REGULATORY COMPLIANCE, FINES AND PENALTY ANALYSIS

Local, state or federal governments and their representative agencies regulate many of the environments in which ARPC consults. It has been our experience that regulatory agencies may not always be correct in their allegations and that their conclusions may be based on misleading statistics or invalid samples. We frequently assist our clients in determining whether the actual violation occurred by reviewing the government agency findings and initial reports, and if the violation did occur, evaluating the appropriate penalty and damage estimate. The penalties and fines levied by these agencies are often either not warranted or are disproportionate to the magnitude of the actual economic loss. It is also not uncommon that the actual fine or penalty for one business is inconsistent with similar fines or penalties other businesses have received in the past. ARPC consultants have significant experience in analyzing and determining appropriateness of governmental fines and penalties.

ARPC also has significant experience in tax law changes and valuing the economic impact of the proposed changes on various entities. We have assisted numerous industry special-interest groups, states and foreign countries in valuing the economic impact of proposed tax-law changes. We have developed models based on stratified random samples taken from large databases of individual tax returns. Our models compute the revenue implications of alternative tax structures and economic forecasts. We also assist in valuing projected tax revenues that are relied upon in budgetary decision processes. Our work has also been utilized by various lobbying groups in support or opposition of proposed tax changes.

Generally, ARPC’s focus in regulatory compliance is in the following areas:

• Credit and fair-lending issues

• Environmental

• Employment/labor

• Consumer product issues

• Tax-law changes

• Regulatory fines and penalty analysis

• Expert testimony

Representative engagements:

• A regulatory agency recalled a product from our client, a large automobile manufacturer, due to an alleged failure. We analyzed the regulatory agency’s statistical sample and concluded that it was not valid and produced erroneous results. We then assisted our client with the design and implementation of a valid statistical sample and shared our favorable results with the regulators. Based upon our findings, the regulators concluded that the product did not need to be recalled.

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