Family Ties May Taint Compliance Officer
Suzanne Barlyn – Dow Jones Newswires – February 9, 2009
Family ties within a business can be a plus – just not when one of those family members is the firm’s chief compliance officer.
A dramatic case in point is Bernard L. Madoff Securities LLC, now exposed as an alleged $50 billion Ponzi scheme. The fact the company run by Bernard L. Madoff was in many ways a family business, employing two sons, a brother and niece, was a selling point for some unwitting investors.
However, Bernard Madoff’s brother, Peter, in his role as compliance officer may have lacked independence or risked being subject to family influence, say compliance professionals. To compound the issue, Peter’s daughter, Shana Madoff, was a rules compliance attorney for the company’s market-making arm on the broker-dealer side.
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