Woe betide the pitiable compliance professional, going about his thankless task telling their bosses what they can and can’t do to make money. Which task is only about to get worse.
Several recent enforcement actions found compliance officers personally liable for mistakes within their firms. Meanwhile, New York’s principal financial regulator, backed by New York Gov. Andrew Cuomo, wants the power to seek criminal charges against compliance officers in some cases.
On the one hand, these people are paid—quite handsomely, according to the Journal—to ensure compliance, so it seems a bit rich for them to whine about being held to account when they don’t. On the other hand, as ex-SEC Commissioner Daniel Gallagher notes, throwing the book at compliance officers would seem to lead to some “perverse incentives.”
Compliance officers are “shaking in their boots,” said Carrie Mandel, a member of recruiter Spencer Stuart’s legal, compliance and regulatory practice. She is among a number of recruiters, lawyers and executives who say the heightened accountability is driving experienced people to be more cautious about the profession and making it difficult for banks to find replacements….
“It’s easier for firms to give up their compliance officer, because what are they going to do, give up the CEO?” asked a compliance officer who has worked for large U.S. and foreign banks.