In response to the article two weeks ago entitled “One CCO Sanctioned, Another Not, in SEC Enforcement Actions” (click here to access), Felix Dashevsky, the General Counsel of Five Rings LLC, wrote, “The recent rise in the actions against CCOs (cf, eg, SFX CCO Eugene Mason case) has been concerning as it blurred the line between traditional advisory role of compliance officers with supervisory roles typically reserved for senior management. In these cases, CCO’s ‘supervision’ liability seems to extend to the entire organization, and be predicated on standards that border on strict liability. This raised a specter of ‘gatekeepers’ being liable for malfeasance of principals regardless of precautions they took, a perverse result. Even against this backdrop, however, the Judy Wolf decision goes too far the other way. A compliance officer found to have intentionally altered documents in anticipation of a regulatory review breaches the core traditional function of compliance, or, frankly, of any function. To impose no sanction here shows the lack of standards or rationality in the rule-making and adjudication. As I have stated previously, what is needed is a ‘business judgment rule’ for CCOs. In such a universe, Mr. Mason would not be charged, as he likely acted in good faith with reasonable care, whereas Ms. Wolf would be guilty, as she was found to have had neither.”