These are some of the compliance-related stories that recently caught my attention.
How to Ace Compliance Interviews: Advice for the Next Generation of Compliance Officers
by Mary Shirley
Corporate Compliance Insights
Your hard work tailoring applications to the job and company has paid off and you’ve been invited to interview. Congratulations on being shortlisted! How do you increase your chances of clinching an offer? Here are share some tips for how to maximize this opportunity to shine and avoid common issues experienced in the interview process that may detract from your talents.
https://www.corporatecomplianceinsights.com/advise-compliance-interviews/
The Problem of Algorithmic Corporate Misconduct
by Mihailis E. Diamantis
NYU Law’s Compliance & Enforcement
Technology will soon force broad changes in how we conceive of corporate liability. The law’s doctrines for evaluating corporate misconduct date from a time when human beings ran corporations. Today, breakthroughs in artificial intelligence and big data allow automated systems to make many business decisions like which loans to approve,[1] how high to set prices,[2] and when to trade stock. [3] As corporate operations become increasingly automated, algorithms will come to replace employees as the leading cause of corporate harm. The law is not equipped for this development. Rooted in an antiquated paradigm, the law presently identifies corporate misconduct with employee misconduct. If it continues to do so, the inevitable march of technological progress will increasingly immunize corporations from most civil and criminal liability.
https://wp.nyu.edu/compliance_enforcement/2019/09/16/the-problem-of-algorithmic-corporate-misconduct/
Accounting Firms, Private Funds, and Auditor Independence Rules
by David E. Wohl
Harvard Law School Forum on Corporate Governance and Financial Regulation
The SEC recently charged a large public accounting firm (Accounting Firm) with violations of its auditor independence rules (Independence Rules) in connection with more than 100 audit reports involving at least 15 audit clients, including several private funds. [1] According to the SEC’s order, the Accounting Firm represented that it was “independent” in audit reports issued on the clients’ financial statements. However, the SEC found that the Accounting Firm or its affiliates provided prohibited non-audit services to affiliates of those audit clients (including to portfolio companies of the private funds), which violated the Independence Rules. The prohibited non-audit services included corporate secretarial services, payment facilitation, payroll outsourcing, loaned staff, financial information system design or implementation, bookkeeping, internal audit outsourcing and investment adviser services. The SEC also found that certain of the Accounting Firm’s independence controls were inadequate, resulting in its failure to identify and avoid these prohibited non-audit services.
https://corpgov.law.harvard.edu/2019/09/18/accounting-firms-private-funds-and-auditor-independence-rules/
Financial planners join battle over SEC’s Regulation BI
by Mark S. Nelson, J.D.
Jim Hamilton’s World of Securities Regulation
XYPN’s complaint, filed in the federal court in the Southern District of New York, tells a remarkably similar story to the complaint by eight state attorneys general filed days earlier. Both complaints lament that the distinctions between investment advisers and broker-dealers have become increasingly blurred and that Regulation BI does little to clarify those differences. Both complaints note that a majority of the Commission, in adopting Regulation BI, disregarded the recommendation of SEC staff who conducted the Dodd-Frank Act-mandated study that the Commission impose a uniform fiduciary duty without regard to the financial interests of a broker-dealer.
https://jimhamiltonblog.blogspot.com/2019/09/financial-planners-join-battle-over.html