Red Flags Rising

Michael Huneke & Brent Carlson

Welcome to Red Flags Rising, where we examine how geopolitics and national security are reshaping corporate enforcement and compliance. In an era where “economic security” drives government intervention through increasingly strict and consequential export controls, economic sanctions, inbound and outbound investment restrictions, and tariffs, legacy mindsets and assessments of enforcement risk create liability pitfalls for the uninformed. Under the “high probability” standard driving this new enforcement playbook, spotting and effectively mitigating “red flags” has a new urgency. We will help you identify and understand the trends, key insights, and practical solutions that are essential to companies, boards of directors, c-suite management, and compliance professionals in these turbulent times.

  1. Pull, Push, Tap, Aim, Fire - What Recent Settlements and Indictments Teach about Clearing Compliance Jams

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    Pull, Push, Tap, Aim, Fire - What Recent Settlements and Indictments Teach about Clearing Compliance Jams

    Mike and Brent return to discuss lessons from Brent’s Aikido instructor and Marine Corps combat veteran Frank Doran and how those lessons can help trade compliance professional work through compliance jams. Mike and Brent discuss the enforcement wave that unfolded in March 2026 (01:28); their March 10, 2026, National Security Law & Enforcement event in New York City (01:51); how that event was designed to get to practical solutions (02:30); the need today to have a broader “compliance aperture” (03:59); the importance of effective communication up to management and boards, especially around “central compliance risks” (the standard under Delaware law) (04:37); Carole Basri’s prediction that soon many companies will have Chief National Security Officers (05:31); two significant enforcement actions from Q1 2026 (07:42); the DOJ National Security Division’s March 30, 2026, announcement regarding voluntary disclosures (11:37); two significant indictments from Q1 2026 (12:06); boards of directors’ duty of oversight when it comes to national security (13:39); the relevance of increased agitation from the U.S. Congress for more enforcement (18:39); the status of the proposed Remote Access Security Act (19:35); and what is the compliance path forward, including Brent’s Fraud Four Circle Framework (21:57). Mike and Brent then conclude with a special edition of Brent Carlson’s “Managing Up” about Frank Doran and the meaning and importance—to not only infantrymen but also compliance professionals—of “Pull, Push, Tap, Aim, Fire” (24:40). BIS enforcement actions: https://www.bis.gov/enforcement/export-violations DOJ NSD Voluntary Disclosure Policy (Mar. 30, 2026): https://www.justice.gov/opa/pr/reporting-voluntary-self-disclosures-violations-national-security-laws-under-department-wide More about Frank Doran: https://aikido-west.org/frank-doran Frank Doran, "Pull, Push, Tap, Aim, Fire" (1995): https://aikido-west.org/pull-push-tap-aim-fire Boards of Directors and the Duty of Oversight: "Boards of Directors Lovin’ It after McDonald’s? A Fresh Look at Directors’ Duty of Oversight in the New Era of Sanctions & Export Control Corporate Enforcement," NYU PCCE Blog (Jan. 12, 2024), https://wp.nyu.edu/compliance_enforcement/2024/01/12/boards-of-directors-lovin-it-after-mcdonalds-a-fresh-look-at-directors-duty-of-oversight-in-the-new-era-of-sanctions-export-control-corporate-enforcement/ Brent’s Fraud Four Circle Framework article: "A Light Shines Through the Darkness in Disputes, Investigations, and Trade Compliance: A Fresh Look at the Classic Fraud Triangle with the Fraud Four-Circle Framework℠," NYU PCCE Blog (Jan. 8, 2026), https://wp.nyu.edu/compliance_enforcement/2026/01/08/a-light-shines-through-the-darkness-in-disputes-investigations-and-trade-compliance-a-fresh-look-at-the-classic-fraud-triangle-with-the-fraud-diamond-framework-sm/

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  2. "Fallen Chips" - GIR's Estelle Atkinson on her Three-Part Report

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    "Fallen Chips" - GIR's Estelle Atkinson on her Three-Part Report

    Mike and Brent welcome Estelle Atkinson, a reporter with Global Investigations Review (GIR), to speak about her recent three-part series, “Fallen Chips,” published on January 26, 27, and 28, 2026 (linked in the show notes). They discuss how Estelle learned of the U.S. government investigation of Zenith Semiconductor in Chandler, Arizona (01:14); that company’s background (06:03); when employees started to realize that things were not quite right at the company and how that led to employees going to the FBI (08:19); how Estelle got to know the employees and why they were willing to help her with her story (10:30); how her experience illustrates more broadly the challenge companies have in responding to whistleblower reports or allegations (11:48); how diversion starts close to home, and is not always in some exotic “offshore” location (15:31); how U.S. administration policies to promote the export of the U.S. AI “stack” are not without controls or national security considerations (15:58); why success under America’s AI Action Plan and the American AI Export initiative will depend on effective, risk-based export controls compliance programs (16:21); the role of media in American life (19:14); why the standard PR or IR “playbook” of asserting “full compliance with the law” creates risks if companies aren’t expressly incorporating the full definition of “knowledge,” to include “an awareness of a high probability,” into export controls compliance (20:14); and what GIR readers can expect to see (or read) next from Estelle (20:49). Mike and Brent conclude with yet another installment of Brent Carlson’s “Managing Up” (22:39). GIR: https://globalinvestigationsreview.com/ Fallen Chips Part I: Inside the FBI Raid that Rocked an Arizona Chip Start-Up (Jan. 26, 2026): https://globalinvestigationsreview.com/just-sanctions/article/fallen-chips-part-i-inside-the-fbi-raid-rocked-arizona-chip-start Fallen Chips Part II: Silicon Secrets and the Risks Hiding in Plain Sight (Jan. 27, 2026): https://globalinvestigationsreview.com/just-sanctions/article/fallen-chips-part-ii-silicon-secrets-and-the-risks-hiding-in-plain-sight Fallen Chips Part III: The Fault Lines of the US-China Tech War (Jan. 28, 2026): https://globalinvestigationsreview.com/just-sanctions/article/fallen-chips-part-iii-the-fault-lines-of-the-us-china-tech-war More about Estelle: https://globalinvestigationsreview.com/authors/estelle-atkinson Contact Estelle: estelle.atkinson@globalinvestigationsreview.com Contact Brent: brent@redflagsrising.com Contact Mike: michael.huneke@morganlewis.com

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  3. Carole Basri on Subsidizing World Peace:  the U.S. Experiment, and the Dynamic Relationship between National Security & Corporate Compliance

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    Carole Basri on Subsidizing World Peace: the U.S. Experiment, and the Dynamic Relationship between National Security & Corporate Compliance

    Back in January 2024, Mike and Brent had the good fortune to meet Carole Basri at an event at NYU Law School. On this episode of Red Flags Rising, they welcome her as a guest to talk about her specialties: national security, geopolitics, and corporate compliance. They specifically discuss Carole’s extensive professional background (00:59), a new treatise on National Security Law that Carole, Mike, and Brent are writing for the Practising Law Institute (PLI) (04:00), an upcoming event co-hosted by the New York State Bar Association’s International Section, Corporate Compliance Committee and Morgan Lewis, to which the new Assistant Secretary for Export Enforcement David Peters is an invited keynote speaker (08:18), why public enforcement officials remarks are relevant under U.S. export controls and other probability-based (i.e., “red flags”-driven) national security laws (09:26), how the U.S. Foreign Corrupt Practices Act (FCPA) was not only an example of that but also was really a child of an era where economic interdependency required a level of transparency and clean commerce to continue (12:00), and the relationship between Bretton Woods, Belt and Road, and Mike’s favorite book, Tales of an Economic Hitman, and what could be viewed with hindsight as effectively a U.S. policy decision to trade its own economic security for decades of (relative) world peace, increased global productivity, and increased living standards (16:52). Brent then closes out the discussion with the latest installment of his “Managing Up” segment (21:57), after which Mike makes some (further) book recommendations based on the discussion for those interested in further exploring some of the idea and concepts covered during the discussion: Robert Lighthizer, No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers (2023), https://www.amazon.com/No-Trade-Free-Changing-Americas/dp/0063282135 John Perkins, Confessions of an Economic Hitman (1st ed. 2004, currently on the 3rd ed. 2023), https://a.co/d/0fdEyBAg W. Timothy Galloway, The Inner Game of Tennis (first published in 1972) (now a 50th anniversary edition is available), https://a.co/d/0hxybPKN Daniel Kahneman, Thinking Fast and Slow (2011), https://a.co/d/03Q0vF0M Michael Lewis, The Undoing Project (2016), https://a.co/d/09lcTL1M More about Carole: https://www.linkedin.com/in/carole-basri-038998/ Contact Brent: brent@redflagsrising.com Contact Mike: michael.huneke@morganlewis.com Interested in learning more about the March 10, 2026 event? Contact Mike & Brent at the email addresses above.

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  4. Origins & Parallels - The FCPA and U.S. Export Controls, Yesterday and Today, with Severin Wirz

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    Origins & Parallels - The FCPA and U.S. Export Controls, Yesterday and Today, with Severin Wirz

    Mike and Brent welcome author and compliance professional Severin Wirz to the pod to discuss his first book, Bribery Beyond Borders: The Story of the Foreign Corrupt Practices Act. They discuss with Severin his inspiration for writing the book (02:44), the book’s focus on the people and personalities involved in the events between 1975 and the 1977 passage of the FCPA (05:50), the political and geopolitical scandals that kept up the momentum for a law banning overseas bribery (06:59), what his research uncovered beyond the traditional FCPA origin story (10:49), the relevance of the Cold War to the FCPA’s passage—specifically how corruption by capitalists fed into Communist propaganda (12:39), how the political “sausage” was made (16:33), stories of personal courage and risk-taking that made the FCPA possible (18:27), the use of the phrase “post-Watergate morality” as a critique of the FCPA and other reform efforts (21:48), how anti-corruption laws actually help American companies competing for business overseas (29:21), where the FCPA stands today (31:17), and how corruption is a social construct that, to paraphrase former federal appellate judge and author himself John Noonan, to exist as a legal concept must first exist in the minds of everyday people (35:40). Mike and Brent then conclude with another installment of Brent Carlson’s “Managing Up” (38:14). Bribery Beyond Borders: The Story of the Foreign Corrupt Practices Act— Learn more at Corporate Compliance Insights here: https://www.corporatecomplianceinsights.com/bribery-beyond-borders-fcpa-severin-wirz/ Available at Amazon here: https://www.amazon.com/Bribery-Beyond-Borders-Foreign-Practices/dp/1735028592 More about Severin here: https://www.linkedin.com/in/severin-wirz-3574b574/ Contact Brent: brent@redflagsrising.com Contact Mike: michael.huneke@morganlewis.com

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  5. Introducing Brent Carlson's Fraud Diamond Framework (SM)

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    Introducing Brent Carlson's Fraud Diamond Framework (SM)

    Mike & Brent explore the classic “Fraud Triangle” of pressure, opportunity, and rationalization and discuss Brent’s creation of a new “Fraud Diamond Framework” (SM) to help trade compliance (and other) professionals who are looking not to explain past misconduct but instead to prevent future misconduct. They discuss recent news and developments in the export controls world (00:55), how seemingly inconsistent headlines are actually consistent with each other (04:05), and how Edward Fishman’s “impossible triad” concept continues to be a useful tool for understanding what’s happening in geopolitics and trade competition (06:22), and then they launch into their discussion of Brent’s Fraud Diamond Framework (SM) (08:05). Regarding the Fraud Diamond Framework (SM), they discuss the classic fraud triangle and the backward-looking perspective from which it was derived (09:18), and then explain the Fraud Diamond Framwork’s four elements of pressure (12:08), opportunity (13:06), something that’s too good to be true that comes at a critical time for the business (14:06), and signs of concealment (15:48). Brent next explains the Fraud Diamond Framework (SM) through a historical case study pulled from his own prior experience helping a client with a compliance commercial fraud dispute involving the acquisition of a business in China (17:35), after which they explain how the Fraud Diamond Framework (SM) can help trade compliance teams today (23:02). They conclude with another installment of Brent’s always popular “Managing Up” segment (24:43). Contact Brent: brent@redflagsrising.com Contact Mike: michael.huneke@morganlewis.com “Chokepoints: American Power in the Age of Economic Warfare” by Edward Fishman: https://a.co/d/3Phvprs Brent’s original NYU PCCE post, “When Loopholes Create Liability Pitfalls: A Fresh Look at Export Controls” (Aug. 25, 2023): https://wp.nyu.edu/compliance_enforcement/2023/08/25/29814/

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  6. Back to Basics

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    Back to Basics

    As the geopolitical and national political winds continue to swirl, Mike & Brent go back to basics to level-set and provide some foundational first principles of export controls compliance. They discuss the roller-coaster of the Affiliates Rule suspension (01:44); why the real risks from a compliance and enforcement perspective lay just outside of the Rule (02:37); how General Prohibition 10, the full definition of “knowledge” to include “an awareness of a high probability,” and the various inchoate provisions (i.e., causing, aiding and abetting, solicitation and attempt, conspiracy, acting with knowledge, misrepresentation and concealment, intent to evade, and failure to comply with recordkeeping requirements) are the foundational anti-diversion provisions under the U.S. Export Administration Regulations (EAR) (03:02); great listener feedback about how the Affiliates Rule shaped the in-house discussion of diversion risk (05:23); developing and implementing a high probability protocol as the only way to stay grounded in dynamic and challenging times (08:33); recent legislative proposals and hearings, including a recent hearing by a subcommittee of the House Foreign Affairs Committee focused on export controls loopholes, and the dangers of a dissatisfied U.S. Congress (09:42); why the definition of “knowledge” under the EAR is not mere legalese to be lost in the 1,467 pages (as of January 1, 2025) of the EAR but is instead the path forward for both government and industry (14:18); the details and implications of General Prohibition 10 (17:11); the details of the full definition of “knowledge,” including what we can learn from its history in the U.S. Foreign Corrupt Practices Act and, before then, the Model Penal Code (18:48); and recent enforcement activity by DOJ and BIS, and what the activity signals about the government’s next enforcement moves (22:30). They then conclude with the latest installment of Brent’s increasingly popular “Managing Up” segment (27:14). Contact Brent: brent@redflagsrising.com Contact Mike: michael.huneke@morganlewis.com Brent’s latest NYU Program on Corporate Compliance & Enforcement (PCCE) post, “From Peanuts to Elephant-Sized Penalties: A Fresh Look at Recent U.S. Export Controls Enforcement Developments & Future Trends” (Oct. 31, 2025): https://wp.nyu.edu/compliance_enforcement/2025/10/31/from-peanuts-to-elephant-sized-penalties-a-fresh-look-at-recent-u-s-export-controls-enforcement-developments-future-trends/

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  7. Don’t Wait for Godot - Seize Control with Your Own Compliance Clarity

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    Don’t Wait for Godot - Seize Control with Your Own Compliance Clarity

    Mike & Brent draw inspiration from the current Broadway run of Waiting for Godot starring Keanu Reeves and Alex Winter to suggest some first principals of risk-based export controls compliance to trade compliance teams. They discuss the futility of the oft-reported sentiment in the trade compliance press of wanting more or clearer guidance from the U.S. government about export controls risk management is not necessary, because the guidance is already here and the “high probability” standard offers a path forward (01:03); how the “high probability” standard and a return to anti-diversion first principles is a way to avoid a repeat of the compliance whipsaw effect occasioned by the announcement, then suspension, of the Affiliates Rule (a/k/a the 50% Rule) (03:47); how an example of this is focusing on your compliance and enforcement risks under General Prohibition 10 and the inchoate provisions of U.S. export controls (07:10); how neither the Affiliates Rule’s adoption nor its suspension changed GP10 or the other anti-diversion regulations under U.S. export controls (12:03); why efforts to comply with the Affiliates Rule were not wasted (14:23); how to deal with and overcome “compliance fatigue” in organizations (16:04); Brent’s latest NYU PCCE post (17:59); and why there was an over-focus on item-based classifications relative to knowledge-based end-use and end-user catch-all provisions and GP10 (19:17). They then conclude with a righteous installment of Brent Carlson’s “Managing Up” (21:36). “Waiting for Godot” starring Keanu Reeves and Alex Winter is currently playing at the Hudson Theater in New York City until January 4, 2026. For tickets: https://boxoffice.nyc.com/waiting-for-godot/13147/calendar/ Brent’s latest NYU Law School Program on Corporate Compliance & Enforcement post, from October 31, 2025: https://wp.nyu.edu/compliance_enforcement/2025/10/31/from-peanuts-to-elephant-sized-penalties-a-fresh-look-at-recent-u-s-export-controls-enforcement-developments-future-trends/ Brent’s email: brent@redflagsrising.com Mike’s email: michael.huneke@morganlewis.com

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حول

Welcome to Red Flags Rising, where we examine how geopolitics and national security are reshaping corporate enforcement and compliance. In an era where “economic security” drives government intervention through increasingly strict and consequential export controls, economic sanctions, inbound and outbound investment restrictions, and tariffs, legacy mindsets and assessments of enforcement risk create liability pitfalls for the uninformed. Under the “high probability” standard driving this new enforcement playbook, spotting and effectively mitigating “red flags” has a new urgency. We will help you identify and understand the trends, key insights, and practical solutions that are essential to companies, boards of directors, c-suite management, and compliance professionals in these turbulent times.