Compliance Bricks and Mortar for May 21

It’s a day early because of the long weekend. If you’re looking to read some other compliance-related stories this weekend, these are some that recently caught my attention.

Former SEC Chairman Cox Weighs in on Administrative Proceedings by Bruce Carton in Compliance Week

On Wednesday, former SEC Chairman Christopher Cox offered his own interesting perspective on the SEC’s use of administrative proceedings. In his remarks at Securities Enforcement Forum West 2015 entitled, “The Growing Use of SEC Administrative Proceedings: An Historical Perspective from Congress and the Agency,” Chairman Cox pointed out that APs have now developed to the point that they often take the place of trials — despite bearing little resemblance to civil courts and their accustomed rules of civil procedure. This has occurred, Chairman Cox stated, through a combination of federal agencies using their rulemaking powers to maximum effect while Congress has remained largely absent from the discussion. […more]

The Importance of Effective Policy Writing for Compliance by Muhammad Talib Uz Zaman in Corporate Complaince Trends

Why it is imperative to have a clearly-written policy? Policy engagement starts with (effective) policy writing, which is the foundation for an effective code of conduct. A policy basically defines the general business guidelines by which the organization operates. Policy, as laid out in a clearly written code of conduct, establishes the compliance and ethics practices on an enterprise-wide level, which can be further distilled into procedures that define ongoing process of work. […more]

Ceresney Reviews SEC’s Successes with National Litigation Program by Jacquelyn Lumb in Jim Hamilton’s World of Securities Regulation

The SEC typically does not litigate cases where it has obtained the strongest evidence of wrongdoing, according to Ceresney. Those cases typically are brought by the criminal authorities or they settle on terms that are favorable to the Commission, he explained. Litigated cases tend to be those where the evidence is less clear, the law is unsettled, or the defendants are willing to spare no expense to clear their names, he advised. […more]

Compliance Wars: SEC and FINRA Disciplinary Actions Against Chief Compliance Officers and In-House Counsel in a Galaxy Not Too Far Away (.pdf) by Brian L. Rubin and Irene A. Firippis for Sutherland

Unfortunately, Chief Compliance Officers (CCOs) and in-house counsel for broker-dealers (BDs) or investment advisers (IAs) cannot call on this team of heroes or the sage Jedi Master Obi-Wan Kenobi when serving their roles. CCOs and in-house counsel are tasked with the challenge of advising their colleagues and helping to ensure that their firms comply with securities laws and regulations, without having the authority (or light sabers) to enforce their decisions or advice. The U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) might not watch over the galaxy, but both agencies carefully monitor and scrutinize the conduct of CCOs and in-house counsel. […more]

The Anti-Corruption Enforcement Problem by Kevin LaCroix in the D&O Diary

While the enforcement of anti-corruption laws is to be applauded, at the same time, questions are being asked about whether in at least some cases things might have come too far, as the enforcement process has become astronomically expense and time-consuming.

A May 9, 2015 Economist article entitled “Corporate Bribery: The Anti-Bribery Business” (here), as well as a leader article in the same issue (here), refers to what the magazine describes as “a mounting body of evidence that the war on commercial bribery is being waged with excessive vigor, forcing companies to be overcautious in policing themselves,” noting that “some under investigation are starting to fight back.” […more]

Credit Suisse dropped SEC waiver request amid opposition by Sarah N. Lynch in Reuters

The bank had applied for the waiver following its agreement last year to pay $2.5 billion to resolve criminal charges that it helped wealthy Americans evade U.S taxes. The criminal charges automatically triggered a federal law that deprives the bank for three years of the privilege of being known in the market as a “well-known seasoned issuer,” or WKSI. The designation lets public companies bypass SEC approval and raise capital “off the shelf” – a process that is speedier and more convenient. Failing to obtain the waiver will make it more costly and burdensome for Credit Suisse to sell shares and debt to the public. […more]

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