The Chief Compliance Officer of a broker-dealer lost another appeal of FINRA discipline for failing to review emails. The firm’s Written Supervisory Procedures required daily email reviews, but the CCO only sporadically reviewed emails and completely ignored email reviews for three months. Although the WSPs stated that the CEO had email review responsibility, the CCO knew that the CEO was not conducting email reviews and that the job fell to the CCO. The SEC rejected the CCO’s attempts to blame the third party email service. The same CCO lost a similar appeal last year with respect to his prior employer. The SEC notes that the firm and the CEO had responsibilities, but those obligations did not exculpate the CCO.
CCOs must proceed with caution with WSPs and work expectations to avoid assuming responsibilities that s/he will not or cannot undertake. You may think you’re helping out or just being a good team player when, in fact, you are assuming significant regulatory liability. No good deed goes unpunished when the work doesn’t get done.