Personal liability has been a hot topic in the compliance profession for several years – and it got hotter recently when the former Chief Compliance Officer of MoneyGram settled a personal liability suit with FinCEN and the DOJ.
Thomas Haider will pay $250,000 of the original $1 million fine that FinCEN imposed in 2014 for his failure to ensure that his former employer complied with the anti-money laundering provisions of the Bank Secrecy Act. As an added penalty, Haider is barred from working in financial compliance for three years.
Those are the bare facts, but there’s a lot left to say here.
For starters, Haider’s attorney, Ian Comisky, said in 2014 that the case was one of overreach, adding, “While the current government mantra is for heightened individual responsibility, this is the wrong case to try to establish this principle.”
Haiden’s legal team said he tried to bring brewing fraudulent activity to the attention of management but was rebuffed.
Assuming this is the case – that he tried but failed – is the real failure Haiden’s or is it management’s?
As I said, last week’s settlement has hardly put this topic to rest.
One of Corporate Compliance Insights’ authors tackled this topic last week, and I want to share some points she made and direct you to the full text of her article as well.
Patty P. Tehrani is an experienced compliance counsel and advisor, with expertise in policy development and risk management programs. She writes, “I don’t disagree that compliance officers perform an essential function and are critical to any organization. But this decision raises some questions for me.”
Among her concerns:
· While the focus here is on AML programs, will this decision serve as a precedent for existing or future lawsuits against compliance professionals in general?
· Will this decision serve as a basis for compliance officers to become personally liable for all program failures?
· What, if any, personal liability applies to management if they reject a compliance recommendation?
· And ultimately, what effect will the Haider decision have on the compliance profession? Will this deter good, competent folks from entering the profession or cause those already in the profession to leave?
As an executive recruiter charged with helping large organizations hire top-level compliance talent, perhaps her final point resonates with me the most. Any discussion of personal responsibility begs the question whether the people who are best suited for the profession will be inclined to avoid it.
Seems to me that the response we’re looking for — and the remedy — must come from above. Senior management, that is. We’ve always talked of “Tone at the Top.” But now, more than ever, we need to see that talk in action. Many say the compliance function needs a louder, more independent voice, and programs need to be overhauled to reflect the increasing responsibility and liability that its leadership is taking on.
What do YOU think? As I said earlier, this is an on-going conversation. It’s a topic with lots of moving parts. Read Patty’s excellent article, and share it with others. And weigh in below. The more voices in this discussion, I believe, the better.
Published by Conselium Executive Search, the global leader in compliance search.
