As the federal government shutdown continues, firms must still navigate their regulatory compliance requirements absent a fully functional SEC. Featured with exclusive quotes in the Compliance Week story, FrontLine Compliance Founder and President Amy Lynch emphasizes that necessary information flow from firms to the SEC should continue despite the shutdown. This includes regulatory filings, disclosure requirements, and enforcement matters. Without SEC staff to conduct reviews, she advises firms to stay on top of filings, ensuring they are timely and accurate so that when the SEC reopens, problems do not arise later. Companies in the midst of an IPO will need to decide if they have appropriately addressed any SEC comments on disclosures while weighing the risks of proceeding. Ms. Lynch cautions that moving ahead with an IPO in the current environment could expose a company to future regulatory issues or lawsuits if evaluations were not accurate, corners were cut on disclosures, or other violations were committed. Finally, for SEC enforcement actions underway but now on hold, she explains that a good approach for firms while they wait is to thoroughly remediate any infractions and prepare answers to complaints. She adds that firms can use the “down” time to their advantage by correcting items and getting their compliance program in order. The lack of an active oversight body should not be an invitation to get sloppy with compliance, Ms. Lynch further advises, and by using the time afforded now, firms can be 100 percent ready when the SEC does reopen. See Compliance Week (subscription required), “Navigate SEC cautiously during shutdown, experts advise”
