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Jordan A. Thomas discusses strategies regulators must make when taking on corporate criminals
Jordan A. Thomas recently spoke about how officials must come up with new methods and techniques when cracking down on corporate corruption. Thomas said, “Traditionally the answer has always been ‘we need new leadership,’ and the new leadership comes in and they say ‘we are going to be more aggressive’ and then they say ‘to be more aggressive we need more money.’”
They often then “make an argument along the lines of [needing] greater powers or penalties,” Thomas said.
Thomas continued that regulators need to “innovate” rather than simply rely on new cash, and points to developments as the introduction of legislation in the U.S. through the Dodd-Frank Act, which includes a whistleblower component.
“What we found [was that] our main weakness was actionable intelligence. We came to the conclusion that law enforcement authorities were essentially trailing behind the crooks. As opposed to identifying the misconduct earlier on in the cycle, they had to build circumstantial cases from the ground up — it was like a reporter without sources.”
Thomas said there is “absolutely” a problem when funding comes in “fits and starts.” He believes regulators need to want to “catch the bad guy” rather than focus too heavily on “rules and procedures.” He encourages regulators to aggressively take the fight to court. “If you don’t have a strong trial component to your work you are very limited in your ability to achieve good outcomes.”
Thomas points out that infamous U.S. energy group Enron, where there was widespread accounting fraud, had what was regarded as the best code of conduct among any corporation before its collapse early last decade.
There is a lot companies can do to take control of their culture, Thomas said. “In the U.S., if you asked senior leaders of an organization, they would say ‘we have a culture of integrity, we encourage people to speak up. I think 95 percent or more would say that.’”
“If you ask them ‘have you conducted an independent poll of your employees — do you believe you have a culture of integrity? Do you believe you will do the right thing if in court?’ the answer would be they haven’t asked those questions.”
“Too few organizations are asking the question.”