Proposal seeks clarity on CCO liability (Law360)

Under current securities regulations, Chief Compliance Officers may face enforcement actions where firm violations show they failed to act or perform their required job functions. The growing liability CCOs face in their job and the ambiguity over what would constitute an enforcement action against them, form the basis for a new proposal from the New York City Bar Association. The objective of the proposal is to provide clarity to CCOs and guidance to regulators on what factors should be considered before pursuing enforcement actions against CCOs. Amy Lynch, FrontLine’s Founder and President, explains that CCOs continuously face the fear of liability so having a clear picture of where CCO liability begins and ends would go a long way. Ms. Lynch, a former CCO, further comments that the SEC ultimately wants to see the CCO doing their job and would most likely not charge a CCO unless he or she is purposely not fulfilling their obligations for their firm. See Law360 (subscription required), “NYC Bar Proposal Could Quell Persistent ‘Fear’ CCOs Face“