“There are times that you can have the best [compliance] procedures in the world, but if people don’t understand them and they are not following them, then it doesn’t matter what your policies and procedures are.”
— Jay Dubow, Partner, Troutman Pepper
This week, we examine a batting situation within the Houston Astros to draw key compliance insights. Learn how one energy commodities trading firm reduced communications review through in-the-moment training. Hear from Jay Dubow on the importance of archiving communications and communicating policies and procedures to your employees.
Compliance Lessons from the World Series: Part 1 – Yordon Álvarez; Using Data and Employing Trust
Calling all sports fans! This article turns to this year’s World Series champions for… some compliance lessons? Yordan Álvarez hit a home run in the bottom of the seventh inning in game four that would win the Astros the game. But up to this hit, Álvarez had been having an abysmal time at the plate during the World Series. So what changed, and how does it tie into compliance? It involves information, data, and trust. Álvarez’s hitting coach looked at the performance data, returned to a time when he was hitting very well, and studied the tapes. Álvarez was initially unsure of his coach’s recommendation but was willing to accept the coaching and experiment with the advice to achieve a spectacular result. There are many lessons from this scenario that can be applied to compliance—dive into them here.
How to Reduce Communications Review
One of the most significant challenges for many firms is how communications require review because it’s time-consuming and not easily automated. How can communications review overwhelm be reduced? Simply put: software that provides training to prevent damage from being sent. Learn about a leading energy commodities trading firm that needed to reduce their communications review time, where they turned for help, and see results.
Keeping a Record: Managers Must Archive Communications to Avoid SEC Fines
Jay Dubow, a partner at Troutman Pepper who co-leads the firm’s Securities Investigations + Enforcement Practice Group, said the Securities and Exchange Commission is turning its attention to big investment firms, digging deeper and cracking down on major banks using clandestine or encrypted messaging apps that ensure only the sender and recipient can read communications—noting that “the key point is being able to archive the communications” to avoid a fine. Dubow discusses the importance of checking policies and procedures to make sure that firms make it clear that employees cannot use certain types of unapproved communication channels. Additionally, firms must train and confirm that employees fully understand and are putting these policies to practice.
