“Companies should feel empowered to do the right thing—to invest in compliance and culture, and to step up and own up when misconduct occurs.”
— General Lisa O. Monaco, Deputy Attorney, United States Department of Justice
This week, we explore why it is crucial for compliance professionals within financial service firms to demonstrate their abilities with new technologies to meet regulatory requirements. Discover five compliance tips for handling electronic client communications put together by attorneys specializing in broker and advisor regulatory issues. Also, learn how the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) promote parallel objectives regarding individual accountability, timely disclosure, and more—and what it means for your organization.
It’s Time for Compliance Department Professionals to Become Technologists
Expanding governance, risk, and compliance responsibilities into new technology-related areas beyond traditional functions creates a new burden for financial service firms’ compliance departments and places new demands on compliance professionals’ skills. The intersection of compliance with tech has created a need for expertise and coordination across firms while involving artificial intelligence, big data, data privacy, cybersecurity, and algorithmic trading, to name just a few. Financial service firms must now fully integrate these technologies and demonstrate that the activities employing them meet regulatory requirements. It has become essential for compliance professionals to understand how the technologies work and their limitations and vulnerabilities. Compliance departments need to take steps that include technical coordination across the company, embedding technologists within compliance teams, or increasing the tech skills of individual compliance professionals.
5 Compliance Tips for Handling Electronic Client Communications
A few recent high-profile enforcement cases have likely caused advisors and brokers to take their compliance responsibilities around electronic communications seriously. It is a big challenge to determine how to handle compliance when messaging apps are multiplying and becoming the preferred method of communication channel for advisors and clients. Attorneys specializing in broker and advisor regulatory issues at the law firm Eversheds Sutherland have put together a five-point compliance blueprint to help firms get started.
DOJ and SEC Tout Parallel Objectives Regarding Individual Accountability, Timely Disclosure, and More
On September 15, 2022, Deputy Attorney General Lisa A. Monaco gave a memorandum that clarified a series of DOJ objectives regarding corporate and individual responsibility that parallel recent statements from leaders in the Division of Enforcement at the SEC. The current SEC demands stronger gatekeeper accountability, early cooperation with enforcement proceedings, individual financial punishment, and penalties that proportionately address recidivism. This coordinated, dual threat of enforcement by both the DOJ and SEC suggests that companies should refine their compliance programs and front-load their internal investigations to facilitate timely and complete disclosure of information that pertains to individual conduct. Learn more about these dual objectives and the six steps organizations should take to answer them.
