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Former SEC Official Recommends that the SEC Should Not Prosecute CCOs

Sunday, July 7, 2013

John Walsh is urging the new SEC Chairman Mary Jo White to refrain from prosecuting chief compliance officers, utilize alternative enforcement tools, and avoid efforts to set new enforcement records. Mr. Walsh believes that the SEC should encourage compliance professionals and not prosecute them for the conduct of others. Mr. Walsh stated that compliance professionals “are not adjunct to the agency” but instead comprise “a private sector profession dedicated to raising business standards.” He argued, “If the current trend continues and compliance professionals become regulatory guarantors of their firms, the future of the profession may be at risk.” Mr. Walsh also believes the SEC should use multiple remedies including private conversations, speeches, informal actions such as deficiency letters, disclosures, training, and other creative remedies. Mr. Walsh urges Ms. White to de-couple enforcement from examinations.

To read the full letter please click here.