For nearly a decade, there has been considerable debate over whether and when a CCO should be held personally liable for compliance failures by the CCO’s firm. A key concern has been determining when there has been a “wholesale failure” by the CCO to carry out their responsibilities. Although there is a lack of concrete regulatory guidance on the standard, CCOs can ascertain a solid understanding of the standard by considering ancillary industry guidance and the fact patterns in recent enforcement actions. To help CCOs navigate these unsettled waters, compliance professionals at a recent National Society of Compliance Professionals seminar discussed the standards the SEC applies when determining CCO liability, recent enforcement proceedings against CCOs, CCO liability frameworks, the implications of CCO certifications in regulatory resolutions and ways for CCOs to strengthen a firm’s compliance culture. The program featured James Downing, global CCO at Morningstar, Inc.; Michelle L. Jacko, managing partner of Jacko Law Group; and Kevin Spence, director and compliance officer at Teachers Insurance and Annuity Association of America. This article discusses the key takeaways from the presentation. See “Personal Liability and Compliance Resourcing Are Top Concerns Among CCOs, Surveys Show
” (Aug. 2, 2022); and “How CCOs Can Avoid Personal Liability for Organizations’ Compliance Failures
” (Feb. 9, 2021).