Regulatory Non-Compliance

Anti-trust or anti-competition violations occur when a subject engages in practices that unfairly restrict or distort market competition, violating laws designed to protect free market competition. These violations can involve a range of prohibited actions, such as price-fixing, market division, bid-rigging, or the abuse of dominant market position. Such behavior typically aims to reduce competition, manipulate pricing, or create unfair advantages for certain businesses or individuals.

Anti-competition violations may involve insiders leveraging their position to engage in anti-competitive practices, often for personal or corporate gain. These violations can result in significant legal and financial penalties, including fines and sanctions, as well as severe reputational damage to the organization involved.

Examples of Anti-Trust or Anti-Competition Violations:

• A subject shares sensitive pricing or bidding information between competing companies, enabling coordinated pricing or market manipulation.
• An insider with knowledge of a merger or acquisition shares details with competitors, leading to coordinated actions that suppress competition.
• An employee uses confidential market data to form agreements with competitors on market control, stifling competition and violating anti-trust laws.

Regulatory Framework:

Anti-trust or anti-competition laws are enforced globally by various regulatory bodies. In the United States, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) regulate anti-competitive behavior under the Sherman Act, the Clayton Act, and the Federal Trade Commission Act. In the European Union, the European Commission enforces anti-trust laws under the Treaty on the Functioning of the European Union (TFEU) and the Competition Act.

Export violations occur when a subject engages in the unauthorized transfer of controlled goods, software, technology, or technical data to foreign persons or destinations, in breach of applicable export control laws and regulations. These laws are designed to protect national security, economic interests, and international agreements by restricting the dissemination of sensitive materials and know-how.

Such violations often involve the failure to obtain the necessary export licenses, misclassification of export-controlled items, or the improper handling of technical data subject to regulatory oversight. The relevant legal frameworks may include the International Traffic in Arms Regulations (ITAR), Export Administration Regulations (EAR), and similar export control regimes in other jurisdictions.

Insiders may contribute to export violations by sending restricted files abroad, sharing controlled technical specifications with foreign nationals (even within the same organization), or circumventing export controls through the use of unauthorized communication channels or cloud services. These actions are considered violations regardless of the recipient’s sanction status and may occur entirely within legal jurisdictions if export-controlled information is shared with unauthorized individuals.

Export violations are distinct from sanction violations in that they pertain specifically to the nature of the goods, data, or services exported, and the mechanism of transfer, rather than the status of the recipient.

Failure to comply with export control laws can result in civil and criminal penalties, loss of export privileges, and reputational damage to the organization.

Sanction violations involve the direct or indirect engagement in transactions with individuals, entities, or jurisdictions that are subject to government-imposed sanctions. These restrictions are typically enforced by regulatory bodies such as the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the United Nations, the European Union, and equivalent authorities in other jurisdictions.

Unlike export violations, which focus on the control of goods and technical data, sanction violations concern the status of the receiving party. A breach occurs when a subject facilitates, authorizes, or executes transactions that provide economic or material support to a sanctioned target—this includes sending payments, delivering services, providing access to infrastructure, or sharing non-controlled information with a restricted party.

Insiders may contribute to sanction violations by bypassing compliance checks, falsifying documentation, failing to screen third-party recipients, or deliberately concealing the sanctioned status of a partner or entity. Such conduct can occur knowingly or as a result of negligence, but in either case, it exposes the organization to serious legal and financial consequences.

Regulatory enforcement for sanctions breaches may result in significant penalties, asset freezes, criminal prosecution, and reputational damage. Organizations are required to maintain robust compliance programs to monitor and prevent insider-driven violations of international sanctions regimes.

Training should equip employees to recognize manipulation tactics, such as social engineering and extortion, that are used to coerce actions and behaviors harmful to the individual and/or the organization. The training should also encourage and guide participants on how to safely report any instances of coercion.

Provide a process for all staff members to report concerning and/or suspicious behaviour to the organization's security team for review. An internal whistleblowing process should take into consideration the privacy of the reporter and the subject(s) of the report, with specific regard to safeguarding against reprisals against reporters.

Financial auditing independently reviews financial records to ensure accuracy and compliance, detecting irregularities and evaluating internal controls. It protects against abuse by identifying fraud and deterring dishonest behavior through increased accountability.

Microsoft's Purview portal has a feature named Audit that permits access to critical audit log event data to gain insight and further investigate user activities. This can be used to investigate activity from a range of Microsoft services, such as SharePoint, OneDrive, and Outlook. Searches can be scoped to a specific timeframe, user account, and platform using the extensive filters available. 

Implement User Behavior Analytics (UBA) tools to continuously monitor and analyze user (human) activities, detecting anomalies that may signal security risks. UBA can track and flag unusual behavior, such as excessive data downloads, accessing a higher-than-usual number of resources, or large-scale transfers inconsistent with a user’s typical patterns. UBA can also provide real-time alerts when users engage in behavior that deviates from established baselines, such as accessing sensitive data during off-hours or from unfamiliar locations. By identifying such anomalies, UBA enhances the detection of insider events.