An important aspect of the compliance practitioner’s duties is an evaluation of a proposed third-party relationship during the due diligence process. It is mandatory that all red flags be cleared, and there must also be evidence of the decision-making process to provide if a regulator comes knocking. The Justice Department’s “Evaluation of Corporate Compliance Program” discusses under Prong 10: “Real Actions and Consequences – Were red flags identified from the due diligence of the third parties involved in the misconduct, and how were they resolved?”
