Enforcement heads from the SEC and Department of Justice kicked off Compliance Week 2016 in Washington D.C. this week, speaking candidly about compliance program effectiveness, personal liability, and much more.
As compliance officers increasingly are feeling the heat of personal liability, Andrew Weissmann, chief of the Fraud Section with the Justice Department’s Criminal Division, tried to ease those fears. The Justice Department’s jurisdiction is for criminal violations, he stressed during a keynote panel. “We are not going after compliance officers for criminal liability.”
Compliance officers will be found liable only in the rare instances where they are found to be complicit in the criminal conduct. “Our general view of compliance is that they are allies in the kind of work that we are trying to do, which is reduce the risk of criminality,” Weissman said.
Stephen Cohen, associate director of the SEC’s Division of Enforcement, reiterated the same message as Weissmann. Since 2003, the SEC has brought more than 8,000 enforcement actions, only five of which were brought against chief compliance officers, he said. “The point being is not only do we not target compliance officers, but we have very high criteria for charging them,” Cohen said.
“They are not being charged simply because they are a compliance officer; we do not come in and second guess the judgments of a compliance officer and second guess their actions,” Cohen added. In the rare cases where the SEC has charged compliance officers, he said, it’s because those individuals were responsible for causing the firm’s compliance failures that lead to misconduct in the first place.
Full coverage on this keynote will appear in next week’s online edition of Compliance Week.