Compliance Bricks and Mortar for May 2

These are some of the compliance-related stories that recently caught my attention.

Kara Stein Takes On Mary Jo White in the Corporate Crime Reporter

In a 3 to 2 decision last week, Mary Jo White joined the SEC majority and overturned the automatic disqualification of the Royal Bank of Scotland from eligibility as a Well-Known Seasoned Issuer (WKSI)…
And out of left field comes a new SEC commissioner, one Kara Stein, to take on White and the SEC majority.

CCOs On the Hook: FinCEN Seeking Fine Against Moneygram CCO by Michael Volkov in Corruption, Crime & Compliance

Chief Compliance Officers should take notice – the Treasury Department’s Financial Crimes Enforcement Network is proposing to fine Moneygram’s Chief Compliance Officer for Moneygram’s failure to police transactions for illicit activity. The CCO faces a potential fine of up to $5 million.

SEC Enters into First Non-Prosecution Agreement with an Individual by David Smyth in Cady Bar the Door

One of the main questions I get from potential insider trading defendants is some variation of Well, what are we looking at here? That is, if the SEC is able to prove its case, what could the consequences be?  Unfortunately, the answer is usually that it depends on a lot of things.

Stock Promoter Charged with Fraud in Florida Real Estate Venture by Mark Astaria in the Securities Law Blog

The SEC’s complaint filed in U.S. District Court in the Southern District of Florida alleges that Robert J. Vitale defrauded investors in a Florida real estate venture, sold unregistered securities, and acted as an unregistered broker-dealer. Vitale and his firm Realty Acquisitions & Trust Inc. raised at least $8.7 million from investors, including many senior citizens. Vitale allegedly told investors their funds were “100% protected” when they were not, and he claimed to be a financial expert with a business degree from Notre Dame when he never attended college after graduating from Notre Dame High School in West Haven, Conn.

What Yoda Knows by Mary Abraham in Above and Beyond KM

“The fear of loss is a path to the Dark Side.”  This insight of Yoda’s can be read as a warning about many of our information management (or, more properly, information mismanagement) practices. The fear of loss of critical data or documents can lead to over-zealous security measures that hobble the reasonable flow of information inside and outside an organization. It also can lead to information hoarding by individuals or the desperate creation by KM personnel of ad hoc databases and document collections.