In the world in which The Man From FCPA grew up there was a well-worn phrase “It’s not what the cockroach eats, it is what it spoils.” That adage was applied to college football, usually when a very small underdog school would defeat a much larger and favored opponent. Now the cockroach has a new advocate, Warren Buffet, who said on the CNBC program Squawk Alley, “What you find is there’s never just one cockroach in the kitchen when you start looking around.”
And for Wells Fargo the cockroaches just keep on coming out. As reports have noted, there was the original scandal for which the bank paid out some $185 million in fines that resulted from bankers opening (and then closing) millions of unauthorized accounts to meet sales goals, with the hope of getting bigger bonuses. This first scandal was thought to have effected some 2.1 million accounts from 2011 to 2015. Unfortunately for the bank, it disclosed last month “that as many as 3.5 million unauthorized customer accounts, dating to 2009, had been opened—early 70 percent more than originally announced.”
The Wells Fargo saga may well be adding a new phrase to the bribery and corruption lexicon, beyond even Warren Buffet’s cockroaches. In the FCPA world, the most dreaded question during an enforcement action is “where else?”—as in, where else are you engaging in bribery and corruption? After Wells Fargo, the lexicon may well expand to “what else?”—as in what other conduct is your company engaging in that is unethical?
Yet, within this word play is the serious lesson that you must move aggressively to investigation as thoroughly as possible. Of course, having robust internal controls would not only help to detect, if not prevent such nefarious conduct. If you did not have a handle on how you are doing business on the front end, it may swat you on the back end.
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