Compliance Bricks and Mortar for June 16

I want to clarify my Pay-to-Play and Yard Signs post from earlier this week. I think an early draft of the post was sent through the email system that was incorrect. A senior SEC official clearly stated that yard signs are not limited by the Pay-to-Play Rule and that the speaker who made the statement was 100% incorrect. (After the speaker’s statement I thought I could turn my compliance forensic testing into bike rides past all of my employees’s house to check for political signs. Oh well, back to the office.)

Below are some of the compliance-related stories that recently caught my attention.


SEC identifies adviser cyber security flaws by Jason Wallace in Reuters

In the wake of the recent WannaCry ransomware attack, the Securities and Exchange Commission’s exam team is warning investment advisers that many are failing to perform steps critical to fighting cyber security attacks.

In specific, a relatively high percentage of advisers examined are failing to conduct continuous cyber-risk assessments, nor are they performing penetration or venerability tests. The shortcomings were far higher among investment advisers than among broker-dealers, and concerns raised by the WannaCry attack were particularly relevant to smaller firms. [More…]


SEC DERA, We Love You! by Matt Kelly in Radical Compliance

DERA joined on March 20. As of this morning, the Division had posted 193 tweets. I haven’t done a thorough analysis of the humor-to-boring ratio, but I can safely say that DERA is far more witty than the general SEC News feed, and light years beyond the Enforcement Division’s feed, which is a total snoozer.

We also love the wry self-awareness that DERA has about economists. They get a bum rap as nerds even in the corporate compliance field—and really, who are we to throw stones here?—but DERA knows how to bring it. [More…]


New ACC Survey Finds ‘Dramatic’ Gender Pay Gap for In-House Counsel by Sue Reisinger in Corporate Counsel

A new report from the Association of Corporate Counsel draws “a dramatic picture of gender pay disparity” for women in-house lawyers, while it shows their male colleagues may be sitting in denial.

The “Global Perspectives: ACC In-House Trends Report,” released Tuesday, indicates that a higher percentage of women than men occupy lower-level categories when it comes to in-house salaries. [More…]


The Never Ending Story: Money Laundering by Monica Ramirez Chimal in SCCE’s Compliance & Ethics Blog

Did you know that one of the sources to finance terrorism and trigger for money laundering is counterfeit goods? Due to the actions of law enforcement, the criminal is making money laundering more complex; they are looking for those countries, industries, companies and persons which can help them to launder lots of money at a low cost in a very quick time. [More…]


How Principles of Good Governance Can Improve Oversight of Financial Regulatory Institutions by Hadar Jabotinsky and Mathias Siems in the CLS Blue Sky Blog

Financial regulatory institutions are at the center of intense debates over how to supervise financial firms and markets. They are also the focus of an important and growing body of literature that is mainly concerned with the question, “Who should regulate the regulators.” Financial regulatory institutions are usually audited as part of the review of a particular country by international organizations such as the International Monetary Fund, the World Bank, or the OECD. In practice, this means that the structure of financial regulatory institutions and the conduct of financial regulators are not regularly and consistently monitored.

In our recent paper, we argue that the debate should include not just who should regulate the regulators, but also how they should be regulated. We examine how the principles of corporate governance address conflicts of interests between shareholders and other stakeholders in corporations, and apply those principles, with necessary adjustments, to financial regulatory institutions. We believe that this would solve many of the problems with monitoring financial regulatory institutions and holding them accountable.  [More…]


Raising the Corporate Veil in Kleptocracy Initiative

For actors looking to take advantage of the U.S.’s transformation into a global offshore haven, there are few tools more popular than limited liability companies (LLCs). From states like Nevada and Wyoming to high-rises in Miami and New York, LLCs have become one of the most prominent features of the U.S.’s shell company industry. And due to the U.S.’s lack of a beneficial ownership registry, actors both foreign and domestic continue to use LLCs to mask their identity – and their wealth.[More…]


What all urban planners should be asked: would you let your child cycle here? by Klaus Bondam

Connie Hedegaard, former Danish EU commissioner for climate action, puts it this way: “One might say that Europe faces a choice. Do we want to pursue an American-style approach where kids depend on their parents to take them to school for many years? Or do we want a Nordic-style approach in which mobility considerations are integrated into urban planning, and where the necessary infrastructure is provided so kids can bike to school by themselves? I know which I prefer.” [More…]


It would have been my friend Jeff’s birthday this week, except cancer killed him. This week I’m matching PMC donations. If you enjoy Compliance Building, please join many of my other readers and donate to support my Pan-Mass Challenge bike ride to fight cancer. (Thank you to those who have already donated.) I’m pedaling from the New York border to Provincetown on August 4-6. 100% of your donation goes to the fight against cancer. You can read more and donate here: http://profile.pmc.org/DC0176