CCO liability is still a big concern for chief compliance officers, but the recent speech from SEC commissioner Hester Pierce is helping to bring more clarity to the issues.
In CSS’ latest Coffee & Regs podcast, Natalie Silverman speaks to former Chief Compliance Officers Korrine Kohm and Ariana Monchick.
They discuss CCO liability, ways to avoid enforcement and best practices for compliance teams to mitigate risk and navigate complexities.
Korrine Kohm started off the discussion by talking about CCO liability and a recent speech from SEC commissioner Hester Pierce. This speech in question provides clarity over the instances where the SEC would consider enforcement cases.
Kohm said, “In Commissioner Pierce’s speech, what I really thought and took away from her speech and I thought was really good, is the fact that she actually laid out in the speech that she has herself decided to consider developing a framework to share with the rest of the commissioners. A framework that would detail what are some of the circumstances that would cause the commission to seek personal liability and in which circumstances would mitigate against seeking those personal liabilities. I think when I read that, in the speech, I really thought that was a really great step.”
Kohm resonated with this due to the fears she faced when serving as a CCO. In 2004, there was little resources and clarification for the position, making it hard for CCO’s to understand all their responsibilities and traversing the various compliance requirements.
With such uncertainty Kohm explained how she was particularly worried about CCO liability and was often worried about it, feeling as though she had “a target on my back.” It was not just errors she might make, but someone in the organisation doing something that could have had a detrimental effect on her and her career.
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