The SEC’s new Chair, Mary Jo White, made headlines last week by letting compliance officers know how important their role is to their organizations and to the SEC.
As she said: “It is, in short, you who set the bar, provide the expert guidance, and serve as the example for everyone. So for us at the SEC, the question is not, ‘Who do we rely on most heavily to ensure compliance with the rules?’ Because we know it is you.”
She also proudly pointed to its first-ever prosecution this year of an investment company for obstructing its compliance officer.
The joint DOJ and SEC Guidance for the FCPA has the same fundamental requirements for compliance programs. The Guidance (page 40-41) says internal controls violations leading to improper books and records will be prosecuted. Is there any bigger failure of internal controls than obstruction of the compliance officers who run the whole compliance program?
A draft letter to the SEC and DOJ about Wal-Mart brought comments from compliance officers from many countries. COs in the United States, as well as Mexico, Brazil, China, and India — regions affected by the Wal-Mart investigation — want to see real protection from wide-spread retaliation or harassment that can only come through better action by the enforcement agencies.
I’ll post a final letter on the FCPA Blog soon, encouraging the DOJ and SEC to extend best-ever protection to under-recognized compliance officers. They can do this by shaping the Wal-Mart investigation and settlement.
If readers would like to participate, please send me your answer to this question: Do you want to see the SEC and DOJ provide better protections for compliance officers working in the United States and abroad?
Michael Scher is a contributing editor of the FCPA Blog. He has over three decades of experience as a senior compliance officer and attorney for international transactions. He is affiliated with ethiXbase, the owner of the FCPA Blog. He can be contacted here.