Regulatory Compliance Flashcards

Under SOX Section 304, when an issuer restates due to misconduct, what must the CEO and CFO reimburse?

Answer: Bonuses, incentive or equity-based compensation, and stock-sale profits received in the 12 months after the misstated filing

Section 304 requires CEO and CFO reimbursement of incentive compensation and stock-sale profits for the 12-month period following the misstated filing.

SEC Rule 10D-1, implementing Dodd-Frank Section 954, requires listed companies to recover erroneously awarded incentive compensation from executive officers over what period?

Answer: The three completed fiscal years preceding the date a restatement is required, on a no-fault basis

Rule 10D-1 mandates no-fault recovery of excess incentive compensation received during the three completed fiscal years before the restatement date.

In Delaware, the Caremark doctrine imposes which duty on corporate directors?

Answer: A duty of oversight to implement and monitor reporting systems for compliance risks

Caremark holds directors liable for bad-faith failure to implement or monitor reasonable information and reporting systems.

Under the FCPA, which state of mind satisfies the knowledge requirement for payments made through a third-party intermediary?

Answer: Awareness of a high probability that the payment will be passed to a foreign official, including conscious disregard

The FCPA defines knowledge to include awareness of a high probability of the circumstance, capturing willful blindness.

To be eligible for any DOJ cooperation credit in a corporate criminal investigation, what must a company provide?

Answer: All relevant non-privileged facts about the individuals involved in the misconduct

DOJ policy conditions cooperation credit on disclosing all relevant non-privileged facts about individuals involved, and it does not require a privilege waiver.

Which item is NOT one of the required components (pillars) of a BSA/AML compliance program?

Answer: A mandatory annual external audit by a nationally recognized accounting firm

The pillars are internal controls, independent testing, a designated BSA officer, training, and risk-based customer due diligence, and independent testing need not be done by an outside firm.

SOX Section 906 imposes which maximum criminal penalty on an officer who willfully certifies a periodic report knowing it does not comply with requirements?

Answer: Fine of up to $5 million and imprisonment of up to 20 years

Under Section 906, willful false certification carries up to $5 million in fines and 20 years imprisonment.