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October 23, 2015 at 04:52 AM
The Securities and Exchange Commission’s chief of staff, Andrew “Buddy” Donohue, is challenging chief compliance officers to be “proactive” by focusing on nine priorities, and quelling CCOs’ fears that their elevated roles will expose them to “increased personal liability.”
Donohue, the former director of the SEC’s Division of Investment Management, also told CCOs in a recent speech at the National Regulatory Service’s annual conference that despite their fears, the Commission “is not targeting — and has not targeted — compliance personnel.”
As SEC Chairwoman Mary Jo White has stated, he continued, “it is not our intention to use our enforcement program to target compliance professionals… Being a CCO obviously does not provide immunity from liability, but neither should our enforcement actions be seen by conscientious and diligent compliance professionals as a threat.”
He noted the SEC’s Office of Compliance Inspections and Examinations is using its Risk Analysis Examination Group to leverage technology in exams of clearing firms and large broker-dealers by analyzing transactions cleared by selected firms over a period of years and then is “using that data to identify potential problematic behavior across multiple firms, including unsuitable recommendations, misrepresentations, inadequate supervision, churning and reverse churning.”
