SEC Commissioner Daniel M. Gallagher talked Monday about the expanded role of compliance professionals in the securities industry.
Instead of focusing on the “scoundrels in the industry,” he talked about the “folks from the other end of the spectrum.”
And he dubbed the Dodd-Frank Act the “Compliance Officer and Securities Attorney Full Employment in Perpetuity Act of 2010.”
Gallagher said securities firms have been spending more on compliance, but budgets have lagged behind the demands on compliance officers.
He said the SEC does everything in its power to encourage an effective compliance function, such as using its authority to impose “failure to supervise” liability on those with responsibility for employees committing securities law violations.
But the SEC doesn’t want compliance officers and in-house counsel to draft policies and then stay isolated from others in their firms to avoid failure to supervise liability.
Gallagher wants the SEC to be clear about its position regarding supervisory liability for legal and compliance professionals. He referred listeners to the FAQs the SEC issued in September for more guidance.
SEC Commissioner Gallagher’s May 12, 2014 speech can be found here.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.
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