Corruption Crime & Compliance

Hiring someone to investigate misconduct isn’t always going to save your board. The line between bad management and bad faith just got real.Here’s a question every board member should be losing sleep over: when does a board’s failure to catch corporate misconduct cross the line from bad management into an actual breach of fiduciary duty?Delaware just gave us two new answers, and they cut in different directions.First, Teligent, a pharma company, an FDA compliance meltdown, and a court that let claims proceed against directors and two officers because the complaint showed information and mounting regulatory problems never made it to the people who could act on it.Second, Regions Financial case. A whistleblower sent the board a complaint about allegedly illegal overdraft fee practices back in 2019.The board hired an investigator. Good so far, but the company didn’t stop the practices until 2021, and a $191 million CFPB consent order was imposed.Delaware let the claims proceed here too.Here’s the lesson from both: escalation isn’t enough. Investigating isn’t enough. The board has to actually understand what it found and actually fix it.Stay tuned. Tomorrow I’ll tell you about the case that shows the other side of this coin.The Ethics and Compliance Q and A show is produced by One Stone Creative.

In this episode of Corruption, Crime and Compliance, Michael Volkov breaks down why the EU AI Act has moved from a future planning exercise to an actively enforced regulatory regime, with the European Commission's AI Office holding full investigative and fining authority since August 2026, having already opened its first formal investigations in June 2026 into hiring tools, credit scoring systems, and student monitoring applications. He walks through the Act's fragmented compliance timeline, prohibited practices enforceable since February 2025, general-purpose AI obligations running since August 2025, and live chatbot transparency requirements, alongside the significant deadline relief the Digital Omnibus gave specifically to high-risk AI systems, pushed to December 2027. The episode closes with a clear warning: companies that read the Digital Omnibus as a blanket delay of the entire AI Act are making a costly mistake, since the tracks carrying real, current enforcement exposure, including fines up to 7 percent of global turnover, remain fully active today.

Has OFAC branded your company with the scarlet letter?Getting removed from the SDN list is possible, but it’s not fast, it’s not easy, and it’s not guaranteed.The primary path is a petition for administrative reconsideration filed with OFAC, arguing mistaken identity, changed circumstances, or that the original factual basis was simply wrong.You must prove it with real documented evidence.OFAC is skeptical of cosmetic restructurings designed to look like change while control remains the same.Practically, petitions can take many months to over a year, and you’re often arguing against evidence you’ll never fully see, since designations can rest on classified information.If OFAC denies or ignores your petition, you can challenge it in federal court, but courts defer heavily to the executive on sanctions, so litigation is a last resort, not a strategy.If you’re designated, get experienced OFAC counsel immediately, do a real internal investigation, build your remediation story, and manage expectations. It takes time.The best strategy is never needing this. Build a sanctions program rigorous enough that you never end up on the list at all.The Ethics and Compliance Q and A show is produced by One Stone Creative.

In this episode of Corruption, Crime and Compliance, Michael Volkov examines how Delaware's Caremark doctrine has matured through a recent run of decisions involving Teligent, Regions Financial, and Boeing, all centered on the question of when a board's failure to prevent corporate misconduct crosses from ordinary mismanagement into an actual breach of the duty of loyalty. He walks through Teligent's officer-level oversight failures in FDA compliance, Regions Financial's lesson that a whistleblower investigation without genuine follow-through and remediation doesn't satisfy Caremark's good-faith standard, and the pivotal 2026 Boeing dismissal, where extensive board and committee engagement on safety protected directors even after another serious incident. The episode closes with practical guidance for compliance officers on identifying mission-critical risks, building real escalation and follow-up procedures, and documenting board oversight, since Caremark, as these cases confirm, does not demand perfection, only a good-faith effort to oversee the risks that genuinely matter.

Are you rubbing elbows with criminals?When OFAC designates someone a specially designated national, or SDN, it’s not a warning label. It’s a legal wall.Every asset that party has anywhere in U.S. jurisdiction, or in the hands of a U.S. person, is frozen. Every U.S. person is barred from transacting with them, directly or indirectly.The trap is OFAC’s 50% rule, which means any entity owned 50% or more in aggregate by blocked persons is automatically blocked too, even if it never appears on the published list.A clean name screen doesn’t mean a clean counterparty if you haven’t traced the ownership behind it.Enforcement is ratcheting up hard right now: Iran-related designations, cartel terrorism, Russia sanctions and evasion networks. The stakes are real - civil penalties in the tens of millions, frozen wires, correspondent banking risk, and secondary sanctions that can cut even non-U.S. companies off from the dollar system entirely.Sanctions screening can’t be a one-time check-the-box exercise.You need ongoing, ownership-aware screening that re-screens existing counterparties as the list evolves and actually traces beneficial ownership, not just the name on the contract.The Ethics and Compliance Q and A show is produced by One Stone Creative.