The personal liability a Chief Compliance Officer has come under scrutiny as many of us struggle to stay informed and engaged as the new developments within the regulatory landscape continues to shift.
Most recently, the Commodity Futures Trading Commission (CFTC) Commissioner Caroline Pham brought landmark charges against the former CCO of Binance, the first instance of charging a CCO with individual liability by the CFTC. In March 2020, the Treasury Department’sFinancial Crimes Enforcement Network (“FinCEN”) also assessed a civil penalty against a CCO of US Bank for failing to prevent BSA/AML compliance program failures.
Currently there is no guidance on standards where the regulatory bodies differentiate between honest mistakes and willful misconduct. The National Society of Compliance Professionals (NSCP) has submitted a suggested framework to the SEC that outlines the responsibilities of regulators, CCOs, and firms. But until standards have been adopted and formalized, instances of CCO personal liability will increase.
So, have you asked yourself as a CCO, how do I prove I am reasonably doing everything I can so that the firm can ensure compliance? And further, how am I evidencing my efforts? Does my current technology (or lack thereof) hinder my compliance plan overall?
Avery by RegVerse can provide you with one platform to automate regulatory compliance. Take the guesswork out of your annual compliance processes while creating efficiencies that will prove you are working diligently to carry out your compliance responsibilities.
Avery byRegVerse combines human expertise with advanced AI for transparent, secure, and responsible regulatory management. We can't wait to help you get started! Your first step is to schedule a free strategy call. In your intro call, we'll dive into your specific compliance needs and objectives. After that, we'll set up your tailored dashboard, putting you on the fast track to streamlined compliance management. To book your free strategy call, click here.
Key Terms: Liability, CCO, Compliance Officer Liability
SEC.gov| 2015 National Society of Compliance Professionals, National Conference:Keynote Address
FinCENImposes Its First Penalty on a Bank Compliance Officer for $450,000 for Failing to Prevent AML Violations | Paul, Weiss (paulweiss.com)
Understanding the Evolving Landscape of CCO Liability — National Society of ComplianceProfessionals | NSCP | Financial Services Compliance Membership Nonprofit |NSCP National Conference
CFTC’sCaroline Pham: ‘There will likely be more’ CCOs charged with individual liability | Compliance Week