Deciding where to incorporate: Which state, which country

One of the things people like to do before engaging in business is to stress-test the legal community. How effective are the prosecutors; what are the barriers to litigation; how much evidence do they ~really~ require to awaken from their coma.

At the same timem we also like to assess the "hassle factor" of a given geographic region: The law says X, the enforcement is Y, and the actual conduct is Z.

Ideally, all are aligned; in practice the greater the divergence, the greater the hassle.

Mind you, if the costs of "the hassle factor" are low enough, we might put up with non-sense. However, when the costs of "the hassle factor" are far higher than the paltry rewards, that's when we cut and run.

Right now the economy is in this notional "bogus recovery". And we're looking for an excuse to shut down.

Which do we cut first? Well, one simple way is to look at financials. However, others like to also know "what's the regulatory regime like" -- despite our bad cashflows, maybe we'd like to continue working in a particular part of the world where the margins are smaller, but the bullshit is lower.

That's where corporate's integrity-audits comes in.

Interesting what types of sausage-making that goes on for legislation.

However, this is all well and good.

The other side of the coin that really matters is: Once that law is passed, how vigorously is it prosecuted/enforced/investigated.

It's all well and good to get worried about legislation. The real problem is when the regulatory mechanism fails to credibly enforce the laws.

The US has a problem with this in the Securities Industry. It not only has insufficient audits, but the state and federal regulators actively rebuff information that is otherwise used for SAS99 audit scope assessments.

It should come as no surprise why firms move off shore. The hassle factor of working within the US regulatory system isn't just the 'regulatory side' [from the perspective of the business trying to wade its way through the maze], but also form the perspective of the business that wants to know what kind of support it will get for simply "doing the right thing."

TN 42.1 prosecution guidelines give wide latitude for prosecutors to decline to prosecute; putting aside the grand-jury-is-unfair argument, if prosecutors aren't going to ensure violations are timely prosecuted, there's potentially a large pile of baloney that must happen before real action is taken.

Fine. But it is very disappointing when the "initial signs of problems" are so quickly rebuffed as "minor," when they are actually the tip of a very large iceberg.

Strange, how some entities will be unresponsive to simple problems and have the public believe they can handle complicated things; then when one follows up to evaluate management, the hurdles get higher.

It's only when the question comes from an "uncontrollable, unexpected" source [the real client] that the story suddenly changes.

It's nice to be able to share with the boss "what the real hassle was originally" and have admissible evidence that their story has changed.

And its even more fun when the General Counsel has publicly stated one thing, and privately launched a fleet to do the opposite.

Stupid General Counsel. They asserted one thing, and sent it through the mail. Registered.

Let's hope they don't delete the file. We still have our copy. It shows an interesting contrast with what was publicly asserted. And then a Brady-request turns up "nothing". Ouch!

Is that still called destruction of evidence, obstruction of justice, or do they call it "Ooops, we made an error."

Oh, and on top of that, multi-agencies outside the General Counsel's knowledge have already fact-checked the situation without their knowledge prior to engagement.

They're so deep, they don't even know how. They're going to get fired.

RICO complaints are fun. Especially when the "pervasive pattern of conduct" is admissible evidence, and they believe "it doesn't exist."

Yes, shredded documents can be reconstructed. It's always fun to have the documents reconstructed by hand after being shredded, and have proof that what they are showing in court is a fabrication.

Your honor, would you like to see the documents we found in the garbage can, or would you like to see the reconstructed version?

It doesn't matter what the court says. Either way, we know your document-retention policies are not quite up to our standards.

We like to interact with those who obey the law, tell the truth, and are easy to deal with. Those we have to spend this much time monitoring are not worth the hassle.

Yes, there's nothing stopping us from bringing this information to opposing counsel to impeach you. Six years is a long time when you're dealing with public corruption.

Some of the things public officials might want to look at [if they're interested in retaining the revenue stream] is to look at the following:

- Are you customer-service representatives capable of doing minimal fact checking and investigations;

- When asked simple questions, do your personnel actually answer the question honestly, or are there many layers of bullshit;

- When the statute or court rules mandate X-action, what responses is there -- or are there excuses not to take action.

Using a simple proprietary model, it is easy to look a just a few indicators, and then evaluate the firm's reliability.

The fun part isn't simply to measure the success of the model in terms of "the business decision rule" but more broadly in "how many grand jury indictments" can we stir up.

We play for keeps. You may be on our payroll, but we find stuff that violates the law, or is a material indicator related to other criminal indictments, we'll play dumb while you dig your own grave.

This can last for years. You're the last to know. We knew before we took the first step.

Yes, you've been set up. Big time.

Next time, be careful when you decide to blow-off a requirement. You never know who really knows the statutes, court rules, or your state bar ethics rules.

You won't even know what you lost.

There are plenty of other trains. Not yours.

You're fired.