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Navigating CCO Liability Risks: Tips for Staying Out of the SEC’s Crosshairs

By June 4, 2023No Comments

Copyright 2023 CEP Magazine, a publication of the Society of Corporate Compliance and Ethics (SCCE).

The issue of chief compliance officer (CCO) liability has become a matter of grave concern for CCOs, CEOs and other C-suite executives that put on “too many hats” within an organization and take on the firm’s compliance responsibilities.

In the June issue of CEP Magazine, a publication of the Society of Corporate Compliance and Ethics (SCCE), Silver’s CEO, Fizza Khan, co-authored a byline with Jessica Thayer, Senior Vice President at Starkweather & Shepley Insurance, that offers tips on how CCOs can stay out of the SEC’s crosshairs. Below are key takeaways from the article:

  • As regulators work to formalize guidance for chief compliance officers (CCOs) on the scope of their responsibilities and limitations around personal liability, now is the time for firms to better understand the extent of individual liability for compliance officers when determining potential compliance failures.
  • CCO liability can be a complex yet nebulous concept to navigate. Therefore, it’s important to understand how CCO liability is being defined by regulating bodies.
  • Mitigating the risks of CCO liability hinges on understanding the types of cases out there that triggered regulatory enforcement actions. Therefore, certain top matters elucidating the potential dangers of CCO liability are highlighted.
  • Understanding CCO liabilities, the regulatory landscape and examples of “bad behavior” are important steps in protecting CCOs against potential risks, especially with so much on the line for CCOs.
  • CCOs can be held personally liable for any compliance failure, which can lead to significant legal and financial consequences and overall reputational harm for both the firm and the CCO.

Download the full article here