Compliance Bits and Pieces for February 4

Here are some recent compliance-related stories that caught my eye:

Leadership (as told by the Pointy-Haired Boss)

Paper Lion Ahead for SEC’s Pay-to-Play Exemption? by Allix Magaziner in the Pay to Play Blog

On March 14, the SEC’s pay-to-play rule will come into effect and there is growing concern that the rule’s exemption for accidental violations will result in an administrative hailstorm. The rule allows an advisor to apply to the SEC for an order exempting it from application of the two-year ban. Under such provision, the SEC can exempt advisers from the time out requirement where the adviser discovers triggering contributions after they have been made, and when imposition of the prohibition is unnecessary to achieve the rule’s intended purpose. An exemption would be based on the facts and circumstances of each applicant, including the SEC’s consideration of factors such as whether the adviser had a compliance program in place.

Chancery Allows Claim to Enforce “Agreement to Negotiate in Good Faith” by Francis G.X. Pileggi in Delaware Corporate and Commercial Litigation Blog

The Court explained that “an agreement to negotiate in good faith may be binding under Delaware law,” and specific performance could, in theory, be an appropriate remedy for breach of such a provision. In practice, however, “the problems with ordering parties to negotiate in good faith are significant.”

Smarsh is conducting a survey on the attitudes and opinions of compliance professionals in the financial services industries regarding the oversight of electronic communications (such as email, instant messaging, social media, etc.) at

Barney Frank will Seek Reelection

Frank identified as his top two issues defending the Wall Street Reform and Consumer Protection Act, which he called “under attack by those who oppose meaningful regulation and who would undermine it” and addressing “excessive military spending.”  Frank said, “My second national priority is to reduce significantly America’s swollen, unnecessary, worldwide military footprint – this is the only way to reconcile the need for us to spend wisely, to promote our economy and to accomplish significant deficit reduction.”  Frank also flagged fishing industry protections, low-income housing and “fighting for full legal equality for all citizens” as priorities.