Disciplinary Action

After a $15 million fine for failing to enforce its procedures, it is time to look at whether this could apply to you as well.  When you notice a violation of your Compliance Manual (“Manual”) are you sweeping it under the rug or are you documenting it?  I suggest that all violations of the Manual or the Code of Ethics should be documented.  Not only should they be documented, but if the violations continues there should be disciplinary action.  This firm got into trouble because although they documented the violations, they didn’t do anything about the repeat offenses.

What is a violation?  A failure to file personal securities transaction reports by the due date  is a violation.   A failure to report items to the gift or entertainment logs. These are a few examples.

Consider the “little things” that you let slide and the ramifications on the business if you continue to allow them.  Look at what due dates exist in your Manual and your Code of Ethics.  Confirm that those dates are adhered to.


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