Don’t Let Regulators Catch You Off-Guard

In an article published by Corporate Compliance Insights on December 10, 2024, AGG partner and co-chair of the Emerging Technologies industry team, Allison Raley, discusses how companies can stay prepared for audits and investigations.

Allison explains that the Securities and Exchange Commission’s (“SEC”) recent fining of 26 financial firms for $390 million serves as a reminder of the importance of comprehensive compliance systems. It’s not enough to have a baseline level of preparedness either — companies need to be proactive in their compliance efforts.

“For businesses to operate smoothly under regulatory scrutiny, they must create detailed policies and procedures tailored to their specific industry requirements,” said Allison.

In addition to developing a comprehensive compliance program, Allison suggests that companies centralize record-keeping processes. All documents should be stored in an organized and accessible location and maintained in accordance with industry-specific document retention policies and timeframes.

Allison also discusses establishing a chain of command for audits and investigations, as well as making sure companies maintain open communication from top to bottom. Ensuring these factors are in place helps reduce errors and complaints.

“The recent SEC fines underscore how critical it is for companies to have a proactive, well-structured compliance program in place,” Allison concludes. “Proper preparation not only helps avoid costly penalties but also strengthens a company’s reputation and builds trust with both regulators and stakeholders.”

To read the full article, you may click here.