Finra Pinpoints Scope of Potential Liability for Compliance Chiefs (The Wall Street Journal)
The Wall Street Journal, March 17, 2022
Finra Pinpoints Scope of Potential Liability for Compliance Chiefs
Adam Felsenthal, who leads the initiative at the New York City Bar Association, said the association’s committee is pleased to see the Finra guidance took into consideration a few factors suggested by its proposal, including situations in which the compliance chief ignored multiple red flags and when the CCO doesn’t have proper support in terms of staffing and resources. “The framework really helps to comfort the compliance community that regulators are not going to target them indiscriminately,” said Mr. Felsenthal, who is general counsel and deputy chief compliance officer at healthcare investment firm Great Point Partners LLC. “This checks off one of the concerns and now they can go back to their main job and dig in deep and solve compliance issues.” He added that a positive next step would be for the U.S. Securities and Exchange Commission, which oversees Finra, to release a framework on this issue as well.
