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November 19, 2015

Stroock Special Bulletin

By: Christopher R. Brewster

When the head of the Criminal Division of the Department of Justice (“DOJ”) and the Director of the Securities & Exchange Commission’s (“SEC”) Division of Enforcement each offer detailed, point-by-point outlines of the elements of a good compliance program within a span of two days, there is little chance that the timing is coincidental.

For years, practitioners have complained that the SEC and the DOJ give short shrift to corporate compliance programs in favor of jazzier, headline-grabbing prosecutions.  Asking government prosecutors to encourage corporate compliance programs was akin to asking an orthopedic surgeon to recommend yoga instructors.  As Assistant Attorney General (AAG) Leslie Caldwell acknowledged in her recent speech to securities industry compliance officers, “we are prosecutors, not compliance professionals.” 

This Stroock Special Bulletin discusses both speeches, and how they highlight the need for companies to establish and maintain compliance programs – even where they are not compelled to do so by law – and to engage in rigorous periodic audits (internal or external) to ensure that the program is sound.