A dollar here.  A twenty there.  A couple of doctored receipts for dinner at the office.  What’s the big deal?  We’re not talking about a first class ticket and a suite at the Olympics or purchasing a Ferrari.  We’re talking about take-away dinners.  Yeah, sure it’s in violation of the company’s policy, but nobody reads that carefully anyway.  And nobody gets punished for that kind of little indiscretion, right? 

Wrong.  If the recent news is anything to go by, companies are getting serious (and going public) with enforcement of their gifts and expense policies, no matter how small the violation. 

Most fraud and anti-bribery enforcement actions which involve gifts and hospitality include lavish elements.  Reports of managers stealing from the company to take luxury trips, buy themselves luxury gifts, or throw themselves lavish parties is the stuff of many articles and court cases.  But the trend in companies is turning toward the punishment of smaller indiscretions, and the compliance profession should celebrate this shift. 

Wells Fargo

Just last week the Wall Street Journal published an article detailing the firing of more than a dozen employees who violated the meal reimbursement policy.  At Wells Fargo, employees were allowed to buy dinners and charge them to the firm after 6:30 p.m. if they were working late.  Some employees ordered meals before that time, then altered receipts for dinners charged to the bank.  Employees ranging in seniority from analysts to managing directors were punished for violating policy.  The concern was brought to the attention of the bank by “concerned team members.”  

The infractions resulted in employees being fired or placed on administrative leave, and analyst bonuses being delayed while the investigation went on. 

Fidelity

Similarly, in May, Fidelity Investments fired or allowed 200 employees to resign over misuse of a workplace benefits program.  Some employees at issue bought computers and electronic equipment, then cancelled the order but retained the reimbursement from the company.  Others submitted altered receipts regarding fitness-related items such as Fitbit devices.

According to the Wall Street Journal article, affected employees were called into human resources and questioned about their purchases and compliance with the firm’s ethics policy, then fired.

A Shifting Tide

These articles are notable for two reasons: (1) from all indicators, banks are following their ethics policy much more stringently than previously enforced, and (2) the ethics violations and subsequent firings have been reported in the press. 

It wasn’t very long ago that at most companies, these types of violations would either receive no response at all, or a simple slap on the wrist.  Perhaps the tide is turning, such that companies (at least in the banking industry) are aware that small infractions of their ethics policy that go unpunished create a slippery slope where, over time, people don’t take compliance or ethics seriously. 

Perhaps more importantly, the publishing of these articles in the mainstream business media shows the public’s interest in violations of compliance and ethics policies.  Once shareholders and regulators scrutinize ethics violations and companies’ responses to them, manager and CEO attention will be focused there as well.  This can only bode well for our profession and the importance placed on the work we do every day.

In the case of Wells Fargo, members of the team brought the actions to the attention of the company.  How refreshing it is that the company took action on these whistle-blower complaints, performed an investigation, and talked on record to the press about the outcome. 

Your company should pay attention to small violations of the ethics and compliance policies.  After all, if it doesn’t, the readers of the Wall Street Journal will be watching.