Lack of Policies and Procedures in Banks Could Be Resulting in Excess Fines

Jane Norberg, Securities Enforcement & Litigation partner, was recently quoted in the Risk.net article, “Banks look to improve policies on self-reporting.” The article discusses the lack of reasonably designed policies and procedures in banks related to off-channel communications and other compliance issues.

While speaking at Risk.net’s “Risk Live” conference on October 19, Norberg said that these compliance failures are often identified by rank-and-file bank employees, who raise issues internally and then escalate to the SEC when their managers fail to take further action. “Many times, the banks may not even be aware of the issues at all,” Norberg said.

Norberg, former Senior Officer in the Division of Enforcement and Chief of the SEC’s Office of the Whistleblower, added that the SEC could “be a little clearer on the tangible benefits of self-reporting,” and mirror the U.S. Department of Justice’s approach to encouraging those under investigation to cooperate. “If the SEC is going to make a point about self-reporting, they should let banks know that they will reduce fines, and also [in appropriate cases] exempt them from [certain remedies like] this one-year monitoring requirement or any kind of compliance consultants,” she suggested.

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