GRC Professional - February 2015 Edition | Page 12

Superintendent of Financial Services, Benjamin
Lawsky, said: “We continue to believe that fines,
while often necessary, are not sufficient to deter
misconduct on Wall Street. We must also work to
impose individual accountability, where appropriate and clearly proven, on specific bank employees
who engage in wrongdoing.”
“BTMU employees pressured PwC into watering
down a supposedly objective report on the Bank’s
dealings with Iran and other sanctioned countries,
thereby misleading regulators. It is clear that we, as
a regulatory community, must work aggressively
to reform the cosy relationship between banks
and consultants, which far too often has resulted
in shoddy work that sweeps wrongdoing under the
rug,” Superintendent Lawsky said.
There have also been instances of cases occurring
in Asia. The latest case involved a former responsible
officer of Delta Asia Securities in Hong Kong. The
Securities and Futures Commission (SFC) issued
a reprimand to Ms Hung Lai Ping, and fined her
$150,000 for managerial and supervisory failures.
In her role, Hung was responsible for overseeing the compliance function and all front and back
office operations of Delta Asia, including its settlement functions.  The SFC found that, during the
period from January 2010 to February 2013, Delta
Asia  used shares belonging to clients and held in
segregated client accounts at the Central Clearing
and Settlement System (CCASS) to settle transactions for its other clients who did not have sufficient
shares in their accounts to discharge their respective settlement obligations on the settlement date.
The SFC is of the view that Delta Asia’s settlement malpractice and failures were attributable to
negligence on the part of Hung. In her capacity as a
responsible officer and a member of senior management, Hung bore primary responsibility for ensuring
the maintenance of appropriate standards of conduct
and adherence to proper procedures by Delta Asia,
for properly managing the risks associated with the
10 GRC Professional • February 2015

We must also
work to impose
individual
accountability,
where
appropriate and
clearly proven,
on specific bank
employees
who engage in
wrongdoing.

business of Delta Asia and for supervising diligently
persons employed or appointed by Delta Asia to
conduct business on its behalf.
According to the SFC, Hung failed to fulfil such
responsibility and her failure manifested itself in
the failures that Delta Asia, under her management,
displayed. In deciding the sanctions, the SFC took
into account that Hung accepted the SFC’s findings.
Growing trend
Sean Griffin is an attorney in the US and has seen
this trend unfolding over a few years. “The SEC is
increasingly targeting compliance officers who take
missteps in their job, holding them liable for not
doing their job properly,” he says.
Griffin says, in the SEC’s increasingly prevalent view, if an “officer” with the “authority” and
“responsibility” could have “compelled” employees
to “adhere” to corporate policies, but a violation
occurred nonetheless, then that officer should bear
liability for the employee’s violations.
The worrying aspect to this is that cases are
arising for relatively small breaches. Griffin says in
one case, the SEC charged Edward Price, the CCO