Recently, Novartis came to a settlement with the SEC about an FCPA action. In case you are unfamiliar, the key points of the violation are this:
My conclusion is that there is a strong possibility that Novartis could have had a chance to avoid or reduce the $25 million penalty if they had a solution, like Oversight Insights On Demand™ for FCPA in place. I’m pretty confident that our software would have picked up the $8,100 in bogus expenses as outliers as well as some of the other activity identified in the blog post. Even if we didn’t catch the risky transactions, the fact is with IOD for FCPA, Novartis would have had a program that demonstrated to the SEC (and most likely the Department of Justice) a good faith effort to comprehensively monitor their T&E transactions for such non-compliant and illegal activity. Having a software in place in addition to manual oversight also points to the lack of effectiveness of manager approval, either through negligence or collusion.
It seems pretty risky for any of these global businesses with international interests not to use a solution like ours when so much is at stake monetarily. Especially given the uptick in FCPA violations in the last few years – the SEC is looking for bad behavior. I bet the price for Insights On Demand would look pretty reasonable in hindsight to organizations like Novartis compared to what it cost them for being so vulnerable.
After all, our goal is to enable our clients to have foresight before it’s too late. It will cost less than $25 million – you can count on that.
Oversight Press releases.