ALJ Shows Mercy to Ex-Compliance Officer (with Lofchie Comment)

In a recent decision released by the SEC, an administrative law judge ordered the dismissal of sanctions against a former bank compliance officer. The dismissal stemmed from the SEC's finding that the compliance officer had aided and abetted violations of the law willfully, though not with the intent to profit or to injure anyone.

Initially, the former officer was tasked with reviewing an employee's investments in a company that was acquired shortly thereafter. A year later, the SEC charged the employee with insider trading. After the employee was charged, the compliance officer revisited the documents in question and reworked them to make it appear as though her initial review had been more thorough than in fact it was.

The administrative law judge dismissed the sanctions finding that the officer's wrongdoing was somewhat insignificant, and because her situation was sufficiently sad (she had lost her job and endured a host of family and money problems) to suggest that she had suffered enough.

Lofchie Comment: It is hard to say who is more deserving: the Administrative Law Judge, of credit, for having the decency to say "enough," or the prosecuting attorneys, of blame, for the apparent heartlessness in pursuing the case. The decision reads like the SEC's version of Les Miserables.

See: SEC's Initial Decision Regarding Dismissal of Sanctions against Former Bank Officer.

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