In most workplaces, a mistake or an oversight can cost someone in a management role a client, can result in a berating from a more senior boss, and may even be cause for termination. In the financial industry, a problem that occurred on a compliance officer’s watch may lead to something more impactful—a disciplinary proceeding that could be career ending.
That is the situation if the person under review is a compliance professional at a broker-dealer, and the regulator is the Financial Industry Regulatory Authority (FINRA). The U.S. Securities and Exchange Commission and FINRA currently have different approaches to treating those individuals who act as Anti-Money Laundering, Legal and Compliance Officers (hereinafter jointly referred to as CCO). The SEC requires as a threshold matter that the CCO had supervisory responsibility over other individuals. FINRA, on the other hand, is satisfied if the individual has supervisory responsibilities over businesses or program areas that had failures even if the person was not an actual supervisor.
SEC and Failure to Supervise
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