In-House Counsel

Hey Internal Compliance, Don’t Be Afraid To Have A Spine

Don’t be afraid to stand up to untoward activity when you see it.

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I recently finished the book Billion Dollar Whale, which chronicles the rise of fall of a Malaysian financier, Jho Low, and his role in one of the largest cases of financial fraud in recent memory.

As a quick primer, Low is accused of working with the Malaysian government to establish a fund known as 1Malaysia Development Berhad (1MDB) under the pretense of using it as a tool to bring international investment and attention to Malaysia.

Instead, Low used the seemingly legitimate state fund to obtain billions of dollars in international investment which he subsequently used to fund his extravagant lifestyle while ensuring enough money found its way back into the pocket of key Malaysian politicians.

And my use of the descriptor “extravagant lifestyle” truly does not do Mr. Low justice as is evidenced by several very public displays of his newfound opulence including:

  • Paying Britney Spears to pop out of a cake for his birthday;
  • Ordering 2 million euros worth of Cristal champagne in the South of France just to see it be paraded around a nightclub; and
  • Chartering a 747 jet to whisk him and his celebrity entourage from Sydney to Las Vegas on New Year’s Eve so the group could celebrate the countdown to midnight, twice.

I share all of this not to romanticize his lifestyle, but rather to give you an idea of Low’s less-than private demeanor. In fact, the book reported he was so flashy, Jordan Belfort, the inspiration behind the movie Wolf of Wall Street, reportedly declined an appearance fee to attend one of Low’s events for fear of being associated with what he could only assume was criminal.

Given Low’s lifestyle, you would think he would be forced to hide in the shadows of society with his funds buried in his yard since no bank would touch them, or he would have to falsify his business records since no accounting firm would certify them otherwise, right?

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Wrong.

On numerous instances throughout the book, the authors note a time where a reputable organization declined to press Low on the origin of his funds in favor of accepting a large check for their services rendered. Organizations such as Goldman Sachs, which counseled Low through several of his acquisitions, KPMG, which rubber stamped the financials of 1MDB, or Coutts International, the same bank that handles Queen Elizabeth’s money, all played a role, however small, in allowing Low to perpetrate his fraud.

The book notes that many of these institutions initially expressed some unease over the funds before ultimately deciding to take the business. Which leads me to my point and the title of my post, to all the internal compliance or in-house legal shops out there, don’t be afraid to stand up to untoward activity when you see it.

As a fellow in-house counsel, I understand the delicate balance you have to strike between being a team player and guiding your organization away from risk. But at the end of the day, some instances are so glaringly inappropriate you have to risk your standing with your company to help save them from a future harm.

And to those who think I am a nark and a square not fit to work in the business world, when the Wolf of Wall Street has a better moral compass than you, maybe, just maybe, you ought to rethink your own.

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Stephen R. Williams is in-house counsel with a multi-facility hospital network in the Midwest. His column focuses on a little talked about area of the in-house life, management. You can reach Stephen at [email protected].

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