WASHINGTON--We're not out to get you. That’s the message for compliance professionals from the SEC's new co-head of the Enforcement Division's Asset Management Unit.
The SEC announced the promotion of Anthony Kelly on Thursday, the same day he participated in a panel discussion at the Investment Adviser Association's annual compliance conference. In the panel, he took the opportunity to reassure the audience that his team is not singling out CCOs for enforcement actions.
"I know there's a sense out there that the SEC is targeting compliance professionals," Kelly said.
"I can tell you that is not the case. There is no change in policy where we are now trying to target compliance professionals," he said. "There's no shift in our thinking."
Kelly, who had previously served as assistant director of the Asset Management Unit, will now co-chair the division along with Marshall Sprung. Kelly succeeds Julie Riewe, who stepped down from the commission last month.
In a statement, Enforcement Division Director Andrew Ceresney praised Kelly for his "wide-ranging experience in enforcement and examinations, along with his exceptional judgment and dogged investigative skills."
Industry concerns about regulators targeting CCOs gained steam last summer after the SEC brought an enforcement action against BlackRock and its CCO in a case turning on the failure to disclose a conflict of interest and other compliance lapses.
Kelly insisted that actions like the one against BlackRock are still more of an exception than a rule, and that enforcement staff at the commission continue to view firms' compliance teams as "key partners."
Primarily, he said, the SEC takes aim at CCOs in two circumstances. In one case, the commission might bring an action against a compliance officer who was "affirmatively engaged in the misconduct," a situation that often arises when the individual is "wearing a different hat," such as CEO or CFO, Kelly said. Alternatively, the SEC's enforcement unit might get involved when a compliance official works to "impede one of our investigations," he said.
In either case, Kelly said, the decision to bring an action against a compliance officer is not one that his team will make lightly.
"Any time we're considering charging a CCO we take that very seriously," Kelly said. "We're not looking to second-guess their good-faith judgments."
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access