SEC Clarifies Failure-To-Supervise In Securities Law
October 15, 2013
The Securities and Exchange Commission clarified when legal and compliance personnel are considered supervisors and can therefore be held responsible for federal securities law violations perpetrated by employees under their oversight. Being a supervisor, according to the SEC, means having sufficient responsibility and authority to affect the conduct of the employee whose behavior is in question. The new clarity is added to the SEC’s stance that ultimate responsibility rests with the CEO and senior management.
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