82 Journal of Regulatory Compliance Issue II
deserved the consequences they received.310 There are also times where the
SEC uses the safe harbor they created to dismiss allegations against a CCO
when he or she was intentionally misled.311 None of these instances,
however, take away from the cases where CCOs were unfairly prosecuted;
cases where the CCOs did not have the resources or authority to make
decisions and cases where they had no idea they could be considered a
supervisor. These cases paint a precarious world for compliance officers
filled with traps and punishment without incentive.
As a CCO, would you have known for sure that an experienced con man
was lying to you about his account?312 Would you have accused the President
of the company of stealing just because you did not have access to review
those accounts, knowing it could easily be a career-ending move at that
company?313 If you were a smart, successful compliance or legal
professional, would you take a job as a CCO with the uncertainty of what
may cause you to be personally liable for someone else’s behavior that is out
of your control? It is the hesitation that accompanies this last question that
exemplifies the sentiment that the federal government’s recent enforcements
against CCOs has crossed the line and will push good compliance officers
out of the industry.
310. OMNI, supra note 172, at 3.
311. Guide to Broker-Dealer Registration, supra note 91.
312. CRI, supra note 3, at 4–5.