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November 2022

News that Control Professionals need to know

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Internal Control Chatter
Each month the staff of The Internal Control Institute reviews hundreds of articles related to Internal Control and Corporate Governance. Here are brief summaries of some of the top articles (along with links to the original article) that may be of interest to you.

Why the collapse of FTX is worse than Enron

FTX was the second largest cryptocurrency exchange in the world – today it has been named ‘a complete failure of corporate controls’. What happened?


25 NOV 2022 

Until recently, cryptocurrency exchange FTX was the second largest crypto exchange in the world, after Binance. It had risen to prominence with support from major investors, such as Sequoia, BlackRock, Temasek, and OTPP. At one time, it was worth $32 billion and spruiked by celebrities, such as footballer Tom Brady. FTX’s then CEO was the second largest donor to the democrats.  Today FTX has entered bankruptcy with users of the exchange set to lose large amounts of money. A new CEO to oversee the bankruptcy process. Ironically, that CEO is John J Ray III, who also oversaw Enron’s bankruptcy proceedings.  Enron is often seen as the gold standard for corporate fraud, malfeasance, and complacency, with the scandal leading to the largest bankruptcy reorganisation so far in U.S. history. 

Read The Article

OSHA orders Wells Fargo to Pay $22 Million to Wrongfully Discharged Whistleblower

Tuesday, November 22, 2022

The Occupational Health and Safety Administration (“OSHA”) levied a hefty penalty on Wells Fargo on September 1, 2022, for its violation of the Sarbanes-Oxley Act (“SOX”). OSHA found that the company unlawfully retaliated against an internal whistleblower who raised concerns that the bank was engaged in illegal practices. The agency ordered Wells Fargo to pay the whistleblower more than $22 million in damages, including back pay, front pay, interest, lost bonuses and benefits, and compensatory damages.

Read The Article

A Complete Failure of Corporate Controls: What Investors and Accountants Missed in FTX’s Audits

An expert review of FTX’s audited financial statements reveals a series of red flag related-party transactions that should have led to more scrutiny of the company’s operations.

By Francine McKenna

Nov 18, 2022

On Nov. 2, CoinDesk’s Ian Allison lit the match that set the FTX empire built by quixotic founder Sam Bankman-Fried on fire. Looking at financial reports dated June 30, Allison noted that FTX proprietary trading arm Alameda Research had $14.6 billion in assets on its balance sheet but that its single biggest asset was $3.66 billion of “unlocked FTT” and the third-largest “asset” was $2.16 billion more of “FTT collateral.” Nearly 40% of Alameda’s assets consisted of FTT, a coin that Bankman-Fried himself more or less invented. It wasn’t an independently traded stablecoin or token with some volume and a market price or actual fiat in a reputable bank. Allison wrote that the situation suggested that ties between FTX and Alameda were unusually close.

Read The Article

Auditors in Iraq uncover staggering $2.5 billion tax fraud

By Qassim Abdul-Zahra and Samya Kullab

November 22, 2022

Auditors in Iraq have uncovered a massive scheme in which a network of businesses and officials embezzled some $2.5 billion from the country’s tax authority, despite layers of safeguards. The scandal poses an early test for Iraq’s new government, which was formed late last month after a prolonged political crisis. Prime Minister Mohammed Shia al-Sudani has vowed to crack down on corruption, but few expect any senior officials or political leaders to be held accountable. The scale of the embezzlement -- around 2.8% of the 2021 state budget — is remarkable, even for an oil-rich country where corruption has been rampant for decades. Transparency International, a global watchdog, rated Iraq 157th out of 180 countries on its 2021 index for clean

Read The Article

All-year-round is the best time for businesses to check their anti-fraud policies and controls

By Keeran Madhav 

26 Nov 2022  

A trend evident over the past few years is for more fraud to be uncovered during an internal or external audit. Companies should exercise management awareness as their first line of defense in preventing and detecting fraud – as by the time systems of control have already been breached and the damage done. The current environment is conducive to fraud with a poor economy; working from home in the aftermath of Covid-19; rising unemployment and even inflation. But before all those justifications lies the motivation of poor internal controls. Nor is it restricted to lower-level employees, but equally to management and even top management.

Read The Article

The Foreign Corrupt Practices Act – An Executive Summary

By Daanish Hamid

November 16, 2022

Recent months have seen a resurgence in interest in the Foreign Corrupt Practice Act (FCPA) and related matters as a result of enforcement activity that have yielded significant fines, penalties, and disgorgements. In one instance, a company had to pay a $700 million settlement to resolve FCPA claims brought against it (not to mention additional fines in other countries).

So far in 2022, FCPA enforcement authorities have targeted businesses involved with a variety of industries, including natural resources, financial services, waste management, healthcare, steel manufacturing, aviation, insurance, and technology. In some cases, these companies were headquartered outside the United States – a clear reminder of the extra-territorial jurisdiction that U.S. authorities continue to assert when pursuing FCPA cases.

Read The Article

OFAC Sanctions: Avoiding Unintentional Violations

 BY Woodruff Sawyer

November 17, 2022

Are you a US-headquartered company with international business operations? How confident are you that your company and its agents, employees, affiliates, or subsidiaries are not dealing with foreign countries, geographic regions, entities, or individuals that are the subject of economic sanctions? The US and other international actors most recently deployed economic sanctions in response to Russia’s invasion of Ukraine. And the spotlight became a bit brighter when US Deputy Attorney General Lisa Monaco called sanctions “the new FCPA.” As we previously discussed, the Foreign Corrupt Practices Act (FCPA) generally prohibits companies and their employees and representatives from the payment of bribes to foreign officials to assist in obtaining or retaining business. This article provides a brief overview of the US economic sanctions regime, how it is enforced, and ways that companies can strengthen their sanctions compliance programs to mitigate the risk of violations.

Read The Article

These are the biggest FCPA cases for each of the past ten years

By Richard L. Cassin

November 17, 2022

The biggest FCPA resolutions yearly show enormous variation and no predictable pattern. Although four of the biggest cases for each of the past ten years settled for more than $1 billion, with an overall average settlement size for the ten cases of about $996 million, a couple of years were laggards. The year during the past decade with the biggest FCPA enforcement action is 2020, with Goldman Sachs’ $3.3 billion resolution.In contrast, the biggest case in 2021 was just $122.9 million, and in 2015 the biggest case was a paltry (by FCPA standards) $25 million. Seven of the companies with the biggest FCPA settlements for each year since 2013 still appear on the FCPA Blog Top Ten list, where the “smallest” resolution amounts to $700 million.

See the Top Ten List


The Internal Control Institute™ (ICI) improves organizational Internal Control worldwide by providing training, products and services and individual Professional Certifications
recognized internationally. The Institute's Board of Advisors has determined it would like to further expand into areas where it is not directly represented. ICI provides world-class
programs and its intellectual property to affiliates free of charge and shares all program
revenue with them. If your organization is interested in partnering with ICI to earn revenue while you contribute to the development of the internal control profession worldwide please contact Dr. Michael Pregmon, Jr., Chief Operations Officer, by email at or by phone at 727-538-4113 in the USA.

Below is a list of WorldWide Affiliates currently serving the profession. If your area is not represented please consider partnering with ICI
2022 Certification Training Program & Exams

ICI and affiliates around the world have a busy training program scheduled for 2022. For more details on the CICS Training programs on offer visit the Events page on our website by clicking on the link below.

ICI World Wide Affiliates

Contact: Mr Aminur Rahman
Tel: +88 01749 400600
Contact: Soulémane BABA DAMAGUI
Tel: +0022997492600

Contact: Mr Humphrey Chawafambira
Tel: +267 75618647
Contact: Mr Eduardo Person Pardini
Tel: +55 11 2599 8360
Contact: Mr Eric Kamegne
Tel: +237 658 292 978
The website of ICI Cameroon is now operational

Our first CICS session in April is online only
Contact: Mr Qiu Jianting
Tel: 400-098-1119 or 010 68004176

Contact: Mr. Yves Dupont
Tel: 0032 2 305 35 25
Contact: Mr Summit Goyal
Tel: +91 9810 575 613
Contact: Mr Nereo Guzman Mendoza
Tel: +52 811 181 3514
Middle East
Contact: Mr Belal Abdul Jabbar
Tel: +962 6 5927171
Contact: Mr Yazid Berrada
Tel: +212 (0) 522-872-585
Contact: Mr Joel Aluko
Contact: Mr Muhammad Farooq Hammodi
Contact: Mr Cosmin Serbanescu
Tel: +40 752 525 525
Singapore, Malaysia, Indonesia & Taiwan China
Contact: Mr Bob Seetoh

South Africa
Contact: Ms Sedie Jane Masite
Email: or
Contact: Ms Nadia Yaich
Contact: Ms Ilknur Tunc
Tel: +90 312 442 50 15
Contact: Mr Jesus Salazar Ras
Tel: +58 426 737 8096 or + 58 416 291 3788
Contact: Mr Nguyen Thanh Tung
Tel: 848 3803 5020
Contact: Dr Proctor Nyemba
Tel: +263 4 443124

Control Quotes:

“Leadership is a matter of having people look at you and gain confidence. If you’re in control, they’re in control.” 

–Tom Landry

About ICI
The Internal Control Institute™ (ICI) is a worldwide organization devoted exclusively to internal control and corporate governance. The Institute is dedicated to the development of world-class educational programs and best practice guidelines on internal control and corporate governance, based on the Sarbanes-Oxley Act and the COSO internal control framework.
Visit us on the web at the Internal Control Institute