Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, May 22, 2009

SEC Takes Steps to Strengthen Its Internal Compliance Program

Following the announcement that the federal prosecutor was looking into allegations that SEC attorneys may have engaged in impermissible insider trading, SEC Chairman Mary Schapiro outlined a series of measures the agency is taking to strengthen its internal compliance program to guard against inappropriate employee securities trading.

The measures the agency is taking include:

First, the staff has drafted a set of new internal rules governing securities transactions for all SEC employees that will require preclearance of all trades. It also will, for the first time, prohibit staff trading in the securities of companies under SEC investigation regardless of whether the employee has personal knowledge of the investigation. The rules have been submitted to the federal government’s Office of Government Ethics, which approves agency ethics rules.
 
Second, the SEC is contracting with an outside firm to develop a computer compliance system to track, audit and oversee employee securities transactions and financial disclosure in real time.
 
Third, Chairman Schapiro has signed an order consolidating responsibility for oversight of employee securities transactions and financial disclosure reporting within the Ethics Office. She has also authorized the hiring of a new chief compliance officer.

http://lawprofessors.typepad.com/securities/2009/05/sec-takes-steps-to-strengthen-its-internal-compliance-program-.html

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