Chief Compliance Officer group stated that their members are feeling vulnerable and are ready for more investigation and possible enforcement actions this year. Opposing to this development, SEC members argued that there is totally no change in the way they view compliance officers at money management companies. The founder and CEO of the Regulatory Fundamentals Group LLC, New York, said that regulators are not changing compliance officers’ role; they are instead willing to articulate their expectations about the role of compliance officers, which is to identify risks and facilitate the organization’s response.
Karen Barr, the President and CEO of the Investment Advisor Association in Washington, also had the same view as CCO Group’s. She said compliance officers are being skeptical. When a BlackRock (BLK) LLC compliance officers failed to disclose a top performing portfolio managers’ in April 2015, SEC charged them and they were fined $12 million. They also charged SFX Financial Advisory Management Enterprise Inc. with its compliance officer in June for failing to implement prevention policies on misappropriation of client assets. SFX and CCO Eugene Mason paid $150,000 and $25,000 respectively. Daniel Gallegher, the then commissioner, said things should have been done differently.
SEC enforcement director, Andrew Ceresney, justified their move by saying that most of the cases that SEC brings involve CCO’s that engage in affirmative misconduct or obstructing regulators, which is unacceptable. He said this in November during the National Society of Compliance Professionals. He added that the enforcement actions should in fact be appreciated because they demonstrate the need for cooperation and transparency within CCO firms but Mr. Gallagher did not agree with this position.
Ms. Prutzman indicated that the increasing scrutiny of money managers’ compliance programs will leave problems unchecked, as the upcoming investors will focus more on how to deal with the compliance program. Ms. Barr and Todd Cipperman of Cipperman Compliance Services in Wayne agreed to this position. This information was originally reported on PI Online as explained in the following link: http://www.pionline.com/article/20160111/PRINT/301119976/chief-compliance-officers-prepare-for-closer-sec-scrutiny
Helane Morrison is the managing director, general counsel and chief compliance officer of Hall Capital Partners LLC. Before joining the firm in 2007, where she was also a member of Executive Committee, she had headed the San Francisco Office of the U.S. Securities and Exchange Commission (SEC) from 1999 to 2007. She was in charge of securities enforcement, litigation and regulatory matters.
Morrison practiced law at the San Francisco law firm from 1986 to 1996. She was promoted to be a partner in 1991. Her studies focused on business litigation and defense of private securities. She is also a board member of the Regional Parks and a member of the hedge fund subcommittee of the American Bar Association. This information was mentioned on SF Gate.