Two recent U.S. Securities and Exchange Commission enforcement actions have raised concerns that the agency will penalize compliance officers who create rigorous programs, leading to potentially perverse incentives to avoid responsibility for those programs, the Wall Street Journal reported today. The SEC charged the chief compliance officer at Blackrock Advisors LLC officer with breaches of the Investment Advisers Act for failing to implement certain compliance compliance policies and procedures. The compliance officer agreed to pay a $60,000 penalty; the company will pay $12 million. Neither admitted nor denied the SEC’s allegations. The agency also charged the chief compliance officer of SFX Financial Advisory Management Enterprises Inc. with failing to implement compliance policies and procedures it says would have detected an alleged fraud by an executive at the firm. The company was fined $150,000 and the compliance officer agreed to pay a $25,000 penalty as part of a settlement agreement in which neither had to admit nor deny guilt.
