68 Journal of Regulatory Compliance Issue II
property.165 Twenty years of imprisonment may be awarded or both the fine
and prison sentence can be awarded.166 Similarly anyone who attempts to
transfer monetary instruments between separate countries, with the same
intent and knowledge referenced above will be held to the same punishments
Section 1957 of the Money Laundering and Control Act prohibits the
“engaging in monetary transactions in property derived from specified
unlawful activity.”168 While the court may impose an alternate fine of twice
the amount of property that was obtained from criminal activity,169 the
punishment under this section is a fine determined under Title 18 or
imprisonment for up to ten years, or both.170 A monetary transaction can be
a deposit, withdrawal, or transfer that affects both commerce between states
and foreign countries.171
With a basic understanding of the applicable financial statutes and rules,
several cases now will be considered to enumerate the trend in financial
enforcements against CCOs. As with all good arguments, both sides must be
considered to achieve a fair analysis. There are times where CCOs are doing
a disservice to the compliance profession by committing illegal and wrongful
acts in their roles; however, some recent cases send a chill through good-
hearted, law-abiding compliance professionals everywhere.
A. OMNI Investment Advisers Inc.
In 2011, the SEC charged OMNI Investment Advisors Inc. (“OMNI”)
under Sections 203(e) and 203(k) of the Investment Advisers Act of 1940
and Section 9(b) of the Investment Company Act of 1940.172 Gary R.
Beynon, the CCO, (“Beynon”) was also charged under Sections 203(f) and
203(k) of the Advisers Act, Section 9(b) of the Investment Company Act,
168. Id. § 1957.
172. In the Matter of OMNI Investment Advisors Inc., U.S. Sec. & Exch. Comm’n, File
No. 3-14643, at 1 (Nov. 28, 2011), https://www.sec.gov/litigation/admin/2011/34-65837.pdf