On 4 November 2015, Andrew Ceresney, Director of the SEC’s Enforcement division, delivered a speech that focused on the following areas:
- recent cases that emphasise the importance placed on compliance personnel receiving the resources, cooperation, and transparency from the firm’s business personnel they require to do their job. Mr Ceresney listed numerous questions he finds predict the likelihood of an enforcement action being taken, including whether: compliance personnel are included in critical meetings; their views are typically sought or followed; the compliance department is viewed as an important partner in the business or rather as a support function or cost center; and, compliance are given the personnel and resources necessary to fully cover the entity’s needs.
- Rule 206(4)-7 under the Investment Advisers Act of 1940; and
- the circumstances in which the Commission charges chief compliance officers (CCOs). Mr Ceresney found these largely fall within three categories: (1) CCOs who are affirmatively involved in misconduct that is unrelated to their compliance function; (2) CCOs who engage in efforts to obstruct or mislead the Commission staff; and (3) CCOs who have exhibited a wholesale failure to carry out his/her responsibilities.
Despite the above comments, reassuringly Mr Ceresney stated that compliance professionals “… have the Commission’s full support. We rely on you as essential partners in ensuring compliance with the federal securities laws and we will do all we can to help you perform your work.”