These are some of the compliance-related stories that recently caught my attention.
Reasonableness Pants
Commissioner Hester M. Peirce
A strong enforcement program requires us—to draw from the admonition a judge recently gave to us in a matter before her—to “put on [our] reasonableness pants.” The SEC ought always to wear reasonableness pants, and I would like to talk today about what those reasonableness pants look like on a regulator.
https://www.sec.gov/news/speech/speech-peirce-050819
Rise of the No Men
The Economist
But pity not finance’s in-house policemen, for they have had a golden decade since the crisis. While swathes of banking have laboured under cutbacks and stiff capital requirements, their headcount and clout have grown. Banks fined for aiding corruption, money-laundering and sanctions-busting have beefed up their compliance, risk, legal and internal-audit teams. Compliance officers will never be the rock stars of finance, but they have moved from drums to rhythm guitar. And though some banks hint at having reached “Peak Compliance”, staffing and investment are likely to remain well above pre-crisis levels.
https://www.economist.com/finance-and-economics/2019/05/02/the-past-decade-has-brought-a-compliance-boom-in-banking
Wells Fargo creates new unit focused on regulatory compliance
Imani Moise
Reuters
The new unit, whose creation was reported earlier on Wednesday by the Financial Times, will be charged with working through the more than a dozen regulatory consent orders the bank is operating under – agreements between regulators and the bank that it will work to satisfy certain requirements. It will also implement new business and risk-management processes.
https://www.reuters.com/article/us-wells-fargo-risk/wells-fargo-creates-new-unit-focused-on-regulatory-compliance-idUSKCN1SE2U5
How We Howey
by Hester M. Peirce, U.S. Securities and Exchange Commission
Harvard Law School Forum on Corporate Governance and Financial Regulation
While Howey has four factors to consider, the framework lists 38 separate considerations, many of which include several sub-points. A seasoned securities lawyer might be able to infer which of these considerations will likely be controlling and might therefore be able to provide the appropriate weight to each. Whether the framework gives anything new to the seasoned securities lawyer used to operating in the facts and circumstances world of Howey is an open question. I worry that non-lawyers and lawyers not steeped in securities law and its attendant lore will not know what to make of the guidance. Pages worth of factors, many of which seemingly apply to all decentralized networks, might contribute to the feeling that navigating the securities laws in this area is perilous business. Rather than sorting through the factors or hiring an expensive lawyer to do so, a wary company may reasonably decide to forgo certain opportunities or to pursue them in a more crypto-friendly jurisdiction overseas.
https://corpgov.law.harvard.edu/2019/05/13/how-we-howey/
Oh Come On, CFTC…
By Matt Kelly
Radical Compliance
Well this takes the whistleblowing cake: the Commodities & Futures Trading Commission is promoting its whistleblower program at a cryptocurrency conference in New York this week, complete with a booth in the hallway and free CFTC whistles handed out to attendees.
http://www.radicalcompliance.com/2019/05/14/oh-good-lord-cftc/
Five Good Reads for Compliance Professionals
by Kitty Holt
SCCE’s Compliance & Ethics Blog
- The Lucifer Effect: Understanding How Good People Turn Evil by Philip Zimbardo….
- Dying Out Here Is Not An Option by John Connelly….
- The Forger’s Spell: A True Story of Vermeer, Nazis, and the Greatest Art Hoax of the Twentieth Century by Edward Dolnick….
- Whistleblower by Amy Block Joy…
- Why We Sleep: Unlocking the Power of Sleep and Dreams, by Matthew Walker, PhD. …
https://profile.pmc.org/DC0176