Q&A with Martin Bloor of Cozen O’Connor
CCI’s Maurice Gilbert interviews Martin Bloor, who comments here on the impact of companies beginning to utilize data analytics to help identify and monitor compliance risk. One of the keys to help mitigate risk of regulatory enforcement is to constantly reassess your compliance program to ensure it addresses the current risks that your company is facing. It is also important to understand the company’s systems and the type of data that is available, which may be used as a tool by compliance professionals to help detect risks.
Maurice Gilbert: How did you get started on a career working with compliance professionals?
Martin Bloor: A large portion of my practice is focused on investigations involving the Foreign Corrupt Practices Act. I began working on these cases at a time when there was an uptick in FCPA enforcement, which resulted in a real focus by companies on compliance programs in order to help prevent and detect improper conduct. Over the years, prosecutors and regulators have increased their emphasis on the need for strong compliance programs and many companies have heard that message and devoted substantial resources to developing and implementing compliance programs as well as establishing compliance departments to oversee those programs. Given my understanding of the FCPA and experience in seeing how bribery schemes are often carried out, providing companies advice on undertaking risk assessments and developing and implementing compliance programs was a natural extension of my investigations practice. Advising a company on a remediation plan, which often involves recommendations concerning a company’s compliance program, is a key component of the services that we provide to our clients in conjunction with an investigation.
MG: How do you stay current on ethics & compliance issues?
MB: There are great industry publications, such as this one, that I read frequently to keep current on ethics and compliance issues. I also attend the various conferences that are put on by groups like the ABA, the Practicing Law Institute and the New York City Bar Association, which often provide overviews of compliance trends and allow you to hear directly from prosecutors and regulators as to their views on compliance issues. Finally, I speak to people in my clients’ compliance function and hear first-hand the issues they are facing and how those issues are being addressed.
MG: What do you see as some of the most significant regulatory risks facing companies today?
MB: Probably the most significant regulatory risks currently are in the area of anticorruption, anti-money laundering and trade sanctions. Depending on the industry there may be others, for example, financial institutions are currently facing uncertainly concerning the duty owed by broker-dealers to investors.
MG: How might Chief Compliance Officers, Chief Audit Officers and Chief Risk Officers prepare to face these risks?
MB: One of the keys to help mitigate risk of regulatory enforcement is to constantly reassess your compliance program to ensure it addresses the current risks that your company is facing. Most compliance programs evolve over time and compliance professionals need to stay on top of where and with whom the company is doing business. It is also important to understand the company’s systems and the type of data that is available, which may be used as a tool by compliance professionals to help detect risks.
MG: What are some of the significant challenges facing the compliance professionals and businesses you work with?
MB: Compliance professionals face a host of issues and challenges on a daily basis. One overreaching issue that many compliance professionals are now addressing is how to detect risk in the vast amounts of data available to companies.
MG: How are you seeing companies use data in connection with their compliance programs?
MB: Companies, and financial institutions in particular, have used data analytics to help inform their business decisions. Companies are now beginning to utilize data analytics to help identify and monitor compliance risk. When I say data analytics, I mean using data available from various sources – for example, email systems, financial records, sales activity tracking databases (such as Salesforce.com) – and aggregating and analyzing the data to help identify and prioritize issues that may be of interest from a compliance perspective.
MG: What are the benefits of using data analytics in compliance programs?
MB: The use of data analytics allows companies to proactively manage risk and address potential issues as they arise, rather than wait for an internal audit or a whistleblower complaint to flag historical issues – issues that may by that point be headline grabbing problems for the company. By actively attempting to detect corruption, companies may benefit from more leniency from prosecutors and regulators to the extent issues are identified and ultimately self-reported.
MG: Why do you think there is a move to using data analytics in connection with compliance programs?
MB: In a world where more and more data is available in the corporate context, companies need to assess if their compliance programs would be deemed effective in preventing and detecting misconduct if they simply ignored data that was available. Using available data in an effort to proactively identify potential issues looks to be the next step in bringing compliance in line with the reality that there is now massive amounts of data available to a company – the term “Big Data” has been coined – and there are now potentially efficient, cost effective ways to mine that data to address compliance issues.
MG: How can Cozen O’Connor help its clients utilize information gathered through data analytics?
MB: We can advise companies on strategies for using data analytics enhance their existing compliance programs. For companies that are already utilizing data analytics, we can assist in analyzing the red flags that are identified, investigate the underlying conduct, where appropriate, and make recommendations for further enhancements to the company’s compliance program based on our findings. We also can provide advice on issues concerning self-reporting the conduct and represent the company in connection with any government investigation that may follow.
Martin Bloor is a member in Cozen O’Connor’s Criminal Defense & Internal Investigations practice. He focuses his practice on criminal and regulatory investigations of individuals and corporations, corporate monitorships, internal corporate investigations, particularly in connection with potential violations of the Foreign Corrupt Practices Act (FCPA), public corruption matters, forfeiture proceedings and antitrust matters.