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The world isn't simple anymore, and on the Walden Pond podcast, your host anti-fraud expert Vincent Walden, CEO of Kona AI and CFE of the Year, 2022, is talking to experts about the technology and compliance trends you need to know about to keep your compliance and fraud detection programs relevant. If you're looking for insights that are practical, timely and innovative... Welcome to the Pond.
42 Episodes
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Host Vincent Walden goes solo as he shares his story of changing careers and discusses the direction he plans to take his new company in. Vincent is using his 20+ years as a legal, compliance and investigation technology innovation expert to lead Kona AI as its new CEO. Kona AI is the most innovative, AI-driven, cost effective and easy-to-use compliance and anti-fraud technology solution to mid and large companies on the market.
In the last months of his role as Managing Director at Alvarez & Marsal, he came to the realization that the Kona AI platform, which they had been using to help companies find improper payments, needed to be scaled. Now, he and his colleague Matt Galvin are collaborating with MIT to build an algorithm-sharing consortium of leading companies.
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To learn more, and contact Vincent Walden, please visit Kona AI
Andi McNeal is Vice President of Research with the Association of Certified Fraud Examiners, a membership association serving more than 90,000 anti-fraud professionals globally. As a CFE, she specializes in fraud prevention, detection and investigation, education and training, research and analysis, corporate culture and leadership, and association management. Andi discusses the ACFE’s 2022 Report to the Nations and its insights on occupational fraud. Download the report here!
The ACFE’s study focuses on occupational fraud, Andi shares. They were not attempting to get a snapshot of every type of fraud that occurs - only cases perpetrated by employees against the organizations they worked for, specifically between 2020 and 2021. In the 2100 cases they observed, over $3.6 billion was calculated in losses, which is just a small portion of the fraud committed globally. Fraud isn’t an accounting problem, it’s a human problem.
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Andi McNeal on LinkedIn
To learn more, and contact Vincent Walden, please visit Alvarez and Marsal
Marta Cadavid is co-founder and CEO at NoFraud, an organization dedicated to fighting fraud by using technology to anticipate criminal behavior. NoFraud specializes in forensic audit, cybersecurity, and investigations of economic crimes. As a Certified Anti-Money Laundering Specialist (CAMS), Certified Fraud Examiner (CFE), AML Anti-Money Laundering Certified Associate (AMLCA), Marta possesses valuable experience that sets her a cut above the rest. She is also Consultant and International Coach of Auditool. Marta discusses how fraud triangle theory can be used to improve fraud detection.
Fraud, corruption, waste, corporate abuse and other misbehaviors destroy an organization’s value. They are the silent enemy that kills companies, Marta shares. This enemy was the driving force behind the conception of NoFraud; their goal was to be one step ahead of these misbehaviors. They now help corporations build value through the prediction, prevention, and detection of undesirable conduct at the workplace.
According to Marta’s research, 15-25% of people are never involved in unethical actions. Unfortunately, the larger percentage of people are prone to behaving according to the moment. NoFraud combines fraud triangle theory with artificial intelligence, data analytics and semantics to monitor patterns of keystrokes or communications from an individual.
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Marta Cadavid on LinkedIn
Email: marta.cadavid.a@gmail.com
NoFraud.la | MartaCadavid.com
To learn more, and contact Vincent Walden, please visit Alvarez and Marsal
Margot Cella is a research and public policy analyst, and Vice President of Research and Anti-Fraud Initiatives at the Center for Audit Quality (CAQ). The CAQ is dedicated to enhancing investor confidence and public trust in the global capital markets. Margot shares how the CAQ is intersecting the accounting and legal compliance professions to improve corporate culture and financial reporting.
The CAQ was founded post-Sarbanes-Oxley era by the largest accounting firms, who thought it was necessary to have an organization to serve as the voice of the profession. As a non-partisan, public policy organization, the CAQ frequently works with the PCAOB and the SEC. A notable initiative they carry out is convening capital market stakeholders to advance the discussions of critical issues affecting either audit quality or public company reporting.[4:08]
One thing that should be recognized is that professionals in finance are skilled with data, processes and controls. They are always innovating ways to build systems that detect or monitor enterprise and fraud risks, and raise a red flag when something goes beyond what should be a normal transaction or activity. Compliance professionals should be part of these conversations, as their work is impacted by these systems.
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Margot Cella on LinkedIn
AntiFraudCollaboration.org
To learn more, and contact Vincent Walden, please visit Alvarez and Marsal
Malcolm Wright is the founder of InnoFi Advisory. As a former Chief Compliance Officer at a large cryptocurrency exchange, Malcolm now advises companies on ensuring responsible innovation in digital finance. All companies, and their compliance officers, need to be familiar with cryptocurrencies and the trend towards decentralized finance. Malcolm describes how current compliance concepts such as “Compliance by Design” and “Know Your Customer (KYC)” are still applicable in the crypto space and gives practical advice to legal and compliance professionals on how to navigate in the crypto future.
The year 2021 brought with it an explosion of different non-fungible tokens (NFTs) used for funding projects of all shapes and sizes, which often happens in decentralized finance where the whole ecosystem is run by smart contracts - automated contracts driven by code. Having an NFT is basically a digital certificate of provenance. The emergence of these NFTs and their uses has heralded the creator economy, and will revolutionize the way culture, finance, and our societies work.
For the last few years in crypto, there has been significant focus on centralized exchanges and custodians, but recently focus has shifted towards other areas of risk. At InnoFi, they consider how risks can present themselves not only from an anti-money-laundering perspective, but also a consumer protection perspective.
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Malcolm Wright on LinkedIn
To learn more, and contact Vincent Walden, please visit Alvarez and Marsal
Chian Boen is Senior Manager with Johnson & Johnson’s Global Audit & Assurance Group. He is experienced in government and AML investigations, law enforcement, and forensic accounting. He joins Vince Walden to discuss Johnson & Johnson’s strategy for data-driven assurance.
Two of the things Chian relies the most on to help him conduct anti-corruption audits and investigations are his team and heavy analytics. If you’re not using certain analytics tools, such as Tableau data visualization, you’re not leveraging as much as you can in terms of investigations. As for investigations, while it is always great to have face-to-face conversations, software like Zoom and Microsoft make things more flexible, as you can use resources on-screen to help you identify body language tells.
The COVID-19 pandemic has accelerated innovation and technology, Vince says. People were forced to adapt and improve in such a short time that everything progressed at a much faster pace than it would have otherwise.
Bob Mascola is a global legal and compliance executive and educator. He is Senior Director of the Program on Corporate Ethics and Compliance at Fordham University School of Law, as well as Senior Counsel at Compliance Systems Legal Group. He joins Vince Walden to discuss compliance from an academic perspective.
Fordham University’s program on Corporate Ethics and Compliance is a 30 credit Master’s degree program full of students from different professional backgrounds. Most of the students are working professionals, so they bring real-life experience and insights to enrich classroom discussions. The curriculum is designed to meet the needs of each student, regardless of how diverse their specialties are.
The program is helpful in equipping students to add value to the organizations that they're with. In addition to acquiring knowledge about different regulatory frameworks, it teaches skills like legal research, risk assessment, technology training, communications memo writing, and how to conduct investigations.
Being familiar enough with data to work with it is essential for future success in compliance. The DOJ and other enforcement authorities are raising their expectations of companies regarding the use of data analytics. If you want to show that you are leading industry expectations, you've got to be the best in data analytics.
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Bob Mascola on LinkedIn | Twitter
Jay Leib is Executive Vice President of Innovation and Strategy at Reveal, an eDiscovery review company. Jay was previously the Chief Strategy Officer at kCura before he founded NexLP, a pioneering AI company in Chicago that was acquired by Reveal. He joins Vince Walden to talk about the work Reveal has been doing, and investigation and eDiscover programs.
By the year 2010, data had become much larger than human beings could get through in an efficient manner. It was for this reason that Reveal was founded, as well as to perform as an alternative to Relativity. Reveal’s mission is to help end users, law firms, in-house corporations, investigators and international consultancies “get through whatever their obligation is, as far as data goes, as fast as possible, while finding the key insights and key stories as fast as possible.”
After acquiring a company called Brain Space, Reveal created what they call an ‘AI model library.’ Their data science team has built AI models to target specific issues within data to get important documents into the hands of investigators as quickly as possible. AI models have also been built to look for issues surrounding unethical and fraudulent behaviors.
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Jay Leib on LinkedIn | Twitter
NexLP.com
Alan Gibson is Director of Legal and Compliance Innovation at Microsoft, where he identifies and incubates market-making opportunities for legal and compliance solutions. With over 20 years of cumulative experience in law, business and compliance, he currently serves as a change agent to revolutionize the way companies measure program effectiveness and manage compliance risks. He joins Vince Walden to define the three horizons of compliance innovation, and what they entail.
Alan’s mission is to find new ways that technology can help transform both the business and practice of law and compliance. He spends his time discussing the art of what’s possible with customers and at Microsoft to incentivize foundational technology investments and frame those sorts of conversations.
The first horizon of compliance innovation involves solving immediate, important issues, building foundational capabilities, and managing discreet risks within your department. The second involves thinking about the midterm objectives of your overall digital transformation strategies, creating multi-point solutions, and taking advantage of the ability to combine. Finally, the third horizon involves looking at the long-term innovative solutions that can cause disruption and using them as the North Star for the first two horizons.
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Alan Gibson on LinkedIn
Microsoft
Bryan Judice is Senior Director of the Office of Ethics and Compliance at Panasonic Avionics Corporation. With over 22 years of experience specializing in conducting forensic investigations and large, complex litigation matters, he has provided financial and business advisory services to clients in a variety of industries, including aerospace, aviation, and financial services. He joins Vince Walden to talk about data-driven compliance, and why it’s more effective.
Compliance processes best suited for analytics are available, self-contained, and have few different touchpoints in order to ensure the data isn’t dispersed across too many different systems. Singular compliance initiatives are painless to digest, pull apart and examine, which makes it easier to create analytics to identify where the risks are in your programs.
Bryan shares what business processes he has seen work effectively for monitorships in today’s landscape. He also discusses the five things everyone should know before they secure buy-in and budgets for data-driven compliance.
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Bryan Judice on LinkedIn
Dheeraj Thimmaiah is Global Director of Ethics and Compliance, heading Compliance Analytics at AB InBev. He is data-driven and passionate about innovation. Dheeraj is dedicated to spending close time with AB InBev’s users and customers because even if you have the best tools, your organization will not get far without an audience. He joins Vince Walden to share insights about his role and work at AB InBev.
BrewRIGHT is AB InBev's advanced data analytics program, which has 15 different apps and compliance workflows in 60 different countries. BrewRIGHT continuously monitors compliance (which has been especially useful during the pandemic), assists in managing investigations, and allocates resources effectively.
Dheeraj shares tips on how to get started on the analytics journey for compliance: ask yourself how you can control the uncertainties, identify the problems, and find a way to use technology as an enabler in building impact.
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Dheeraj Thimmaiah on LinkedIn
AB-InBev.com
In this episode, Vince Walden goes one-on-one with Sergio Moro, former Minister of Justice of Brazil and Managing Director of Disputes & Investigations at Alvarez & Marsal. With over two decades of legal and investigative experience, Sergio specializes in leading high-profile and complex anti-corruption, white-collar crime, money laundering, and organized crime investigations. They talk about his fascinating career journey from a federal judge to Minister of Justice, as well as some of the landmark cases he presided over, such as Operation Car Wash, which greatly impacted the corporate culture of Brazil. This was not the case only five or six years ago.
The normal behavior of corporate culture in the past was to deny everything and refuse to cooperate whenever issues arose, but various operations led by Sergio caused Brazilian companies to drastically change the way they did compliance. Many compliance systems were previously used by third parties to channel bribes to public officials. It's not enough just to have policies and procedures written down; they must be implemented and operationalized.
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Sergio Moro on LinkedIn
Ernest Brod is Managing Director with Disputes and Investigations services and head of the Global Investigations and Intelligence practice at Alvarez & Marsal. For 30 years, Ernest has worked with top law firms, corporations, and financial institutions to reduce clients’ risk of fraud, corruption, Foreign Corrupt Practices Act issues, and anti-money laundering and terrorism concerns. He joins Vince Walden to discuss new technologies that are redefining how due diligence is done.
The traditional practices of third-party due diligence involve public record searches supplemented by dumpster diving and surveillance. However, advancements in technology have allowed Alvarez and Marsal to do deeper, more advanced and efficient due diligence. Alvarez and Marsal provide intelligence services such as web, bank, contact, and location intelligence which have incredibly dynamic applications and reduce the risk of fraud and corruption.
Some of the providers of these types of intelligence are shady and often push the envelope where legality is concerned. Acquiring these services through recognized firms like Alvarez & Marsal is the safest way to conduct the advanced due diligence that they provide as their practices are filtered through ethical concerns.
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Ernest Brod on LinkedIn | Twitter
AlvarezandMarsal.com
Shub Nandi is the co-founder and CEO of PiChain Innovations Pvt Limited, a RegTech company that researches and develops DeepTech systems to proactively learn, solve, and automate complex problems. Shub joins Vince Walden to discuss PiChain’s use of AI and blockchain to help with the automation of customer onboarding.
Roughly 1 trillion USD is laundered yearly in the US, yet only 1% of those illicit transactions are uncovered, Shub cites. This occurs despite the existence of regulations and compliance, suggesting that the implementation of these measures is lacking. Shub comments that many financial institutions view compliance as a “black box that is yet to be solved.”
PiChain is bridging the gap between the unbanked population and financial institutions via easy, simple, and convenient interfaces that are easily accessible through smartphones. Onboarding the 400+ personas in this population requires enhanced KYC and advanced programming like artificial intelligence to create ideal financial products for their needs. In addition, PiChain uses blockchain in conjunction with AI technology to ensure that their processes are compliant, and their models are fair and explainable.
Shub advises financial service companies to focus on understanding their customers rather than just their financial details.
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Shub Nandi on LinkedIn
PiChainLabs.com
Sam Eastwood is a litigation partner at Mayer Brown’s Litigation Practice in London and a member of the firm’s White Collar Defense & Compliance practice. He joins Vince Walden on this week’s episode to discuss the risks and trends related to global compliance and data analytics.
Sam expresses that companies need to disclose more about their compliance programs operations. Transparency into the data analytics itself is a good way to conduct audits, he adds. Data protection and the way data is collected, processed, and transferred is getting more challenging. As such, Sam stresses that the fraud detection process is in need of an upgrade.
Corruption is a human rights issue. It is important for clients within the compliance field to have an effective human rights compliance program. As things progress, Sam states that human rights due diligence laws are soon to be passed. When these laws are eventually introduced, companies will be expected to conduct human rights due diligence on the impact of their business activities. Monitoring legislative developments and carrying out human rights assessments are two of the ways Sam says that companies can do this.
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Sam Eastwood | LinkedIn
Andrew Levine is a partner at Debevoise & Plimpton LLP, who specializes in white-collar regulatory defense and internal investigations. He joins Vince Walden to discuss the compliance journey, what initiatives compliance professionals should take in 2021, and the recently updated DOJ compliance journey.
The DOJ guidance that came out in June 2020 is a step in the right direction in terms of understanding how prosecutors incorporate compliance programs into their decision-making, Andrew says. It offers real, actionable advice for building a framework for analyzing a computer program. The guidance is centered around three critical questions: Is the program well designed? Is it adequately resourced and empowered to function effectively? And, does it work in practice?
As prosecutors' expectations for what makes up an effective compliance program continue to rise, leaders should think about enhancement opportunities. “Don’t let the perfect be the enemy of the good,” Andrew counsels. “Develop a reasonable plan, think about resourcing for implementation, think about a timetable that works, and then execute while understanding that the compliance journey is a never-ending one.”
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Andrew Levine on LinkedIn
In this episode, Vincent Walden welcomes back Jason Lee, CEO of DailyPay to the Pond to discuss the earned-wage access business model and how major employers like Kroger, Target, Dollar Tree and many others are rethinking how employees get paid in an efficient, compliant manner.
Covid has changed how we think about work and the people who do it, and Jason Lee believes that this new understanding of our reliance on the hourly workforce is going to create the impetus to serve and honor them more effectively. One of the ways this is going to be happening is through the earned-wage access. Rolling this out is a meaningful and valuable benefit for employees, but there are compliance issues that companies need to be aware of.
Jason says that it is incumbent upon employers to make sure that they are in compliance on three key issues: when taxes are owed and paid, wage and hour compliance and payroll deductions, and the issue of whether earned-wage access is being treated like a loan.
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Jason Lee at DailyPay / LinkedIn
Aaron Nicodemus is a staff writer and reporter at Compliance Week. He joins Vince Walden to discuss the recent report authored by COSO and to share new recommendations for managers and executives to manage compliance risks.
Internal audit professionals would be the compliance professionals most familiar with COSO, as they set the guidelines for Sarbanes-Oxley internal controls compliance. The report, titled “Compliance Risk Management: Applying the COSO ERM Framework,” was like a collaboration between accountants and attorneys, according to Vince.
Compliance should not be viewed as a low level function, Aaron remarks. Rather, it should be viewed as a strategic partnership with a business to run their operations and initiatives according to the rulebook, in order to avoid missteps and minimize risk.
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Aaron Nicodemus on LinkedIn | Twitter
ComplianceWeek.com
COSO report: Elevating compliance leads to more informed decision-making
Vincent Walden talks about the importance of gratitude in this solo episode of The Walden Pond. He encourages listeners to pause and count their blessings. We don't need material possessions to be thankful, he says, only a sense of existence. Vincent expresses his gratitude to listeners, colleagues and friends for their contributions to his personal and professional growth.
Jennifer Saperstein is an Anti-Corruption and White Collar Partner and the Vice Chair of the Anti-Corruption Practice Group at Covington and Burling LLP. She joins Vince Walden to discuss why companies need to be smart about resourcing, compliance technology trends, and the compliance industry post-COVID.
Having a risk-based documented plan for effective compliance programs before consulting any external advisory service is beneficial for companies. Being able to demonstrate where they have focused their limited resources is always helpful. It is now even more important for companies to make smart, risk-based decisions about where to spend their time due to the current pandemic.
A recent survey of over 30 companies revealed that in the last 10 years, there has been a significant transformation in compliance technology trends. Almost 70% of respondents say they use technology for third-party due diligence and 100% saying they use an LMS system to train employees. However, many companies still rely on manual processes for certain parts of their compliance programs.
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Jennifer Saperstein on LinkedIn
Cov.com
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