March 16

SEC Brings Out the Big Stick!


As a senior executive, you are fully-aware of DOJ guidance regarding compliance. You are on top of the ethics and compliance culture in your company. You feel good about containing an ethics breach to the individuals involved, right? Think again!

SEC’s practice has been to limit penalties against corporate wrongdoers to spare shareholders the expense of deterrence, and go after the individual wrongdoers.

SEC commissioner Caroline Crenshaw, in a speech last week, took issue with this practice. She said, Corporate penalties should be tied to the egregiousness of the actual misconduct, not just the benefit or impact on shareholders.

This possible change of policy indicates that the SEC may use a big stick of fines and penalties to motivate companies to fully-embrace heightened compliance, training, and internal controls to ensure the highest possible corporate culture to deter illegal or unethical acts.

My suggestion to companies is to double-down on ethics, compliance, and internal control monitoring. Do not assume that you can limit company exposure by simply blaming the individuals responsible.

I have specific programs exactly designed to prevent sudden revelations of illegal or unethical acts. If this interests you, then please go here


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