Securities Litigation

In mid-June, SEC Commissioner Gallagher issued a strongly-worded public dissent from two enforcement actions against investment-adviser CCOs, accusing the Commission of "cutting off its nose to spite its face" by punishing CCOs upon whom regulators depend to help ensure legal and regulatory compliance. Our blog post covering the remarks is here. Commissioner Aguilar responded June 29 to Gallagher's remarks, "concerned [they] may have unnecessarily created an environment of unwarranted fear in the CCO community," and calling it "unhelpful." Aguilar cited agency statistics to support his claim that enforcement actions against advisor CCO's are relatively few and far between. Chair White joined the discussion July 15, in remarks opening the annual broker-dealer compliance outreach program. White sought to reassure CCOs: "To be clear, it is not our intention to use our enforcement program to target compliance professionals. We have tremendous respect for the work that you do. You have a tough job in a complex industry where the stakes are extremely high. … We do not bring cases based on second guessing compliance officers' good faith judgments, but rather when their actions or inactions cross a clear line that deserve sanction." Commissioner Aguilar's comments are here. Chair White's remarks are here. Thomas K. Potter, III (tpotter@burr.com ) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Resident in the Nashville office, Tom is licensed in Tennessee, Texas and Louisiana. He has over 29 years' experience representing financial institutions in litigation, regulatory and compliance matters. See attorney profile. © 2015 by Thomas K. Potter, III (all rights reserved).