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Being a compliance officer just got a little riskier, at least for those who work in the heart of America's financial center.
New York's highest court recently threw out a suit by a hedge fund compliance officer, Joseph Sullivan, who claimed he was fired for complaining to his boss about alleged improper stock trades. No matter that bringing to light potential compliance issues is a key part of a compliance officer's job.
The court's reason: Mr. Sullivan was an "at-will" employee — as are most employees in New York state — who could be fired for any reason, and there are no exceptions to that rule in New York for compliance officers, the court said.
The May 8 ruling makes clear that compliance officers in the state where Bernard Madoff ran a multi-billion-dollar Ponzi scheme can be fired for pointing out the very violations they were hired to detect.
New York is home to roughly 2,100 registered investment advisers and 3,400 brokerages. Federal securities and industry regulations require registered investment advisers and brokerages to appoint a compliance officer.
The nature of the role of compliance officers already puts them at risk of retaliation by employers and scrutiny by regulators, say compliance professionals. Now New York's compliance officers have to worry about being fired — legally — for doing their job.
http://www.hedgeworld.com/open_news/read_newsletter_aa.cgi?section=dail&story=dail20669.html
New York's highest court recently threw out a suit by a hedge fund compliance officer, Joseph Sullivan, who claimed he was fired for complaining to his boss about alleged improper stock trades. No matter that bringing to light potential compliance issues is a key part of a compliance officer's job.
The court's reason: Mr. Sullivan was an "at-will" employee — as are most employees in New York state — who could be fired for any reason, and there are no exceptions to that rule in New York for compliance officers, the court said.
The May 8 ruling makes clear that compliance officers in the state where Bernard Madoff ran a multi-billion-dollar Ponzi scheme can be fired for pointing out the very violations they were hired to detect.
New York is home to roughly 2,100 registered investment advisers and 3,400 brokerages. Federal securities and industry regulations require registered investment advisers and brokerages to appoint a compliance officer.
The nature of the role of compliance officers already puts them at risk of retaliation by employers and scrutiny by regulators, say compliance professionals. Now New York's compliance officers have to worry about being fired — legally — for doing their job.
http://www.hedgeworld.com/open_news/read_newsletter_aa.cgi?section=dail&story=dail20669.html
