many of these orders encourage employers to allow their employees to work from home if feasible. They also uniformly encourage or require social distancing – the Illinois order, for example, requires that establishments offering food or beverage for pick up must provide enough space for patrons to adequately practice social distancing, although it does not define a specific perimeter. New York City’s order requires that restaurants may not exceed 50% of their occupancy or seating capacity while offering pick-up. In Los Angeles County, patrons picking up take-out must stand six feet apart. How long do the closings last? Closures range from the end of March at the earliest, all the way through mid-May at the longest. Los Angeles, Houston and Illinois have set their closures to expire on either March 30 or 31, 2020. The Bay Area’s shelter-in-place order expires a week later on April 7, 2020. Austin’s order extends through May 1, 2020, and Denver’s restaurant and bar closure extends through May 11, 2020. Others, including Dallas and New York City, are indefinite. Nearly all of the orders recognize it is difficult to predict their duration at this time. How are negative effects on employees being addressed?

The House passed the Families First Coronavirus Response Act on March 14. If passed by the Senate and signed by President Trump, employees who miss work because of COVID-19 would be eligible for two weeks of paid sick leave at 100% of their normal salary, up to USD 511 per day. Employees who lose child care due to school or day-care closures would also be eligible for an additional 10 weeks of paid family and medical leave at 67% of their normal pay, up to USD 200 per day. The Act would apply to companies under 500 employees, and those with less than 50 could apply for an exemption from the Department of Labor. The bill also calls for both a tax credit and direct reimbursement for employers to help offset these costs.

For more employment law-related COVID-19 resources, see Baker McKenzie’s Coronavirus Resource Center, which includes alerts focusing on employment compensation issues in the US and internationally.

What is the authority for this, and what happens if a business does not comply?

These orders typically take the form of an Executive Order from a Mayor or Governor, although the issuing authority differs between municipalities and counties. For example, in Harris County, the County Judge issued the order; in San Francisco, it was the Health Officer. Some cite emergency powers bestowed by state statutes or local administrative codes. Others find authority in state or local health regulations. In Texas, Austin cites Texas Government Code Chapter 418 – Emergency Management. Dallas relies on provisions in the Dallas City Code that allow the City Manager to promulgate regulations whenever a disaster order or proclamation is issued.

Many of these orders also set forth misdemeanor penalties for non-compliance, typically resulting in a fine not to exceed USD 1,000 and 90 to 180 days of imprisonment. Cities and states have differing views on enforcement, however: law enforcement officials in the Bay Area have expressed a hope that enforcement of the shelter-in-place order will not be necessary, although a larger police presence is expected in San Francisco. In New York City, on the other hand, Mayor Bill de Blasio has threatened arrests for non-compliance. Pennsylvania’s governor noted in his statewide order that he does not intend at this time to devote state resources to enforcement, but rather expects businesses to comply voluntarily and will rely on local or county enforcement authorities.

How do I get more information? The COVID-19 situation has placed businesses, employees, and the general public around the world in an unprecedented situation. To add further complexity, that situation changes on a daily basis. For more guidance, please contact your Baker McKenzie lawyer or visit our Coronavirus Resource Center, which collects guidance on these issues from experts across the globe.

The post Should I Stay or Should I Close? COVID-19 Issues Across US Jurisdictions appeared first on Global Compliance News.

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Supply chain disruptions resulting from the coronavirus have brought countless international corporations low. Hitendra Chaturvedi, a professor of supply chain management, discusses what may come from these significant disruptions. The coronavirus has disrupted U.S. companies in many ways, and nearly three-fourths of them have seen their supply chain significantly affected. While China has begun slowly reopening […] The post How Companies Can Rethink Supply Chains To Deal With Disruptions appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

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From augmented analytics to financial transformations and a broader view of risk, Oversight Systems CEO Terrance McCrossan offers predictions on the risk trends we can look for in the months ahead. At the beginning of 2020, we could not have imagined our world gripped by a pandemic with far-reaching effects into our lives and economies. […] The post 3 Ways AI May Impact Risk in 2020 appeared first on Corporate Compliance Insights.

(This is only a summary. Click on the headline to view the entire article at Corporate Compliance Insights and participate in the discussion.)

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