🤝 This Week in GRC: Release
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Welcome to Issue 70 of This Week in GRC, MBK Search's weekly digest of the news and views in the world of governance, risk, and compliance.
🔔 This Week's Opening Bell
Months of "complex negotiations, near misses, and high-stakes diplomacy" led to the United States negotiating the largest prisoner exchange since the Cold War.
"In all, 16 Americans, Russians and Germans were freed from Russia, in exchange for eight Russians held in the United States, Germany and other countries," reported The Washington Post.
Amid simmering tensions between Russia and The West, where the EU extended sanctions against Kremlin-backed entities and individuals, this was the very best of risk management.
📰 This Week's Issue
🏦 The FDIC's proposed brokered deposit rules explained
📱 The US Justice Department's new tipster rewards
🤝 The latest GRC jobs, and more.
✍️ What MBK Search is Talking About
The FDIC has proposed a significant overhaul of its brokered deposits rules. This move, announced on July 30, 2024, could reshape the landscape for banks, neobanks, fintechs, and other financial industry players.
The UK’s Financial Conduct Authority (FCA) has released a consultation paper outlining proposed rules for the new public offer platform (POP) regime.
This framework aims to facilitate companies raising more than £5 million through public offers of securities outside regulated markets. The move is part of broader reforms to the UK’s capital markets, designed to streamline fundraising processes while maintaining robust investor protections.
MBK Search looks at what’s in the proposed changes:
📰 This Week's GRC Headlines
Justice Department pilots tipster reward program
The Justice Department has introduced a three-year pilot program that offers substantial financial rewards to whistleblowers who provide original information or analysis related to financial crimes, bribery, or healthcare fraud, potentially filling gaps left by existing award programs at other agencies.
Under the new program, tipsters could receive up to 30% of any assets forfeited by a company due to their information, provided they are not eligible for awards from other agencies like the SEC or IRS.
To be eligible for rewards, whistleblowers must refrain from being meaningfully involved in the misconduct and cannot obtain the information through their work as compliance officers or internal auditors. The program also encourages tipsters to report wrongdoings to their employers and the Justice Department.
While some lawyers representing whistleblowers have welcomed the initiative, concerns have been raised about the program's initial three-year duration and the discretionary nature of the awards, which could impact whistleblowers' decisions to come forward.
The Justice Department has designed the program to work alongside initiatives that encourage companies to self-report wrongdoing, with companies that disclose internal whistleblower reports within 120 days potentially eligible for leniency under a separate corporate voluntary disclosure program.
SEC charges BitClout founder
Nader Al-Naji, founder of cryptocurrency trading and social-media platform BitClout, has been arrested and charged by U.S. authorities with wire fraud and unregistered offering and sale of cryptocurrency amid allegations he defrauded investors and diverted funds for personal gain.
Operating under the pseudonym "Diamondhands," Al-Naji was arrested on Saturday and presented to a California magistrate judge on Monday. He faces a maximum prison sentence of 20 years if convicted on the wire fraud charge.
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The SEC also filed charges against Al-Naji, his wife, and his mother, alleging he raised over $257 million by promoting BitClout as a decentralized platform with no company behind it, a claim the regulator says was deceptive and aimed at avoiding regulatory scrutiny.
Despite BitClout's backing from prominent venture-capital firms Sequoia Capital and Andreessen Horowitz, the SEC alleges Al-Naji used investor funds to enrich himself and his relatives through luxury purchases, including renting a six-bedroom Beverly Hills house and buying gifts worth at least $2.9 million.
The regulator also claims Al-Naji offered and sold BitClout's native token, "BTCLT," as an unregistered security, promoting it as an investment that would increase in value as the platform grew, while controlling its issuance, pricing, and the treasury wallet holding sale proceeds.
Al-Naji's arrest marks a dramatic turn for the former junior world champion rower, Princeton graduate, and Google software engineer, who previously raised $133 million for a now-defunct stable cryptocurrency project called Basis.
Boeing names Ortberg new CEO
Boeing has named Robert "Kelly" Ortberg, a seasoned aerospace industry executive, as its new president and CEO as the company strives to restore its reputation and strengthen its business in the wake of recent crises, including a cabin panel blowout in January.
Ortberg, 64, previously led aerospace supplier Rockwell Collins before its integration into RTX. He will assume his new role on August 8, replacing current CEO Dave Calhoun, who announced his impending departure earlier this year.
Boeing posted a $1.4 billion loss for the second quarter, highlighting the company's ongoing struggles. The plane maker recently agreed to plead guilty to a U.S. criminal fraud charge related to two fatal crashes in 2018 and 2019 that claimed 346 lives.
Ortberg emphasized that safety and quality would be his top priorities, while executives claimed that workers had been encouraged to speak up in recent months. However, whistleblowers have come forward with allegations about their experiences and concerns regarding the safety of Boeing's planes.
Justin Green, a lawyer representing families of Ethiopian Airlines Flight 302 crash victims, urged Ortberg to meet with the relatives as his first step to understand the devastating consequences of Boeing's negligence.
The company's defense, space, and security unit has also faced significant losses due to cost overruns on fixed-price contracts, further straining Boeing's financial performance. The planemaker expects to burn cash in 2024 due to reduced jet deliveries compared to the previous year.
🔥 This Week's GRC Hot Takes
Hot takes and analysis from those on the shop floor
📺 This Week's GRC Podcast
Friend of the newsletter and Audit Hub CEO Kyle McMullan hosted a fantastic episode of ish webinar series "Bank & Audit Executive: AMA". This week's show zeroed-in on data analytics, AI, and how it impacts the IA world.
🧑💼This Week's Hottest GRC Jobs
Make your next career step with MBK Search
A leading trading platform, seeks an individual to support their client network connectivity and trading infrastructure
Our client, a leading insurer, is looking for a Director of Medical Claim Services.
Our client, a leading healthcare management consulting firm, is seeking Senior Managers for multiple offices.
At MBK Search, we find world-class talent so you can build champion GRC teams. Let's start building today. Click here to apply for the latest GRC roles.