“We have charged firms for having compliance failures even where there were no underlying violations. We want to send a message that businesses have to have controls in place in order to prevent fraud. Preventing wrongdoing in the first place is much better than after-the-fact enforcement, which more often than not is not going to fully compensate investors for the harm they have suffered,” Khuzami said in an interview.
Khuzami pointed to a $22 million settlement with Goldman Sachs earlier this month for lacking controls over the dissemination of material non-public information through “huddles” between its analysts and traders and selected customers. The SEC, in coordination with the Financial Industry Regulatory Authority, the self-regulatory organization for broker-dealers, filed the action even though there was no actual charge of insider trading.
via Interview: SEC Enforcement Division Director Robert Khuzami — Thomson Reuters
