Category Archives: Latest Firm News

Compliance Week Examines Maurice E. Stucke’s Recent Research on Compliance Programs

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Compliance Week’s review of the latest working paper by GeyerGorey’s Maurice Stucke affirms the nagging doubts commonly shared by compliance officers and inside counsel alike about the effectiveness of their compliance programs.

FOR IMMEDIATE RELEASE

PRLog (Press Release) – Jan. 22, 2014 – WASHINGTON, D.C. — “An eye-opening academic paper.” That was the response to Maurice E. Stucke’s latest working paper, In Search of Effective Ethics & Compliance Programs, which Compliance Week reviewed recently.

As Professor Stucke explains, the U.S. Sentencing Commission’s Organizational Guidelines for over twenty years have offered firms a significant financial incentive to develop an ethical organizational culture. Nonetheless, corporate crime persists. Too many ethics programs remain ineffective. As his article argues, the Guidelines’ current approach is not working. The evidence, which includes sentencing data over the past twenty years, reveals that few firms have effective ethics and compliance programs. Nor is there much hope that the Guidelines’ incentives will induce companies, after the economic crisis, to become more ethical.

The problem is not compliance per se. The empirical research, while still developing, suggests that compliance efforts can be effective, and that effective compliance is attainable for many companies. The problem, Professor Stucke identifies, is attributable to an extrinsic, incentive-based approach to compliance, which does not cure, and likely contributes to, the problem of ineffective compliance.

In his article, What You Believe About Effective Compliance, And What Works, Matt Kelly summarizes Prof. Stucke’s piece,

Good news for chief compliance officers frustrated with the effectiveness of your compliance program, or the lack thereof: you are correct to feel that way.

That’s the conclusion of an eye-opening academic paper, “In Search of Effective Ethics & Compliance Programs,” published last month by University of Tennessee law professor Maurice Stucke. If you ever wanted to confirm that nagging feeling you have that maybe our approach to building compliance programs and deeming them effective isn’t quite right, read this 88-page paper immediately.

Professor Stucke is part of GeyerGorey’s compliance team, which blends its experience in enforcement, in-house counseling, criminal and civil defense, and qui tam litigation, to help companies efficiently identify, address, and mitigate litigation risks from the onset and develop an organizational culture that encourages ethical conduct and a commitment to comply with the law.

Compliance Week:What You Believe About Effective Compliance, And What Works

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Compliance Week focuses on Maurice E Stucke’s “In Search of Effective Ethics and Compliance Programs

“Stucke’s premise is that our current compliance ecosystem—regulators,
prosecutors, boards, CEOs, compliance officers—is extrinsic in nature,
imposing compliance demands upon Corporate America from the outside, with the
threat of punishment if your program is ineffective. The problem? The
assumptions behind an extrinsic system don’t hold up in the real world. So
companies end up seeking to invest the least amount necessary, to satisfy the
smallest number of compliance obligations possible, leaving employees still
tempted to commit misconduct. Lovely…”.

GeyerGorey partner Allen Grunes quoted by Reuters: Ireland’s Ardagh in talks with FTC to settle glass bottle merger challenge

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GeyerGorey partner Allen Grunes quoted by Reuters:  Ireland’s Ardagh in talks with FTC to settle glass bottle merger challenge

In Search of Effective Ethics & Compliance Programs; By Professor Maurice Stucke, GeyerGorey LLP

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Maurice E. Stucke

University of Tennessee College of Law
December 10, 2013


Abstract: 

The U.S. Sentencing Commission’s Organizational Guidelines for over twenty years have offered firms a significant financial incentive to develop an ethical organizational culture. Nonetheless, corporate crime persists. Too many ethics programs remain ineffective.As this Article explores, the Guidelines’ current approach is not working. The evidence, including sentencing data over the past twenty years, reveals that few firms have effective ethics and compliance programs. Nor is there much hope that the Guidelines’ incentive will induce companies, after the economic crisis, to become more ethical.The problem is not attributable to several assumptions underlying the Guidelines. The empirical research, while still developing, suggests that compliance efforts can be effective, and that effective compliance is attainable. Instead, this Article explores how the Guidelines’ extrinsic, incentive-based approach to compliance does not cure, and likely contributes to, the problem.

 

 

How the FTC’s Hertz Antitrust Fix Went Flat – Professor Maurice Stucke; WSJ.com

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How the FTC’s Hertz Antitrust Fix Went Flat
Wall Street Journal
December 8, 2013

Maurice Stucke, a University of Tennessee professor and lawyer with GeyerGorey LLP, said the latest Advantage bankruptcy ought to prompt some soul-searching by the FTC and the Justice Department.

If merger settlements “are going to be business as usual, the agencies need to spend more time examining how their remedies work out over the long haul,” he said. “You would think there could be more safeguards to prevent this from happening.”

Cayman Islands and Costa Rica agree to share bank account details with US

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GeyerGorey LLP is well versed in international tax issues, tax compliance, tax whistleblower issues and mandatory and voluntary disclosure issues.  With reciprocity agreements increasing between the United States and a host of nations, it is best to be proactive.

Cayman Islands and Costa Rica agree to share bank account details with US

Hertz Fix in Dollar Thrifty Deal Fails as Insider Warned

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Hertz Fix in Dollar Thrifty Deal Fails as Insider Warned
Bloomberg News

“‘What a screw-up,’ said Allen Grunes, an antitrust lawyer at GeyerGorey LLP in Washington who wasn’t involved in the matter. “It’s a huge embarrassment that it happened this quickly.”

The bankruptcy of Advantage shows how hard it is to recreate competition after mergers in concentrated markets, said Grunes, a former attorney with the Justice Department’s antitrust division.”

Phillip Zane reprises his class on antitrust and unfair competition for the Ethics & Compliance Officer Association.

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GeyerGorey attorney Phillip Zane will reprise his class on antitrust and unfair competition which he has taught since 2009 as part of the U.S. Law Course (formerly the ECOA Law School) of the Ethics & Compliance Officer Association.  The ECOA is an association of individuals who are responsible for the ethics and compliance programs of their organizations. It is the largest such organization in the world.  The U.S. Law Course is a seven-week program covering a wide range of legal topics designed to teach legal concepts and methods of analysis to non-lawyers who serve as ethics and compliance officers and to lawyers as a refresher in areas likely to give rise to compliance issues.  The course repeats several times each year. For more information on this course or to register for a future course, please visit the ECOA’s website www.theecoa.org or http://www.theecoa.org/imis15/ECOAPublic/EVENTS/ECOA_Law_School/ECOAPublic/EventContent/EventPages/ECOA_Law_School.aspx?hkey=ab1ded3b-cd77-49bd-95f7-bf4df4bd70c5.

Mr. Zane brings to the course his experience in investigating alleged international cartels and defending companies and individuals accused of antitrust violations and other financial crimes. He mixes fundamental skills, tools for sophisticated analysis and problem solving, and the U.S.government’s own surveillance tapes of a price-fixing conspiracy into a unique presentation on antitrust and business torts.

Mr. Zane focuses his practice on government investigations, and criminal litigation and appeals, especially in matters relating to antitrust and trade regulation. He handles the full range of antitrust litigation and counseling.

DOJ backs antitrust leniency program; attorneys oppose expansion of compliance efforts

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DoJ backs antitrust leniency program; attorneys oppose expansion of compliance efforts PaRR

The US Department of Justice (DoJ) criminal antitrust leniency program is working well and should not be supplemented or replaced by an expansion of a program that would give sentencing credit for violators that have price-fixing compliance programs, DoJ officials and antitrust attorneys said.

“Antitrust compliance programs are only as good as the buy-in from the top,” an antitrust attorney with extensive experience at the DoJ told PaRR.

A DoJ spokesperson said that while the Antitrust Division does have a compliance credit program, it is not used often because of the number of company executives usually implicated in a price-fixing probe. “The sentencing guidelines provide that, when high-level personnel at the company participated in the cartel conduct, credit is not to be given for compliance programs,” the spokesperson said. The spokesperson said that in most cases “high-level or substantial authority personnel” are involved in any price-fixing scheme.

However, a long-time compliance officer told PaRR that the Antitrust Division should adopt an approach similar to how the DoJ’s Criminal Division enforces the Foreign Corrupt Practices Act (FCPA).

“In the anti-corruption field, they’re focused on prevention,” Joseph Murphy, an attorney with the Compliance Systems Legal Group, told PaRR. “They don’t just want to prosecute it, they want to prevent it.”

Murphy recently publicly questioned whether the DoJ’s prosecution of auto parts companies has been the success that many have said it is, adding that the cartels existed for many years before being discovered.

And even then, the conspiracy was only discovered when a company sought leniency in exchange for providing information about price-fixing. The auto parts investigation has prompted a renewed discussion of compliance programs among attorneys.

In the FCPA realm, DoJ officials push companies to operate extensive anti-bribery compliance programs in order that they may be given a more lenient sentence. Business groups have been pushing for the FCPA to be amended to allow companies to use compliance programs as a defense as the DoJ decides whether to prosecute a company or its employees.

The DoJ and the Securities and Exchange Commission last year issued extensive guidance on the FCPA that describes the hallmarks of an effective compliance program.

A second antitrust attorney with DoJ experience agreed that the Antitrust Division should expand efforts to push companies to develop compliance programs to help prevent price-fixing.

“I agree that the Antitrust Division could do a lot more to incentivize companies to have effective compliance programs,” said a second antitrust attorney with DoJ experience.

But another antitrust attorney said that expanding efforts to require extensive compliance programs would not be effective. “It’s probably true that [antitrust] prosecutors do not place as much emphasis on compliance regimes as do FCPA prosecutors, but I think the criticism is misguided,” said Hays Gorey, an attorney with GuyerGorey and a former DoJ attorney in the Antitrust and Criminal Divisions. However, he added that, “I would not be in favor of layering new compliance obligations on firms generally just because some violate the law.”

Gorey said the antitrust leniency program has achieved its goals. “The leniency program, by almost all measures, has been an enormous success leading to the discovery of vast conspiracies and the prosecution of large numbers of individuals and companies who violate the law,” he said.

And the first antitrust attorney said there would be a “tremendous outcry” if officials of a company that overcharged customers millions of dollars as a result of a price-fixing scheme received a much lighter sentence simply because it had a compliance program.

by David Baumann in Washington DC

AAI Event with Susan Crawford, Allen Grunes, Bert Foer and Don Resnikoff discussing telecom competition (November 22, 2013)

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The American Antitrust Institute, in cooperation with co-sponsor Antitrust and Consumer Law Section of the District of Columbia Bar, presents Susan Crawford discusses telecom competition and her book Captive Audience with Bert Foer, Allen Grunes, and Don Resnikoff

Event Details:

  • Friday, November 22, 12:15 to 1:15 PM
  • Register by sending an email to programinfodonresnikofflaw@mail.com
  • Call in information for the teleconference will be e-mailed to you.
  • There is no charge.

About Susan Crawford:
Susan Crawford is a professor at the Benjamin N. Cardozo School of Law, a fellow at the Roosevelt Institute, and a co-director of the Berkman Center. She is the author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, and a contributor to Bloomberg View and Wired. Don Resnikoff’s review of Captive Audience is available here. An excerpt from the review is at the end of this notice.

The American Antitrust Institute, in cooperation with co-sponsor Antitrust and Consumer Law Section of the District of Columbia Bar, presents
Susan Crawford discusses telecom competition and her book Captive
Audience with Bert Foer, Allen Grunes, and Don Resnikoff

About Bert Foer:
Albert A. (“Bert”) Foer is President and Founder of the American Antitrust Institute. His career has included private law practice in Washington, DC); the Federal Senior Executive Service (as Assistant Director and Acting Deputy Director of the Federal Trade Commission’s Bureau of Competition). He has published numerous articles, book chapters, and reviews relating to competition policy.

About Allen Grunes:
Allen Grunes is a member of AAI’s Advisory Board. He is a partner at GeyerGorey LLP, a firm started one year ago by three former DOJ Antitrust Division lawyers. Allen spent more than a decade at the Antitrust Division, where he led many merger and civil nonmerger investigations in radio, television, newspapers, motion pictures, and other industries. He and fellow AAI Advisory Board member Maurice Stucke have coauthored several articles on media and telecom, including “Antitrust and the Marketplace of Ideas” (Antitrust Law Journal), “Antitrust Analysis of the AT&T/T-Mobile Transaction” (Federal Communications Law Journal) and “Why More Antitrust Immunity for the Media is a Bad Idea” (Northwestern Law Review). His practice includes advising clients on mergers and acquisitions, providing counseling on non-merger matters, and representing clients in federal court, before the federal antitrust agencies and before Congress. His extensive experience includes media and entertainment, telecommunications, and the high-tech sector. He was named as a “Washington D.C. Super Lawyer” for 2013. 

About Don Resnikoff:
Don Resnikoff is a member of AAI’s Advisory Board, and the organizer of this program. He is currently in private practice in the District of Columbia. He previously was a Senior Assistant Attorney General for the District of Columbia. Before that he served for more than twenty years as an antitrust litigator with the Antitrust Division, United States Department of Justice. His experience also includes private practice corporate litigation as a partner with a New York City firm, recent Of Counsel experience, and service as an Assistant United States Attorney in New Jersey.

From the Resnikoff Review of “Captive Audience:”
Susan Crawford’s bottom-line observations are straightforward: For internet service customers, there are only a few companies from which to buy. Of those, a small number of large companies provide internet service by a cabled wire or fiber-optic connection. Comcast is the most important. Comcast and other cable companies each dominate large geographic regions with little competition. Each can raise prices for fast internet access without significant constraints.

A small number of large companies provides internet service using wireless radio technology instead of cabled wire or fiber-optic connections. Wireless internet access is dominated by AT&T and Verizon. Crawford explains that wireless internet transmission is in a separate market from wired because
wireless transmission of digital signals is too slow to compete with internet service delivered by wire or fiber-optic cable. The wired and wireless products are complementary, not competitive.

To make matters worse, government approval of the Comcast merger with content provider NBC Universal has reinforced a situation where cable companies that dominate distribution of digital signals also control important content. The consequence is that Comcast, the largest high-speed internet distribution company, is in a position to throttle independent providers of television content such as movies and sports.