This year’s SCCE Conference in D.C. was no different. We heard from representatives from the Sentencing Commission, the SEC, the DOJ and others. Everyone talked of partnership, but the elephant in the room was the fact that a compliance professional must wage some pretty heavy battles in their own head when faced with a rule violation in their business that has been uncovered:
- “Self-reporting will certainly bring some form of investigation.”
- “Isn’t it the job of the Compliance Officer to keep their business from falling under the eye of regulators?”
- “Will I lose my job if I make the call?”
This is a decision that no Compliance Officer should make on their own and requires input from the highest levels of the executive ranks. Inevitably, there will be a Compliance Officer who is directed not to report by their executives. Now what? Does that Compliance Officer go against the direction from above, even when they know that self-reporting will actually protect the long term interests of their company?
The good news is that there is real evidence that self-reporting will bring a softer touch from regulators. Look no further than the non-prosecution agreement between Ralph Lauren and the SEC. Based on the internal actions taken at Ralph Lauren once they discovered an FCPA violation, the SEC levied a fine but did not impose any form of monitoring or program enforcement. One of the keys in this particular case was that Ralph Lauren had done just about everything right in their internal investigation of the FCPA violation.
The Ralph Lauren case is a great example of what a Compliance Officer facing the pressure to not report can provide to their executive team as validation of self-reporting. Maybe there is some truth to this whole public/private partnership thing.