Joe Murphy – Compliance & Ethics Professional – October 2015
It was back in 2002: Frank Gruttadauria had spent 15 years as a broker stealing millions from clients by creating phony accounts. This star stockbroker was also the manager of the Cleveland of ce of Lehman Brothers, where he worked. And reporting to him was? You guessed it, the compliance officer for that office.
As noted in a Wall Street Journal report quoting a Columbia University professor, “It’s absurd to have an employee try to supervise the person that sets their salary, bonus and has the power to re them.” In the professor’s words, it was “a system with a built-in vulnerability and it’s not surprising that it failed.” In other words, “policing up” is an unrealistic expectation.
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