I don’t like compliance officers being dragged into enforcement actions. If they are involved in the wrongdoing or are just a wholesale failure at compliance, I understand the desire for regulators to take aim at a CCO. The charges against Michael Cohn as a CCO are extremely bad.
Mr. Cohn was the managing director and chief compliance officer at GPB Capital Holdings. Just prior to joining GPB he was compliance examiner at the Securities and Exchange Commission.
Mr. Cohn was charged with obstruction of justice and unauthorized access of a government computer for accessing information about an investigation into GPB. While talking with GPB for the CCP job , Mr. Cohn told GPB that he had inside information about the SEC’s investigation into the firm, according to an indictment filed in the U.S. District Court for the Eastern District of New York.
According to the Department of Justice press release, Mr. Cohn accessed information on SEC servers relating to an Enforcement Division investigation into GPB. During discussions with GPB personnel about obtaining a job there, Cohn advised them that he had inside information about the SEC’s investigation, and on several occasions he disclosed information to members of GPB’s senior management about that investigation.
Yeah, that’s bad.
Of course, Mr. Cohn is merely charged with crimes and has not an opportunity to defend himself from the charges.
But the indictment should serve as a warning not to engage in this type of bad behavior.
Sources:
- Cohn Superseding Indictment
- Managing Director and Chief Compliance Officer of Private Equity Firm Indicted for Obstruction of Justice
- Private-Equity Firm Compliance Chief Indicted for Sharing Materials From SEC Investigation
- Former SEC investigator charged with giving insider information to firm where he sought employment