The issue of chief compliance officer (CCO) liability continues to be a matter of 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. Silver’s CEO, Fizza Khan, together with Jessica Thayer, Senior Vice President at Starkweather & Shepley Insurance, addressed this issue in a recent webinar titled, “Navigating CCO Liability risks: Tips for staying out of the SEC’s Crosshairs.”
Here is a video excerpt of the discussion as well as key takeaways:
- 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.