This week, we return to Sherlock Holmes-themed blog posts. We finished the review of The Adventures of Sherlock Holmes and now move on to The Memoirs of Sherlock Holmes. Today we move on to The Adventure of the Stock-Brokers Clerk. Leslie Klinger, in “The New Annotated Sherlock Holmes Volume 1”, said, “The world of money has changed little in 100 years, and the ‘The Stock-Broker’s Clerk’ tells a thrilling tale of ‘identity theft’ that might be drawn from today’s headlines.”

In a case which sounds suspiciously close to The Red-Headed League and The Three Garridebs a stockbroker’s clerk is lured away from his place of employment so that imposters can try and rob it. The clerk, Hall Pycroft, consults Holmes with his suspicions concerning a company that has offered him a very well-paying job. He was approached by one Arthur Pinner, who offered him a managership with a newly established hardware distribution company, to be based in France.

Pycroft is sent to Birmingham to meet Pinner’s brother and company co-founder, Harry Pinner. He is offered a very well-paid post with £100 in advance and is asked to sign a document accepting the post and is also asked not to send a letter of resignation to his would-be employers. He immediately commences his duties, but he is concerned about the unprofessional aspects of the business and their sparse offices. (Sounding resoundingly like The Red-Headed League?)

Holmes deduces that the whole point of the exercise was to obtain an example of Pycroft’s handwriting so that a ‘fake’ Pycroft may be employed at his stock brokerage firm to keep a vast stock of valuable securities and be the safebreaker. Holmes and Watson subsequently learn that the stock brokerage has sustained an attempted robbery, but that the criminal had been captured, although the weekend watchman has been murdered. Beddington, the forger and cracksman, was the miscreant, masquerading as Pycroft. American railway bonds worth nearly £100,000 were taken, together with a large amount of scrip in mines and other companies, but the police recovered them from the would-be thief.

I thought about this story as an introduction into the topic of foundational nature of a Code of Conduct and why it is so important to a compliance program in general. A Code of Conduct should be used as way to capture the risks and the issues that the organization faces. These are the major concerns that the organization has in terms of the type of business it is in, where it is operating and other factors of that nature. Obviously, this can be a wide variety of things such as anti-corruption, anti-money laundering (AML), trade sanctions, anti-trust, anti-discrimination and harassment and a myriad of others.

Moreover, by capturing these major issues within a training experience that is delivered across the organization and to all employees, it helps to level set everybody within the company in terms of what are those issues. It literally puts them at the top of mind for the company as employees understand the highest risk areas they need to be focused on. Additionally, the Code of Conduct is a source of that information and also about where to go for more help. In many cases, a Code of Conduct will point to other policies or procedures or other resources that serve to provide the support that employees might need as they go about their day-to-day business. It can also help the speak up culture of an organization by providing information on internal reporting, a commitment to non-harassment going forward and a recitation of the company’s values.

One of the key themes of the 2020 Update was of the importance of a risk assessment for all aspects of your compliance program. Additionally, the 2020 Update made clear the relationship between risk assessment and Code of Conduct training going forward. A risk assessment informs the content of the company’s Code of Conduct itself by identifying the topics and the issues that relate to the risks that the organization faces.

When you consider Code of Conduct training as the foundation of all of the compliance training to be delivered within the organization; it becomes clear that everybody in the company needs to be familiar, even if only at a high level, with the risks that the company faces on a day-to-day basis. Through aligning Code of Conduct training with the results of the risk assessment, you can ensure that the right content and messaging is being presented as part of that foundational Code of Conduct training. Moreover, by using your risk assessment to pinpoint key areas for training, you can have both a more focused and more effective Code of Conduct training.

I hope you will join me tomorrow where I consider The Adventure of the Gloria Scott.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2020

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