Statement of Commissioner Caroline D. Pham on Chief Compliance Officer Liability
November 21, 2023
This consent order related to Binance is the first time that the CFTC is charging a compliance officer with individual liability.
Although this is a first for the CFTC, the SEC has imposed individual liability on a compliance officer in certain specific and limited circumstances involving egregious personal conduct. Accordingly, I find it very fitting to quote SEC Commissioner Peirce who stated, “The SEC’s determinations about whether to charge a compliance officer are consequential not only for the particular compliance officer, but more generally for the profession.” I believe that the alleged facts involving egregious personal conduct demonstrate that the defendant employee was “compliance in name only.” I also believe that these charges emphasize the critical necessity of having a robust compliance program that is adequately resourced with personnel that have the requisite character, expertise, and experience. I support sending this strong message to the crypto asset sector, which has all too often demonstrated material weaknesses in both their compliance programs and their risk management programs.
 Statement of SEC Commissioner Hester M. Peirce, “Chief Compliance Officer Liability: Statement on In the Matter of Hamilton Investment Counsel LLC and Jeffrey Kirkpatrick” (July 1, 2022), available at https://www.sec.gov/news/statement/peirce-statement-hamilton-investment-counsel-070122.