Point made from off-channel communications enforcement (Law360)

Recently SEC Chairman Paul Atkins decided to criticize the prior administration’s large focus on off-channel communications enforcement by claiming excessive resources were used to pursue cases. However, he neglected to mention the overarching impact of that enforcement in boosting recordkeeping compliance that appears to be firmly in place across the industry. With the lead comments in the Law360 story, FrontLine’s Founder and President Amy Lynch explains that the industry now gets it and the “point has been made” after more than 100 enforcement cases. Ms. Lynch states that firms are now either implementing a technology solution for oversight, if they allow off-channel business communications, or prohibiting it and training employees on the restrictions. The SEC’s sweep exams and enforcement campaign for nearly three years created the pressure to comply that still exists today, and there is now very little gray area for firms, added Ms. Lynch. Chairman Atkins’ perspective may be skewed by his emphasis on what he sees as limited investor harm from the cases, but he cannot argue with the large-scale results from the enforcement approach. See Law360 (subscription required), “SEC Off-Channel Sweep Led to Recordkeeping Compliance”