On June 30, 2022 the Securities and Exchange Commission (SEC) brought a settled enforcement case against a Chief Compliance Officer (CCO) and a Registered Investment Adviser (RIA). At first glance, the case appears straightforward. As the layers of the onion are peeled off, the case is far more confusing, and it screams for a framework to see whether the SEC alleged sufficient facts to charge and sanction the CCO and to provide guidance to other CCOs going forward. Luckily for us, on January 10, 2022, the National Society of Compliance Professionals (NSCP) issued its “Firm and CCO Liability Framework,” which NSCP drafted to “provide guidance to regulators, CCOs, and firms regarding perceived or actual CCO liability.”
Originally published in NSCP Currents – August 2022.
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