The Debate on Enforcements Against Chief
Erica Skoczylas, M.J.*
It has been a long week, month, or, depending on what is happening in the
company, maybe even a long year; sometimes there are family or personal
issues or even department budget cuts because compliance does not make
money for the company. Generally, you have been doing a pretty good job
so far as the chief compliance officer (“CCO”). You start to feel like there
are finally sound policies in place. There are a few managers, however, who
have put you in your place that certain things are above your pay grade. But,
overall, the auditing that is being performed should catch anything that could
be going on. 1
There are always employees who think the rules do not apply to them. 2 If
they bring in enough money, 3 you get told not to worry so much about their
behavior. You know there could be a conflict of interest with the outside
activity by one of the company’s best portfolio managers, but you do not have
a strong case. 4 Besides, the results would have to be negative for a conflict
of interest, right? 5 You tell yourself that you are not the boss, and you can
only give guidance to people. After all, you do not have any direct reports.
If the company thinks that a person is worth keeping, then you just keep doing
the best you can do with what you are given. 6
* Adjunct Faculty Instructor, Moraine Valley Community College. Ms. Skoczylas graduated
from Loyola University Chicago School of Law with her M.J. in 2015.
1. In the Matter of SFX Financial Advisory Management Enterprises, Inc., U.S. Sec. &
Exch. Comm’n, Admin. Proc. File No. 3-16591, at 2–3 (June 15, 2015),
https://www.sec.gov/litigation/admin/2015/ia-4116.pdf [hereinafter SFX].
2. In the Matter of BlackRock Advisors, LLC, U.S. Sec. & Exch. Comm’n, Admin. Proc.
File No. 3-16501, at 2 (Apr. 20, 2015), https://www.sec.gov/litigation/admin/2015/ia-
4065.pdf [hereinafter BlackRock].
3. See Dep’t of Enf’t v. Cantone Research Inc., Fin. Indus. Reg. Auth., Disciplinary
Proc. No. 2009020383002, at 6 (Feb. 22, 2012),
http://disciplinaryactions.finra.org/Search/ViewDocument/69073 [hereinafter CRI].
4. BlackRock, supra note 2, at 2.