Independent Monitoring & Independent Consulting

  • Serving as Independent Consultant to a diversified financial services company in reviewing its Rule 506 policies and procedures.
  • Serving as Independent Examiner for a Swiss banking institution in connection with the Department of Justice Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks.
  • Serving as Independent Consultant to a global financial institution to review and test its policies respecting compliance with Section 9(a) of the Investment Company Act arising out of the institution’s SEC settlement regarding its underwriting of securities.
  • Serving as Independent Monitor to a fund manager and its principal to review and assess the manager’s policies, practices, controls, recordkeeping and disclosures relating to conflicts of interest, affiliated transactions and cash management pursuant to their settlement with the SEC.
  • Serving as Independent Consultant to a broker-dealer in connection with its Municipalities Continuing Disclosure Cooperation settlement.

Looking Forward

Despite substantial changes in regulatory philosophy, particularly the DOJ’s recently amended policy regarding the selection of monitors in Criminal Division matters, we believe that regulators will continue to require independent monitors and independent consultants in settlements where the regulatory authority requires assurance that remedial measures have been implemented and are operating effectively.

The amended DOJ policy provides that the Criminal Division should favor the imposition of a monitor only where there is a demonstrated need for, and clear benefit to be derived from, a monitorship relative to the projected costs and burdens. Where a corporation’s compliance program and controls are demonstrated to be effective and appropriately resourced at the time of resolution, a monitor will likely not be necessary. A current trend is for entities to achieve reasonable compliance, through their own efforts or those of an independent third party, before entering into the actual settlement so that firms receive credit for effective remediation as part of the settlement terms.