Aug 08, 2018
The term “culture of compliance” has long been a vague part of the financial and regulatory lexicon, and regulators in the United States and the United Kingdom are turning to culture once again with renewed vigor. Dorothy Mehta comments.
Excerpts from “Cultivating Compliance,” HFM Compliance, August 8, 2018:
Dorothy Mehta, a partner at Cadwalader, Wickersham & Taft, said a culture of compliance is not really something that can be regulated by one set of rules. “What works for one shop may not work for another,” she said. “Shops are different sizes with different investment strategies and different investor bases so it’s not really possible to implement one set of rules that would apply equally to all of them in this area. That’s why guidelines work better to let firms know what they should be thinking about when putting their compliance policies and procedures together.”
The CCO should also be visible and present within the firm so that compliance isn’t just an ambiguous, hidden thing, Mehta said. “Compliance needs to be associated with a real person, a competent, respected firm leader that people can turn to with questions or concerns. The CCO should take the time to interact with people in the firm and get to know them and what they do so he or she is not seen as the ‘no’ person getting in the way of the business.” Mehta said employees must understand the firm’s reporting procedures, such as how to make a report and who to report to.
Mehta concluded: “You can never rest on your laurels when it comes to compliance. There has to be a constant review of what you’re doing and what works for you and what doesn’t. As your business changes, your compliance changes so you need to let your employees know what has changed, what is acceptable and what is not, and what is important to your firm at any given time.”
Joel Mitnick, Monica Martin
Dorothy Auth, Howard Wizenfeld, Jaclyn Hellreich
Ingrid Bagby, Michele Maman, Eric Waxman, Kathryn Borgeson, Anthony De Leo, Samantha Greenfield