Compliance Officers: Personal Liability, Protections, and Posture

Abstract

This Symposium Article will explore the evolving nature of the regulatory and enforcement landscape as it pertains to compliance officers, specifically regarding their susceptibility to personal liability. It will examine the posture of compliance officers in three contexts: i) as a possible target for enforcement activity by regulators; ii) as a quasi-professional subject to a current regime of “non-regulation”; and iii) as an employee in need of ample whistleblower protections, each of which create implications for a compliance officer’s risk of personal liability and protections as a constituent of the organization monitored. After considering the current guidance surrounding enforcement activity against chief compliance officers by regulatory agencies like the Securities and Exchange Commission (SEC) and Financial Crimes Enforcement Network (FinCEN), this Article will examine the lack of professional regulation of compliance officers and the various ways in which this poses liability risks, especially in instances where a compliance officer’s work overlaps with that of other regulated professions. Finally, this Article will analyze whistleblowing law developments interpreting the Dodd-Frank Act, particularly through the lens of how such developments affect compliance officers as potential employee-whistleblowers navigating issues of workplace culture and pressures from management.