Articles Tagged with CCO

Chicago-based Stoltmann Law Offices is representing investors who’ve suffered losses from dealing with broker-advisors who have violated their firms’ compliance rules. If they are following the law, broker-advisors have to follow a set of rules to ensure that they are doing right by their clients. In the real world, though, this doesn’t always happen. Sometimes firms don’t supervise what their brokers are selling along with inappropriate investment strategies.

Few investors know that brokerage firms must employ a professional called a “chief compliance officer (CCO).” This person acts as a watchdog to oversee broker activities and police trades so that rules and guidelines set by federal securities regulators such as FINRA and the Securities and Exchange Commission (SEC) are followed to the letter. What if the CCO isn’t doing their job? They can be sued.

FINRA states “that if a CCO has other business responsibilities (such as at firms where the CEO also serves as CCO), the CCO can be held liable for failure to supervise in his or her business line capacity, notwithstanding the CCO title.”

The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) seem to be focusing recent efforts on governmentally sanctioning Chief Compliance Officers (CCOs) for compliance failures in the anti-corruption arena. Last year, the SEC issued two enforcement actions against CCOs in the financial services section, and this week, FINRA announced a disciplinary action against Linda Busby, former Raymond James CCO. As a result of the action, Busby agreed to leave the industry for three years and pay a fine of $25,000. She has been the CCO from 2002 until 2013. FINRA’s enforcement chief Brad Bennett said “Raymond James had significant systemic AML failures over an extended period of time, even when the firm was previously sanctioned in the area.

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