SEC Commissioner Says CCOs Should Protect Investors
In a recent speech, SEC Commissioner Luis Aguilar said that compliance personnel should focus on “doing the right thing” on behalf of investors. He said that the compliance program should focus on investor protection as a way to protect the firm’s business. He explained that “the reputational harm to your business” from compliance failures and violations “may be more severe” than any sanctions imposed by regulators.
OUR TAKE: This is somewhat of a reprise of a speech Mary Schapiro gave a few years ago (See http://blog.cipperman.com/2009/03/11/schapiro-calls-for-compliance-officers-to-lead-new-era-of-responsibility.aspx.) The compliance rules (206(4)-7 and 38a-1) require compliance programs to be reasonably designed to prevent violations of the securities laws. The rules do not require compliance officers to ensure that the policies and procedures are designed to protect investors. Protecting investors suggests a higher degree of responsibility on compliance officers to assist the SEC with its own investor protection mission.