Effective Corporate Compliance: A Holistic Approach for the SEC and the DOJ

TLDR: The SEC and the DOJ should take a more integrated and holistic approach to compliance by regularly and publicly incorporating all of the elements in the Guidelines into deferred and non-prosecution agreements and penalty settlements.

Abstract: Today, most global corporations claim to have effective compliance programs that ensure and monitor their compliance with all state, federal, and even international requirements. A growing body of literature and regulatory activity indicates that truly effective compliance programs must incorporate all of the “Seven Elements of an Effective Compliance Program” contained in the Federal Sentencing Guidelines. Despite these Guidelines and growing industry and regulatory interest in effective compliance, noncompliance continues, and many companies run into trouble when noncompliance brings their actions to the attention of the SEC and the DOJ. In turn, the SEC and the DOJ struggle to encourage effective compliance programs within these noncompliant companies and in the wider corporate community. This Comment proposes that the SEC and the DOJ should take a more integrated and holistic approach to compliance by regularly and publicly incorporating all of the elements in the Guidelines into deferred and non-prosecution agreements and penalty settlements. The agencies should also consider greater use of independent monitorships to ensure effective compliance.