A Refreshing Dip in the Cool Waters of Compliance

I have been grateful over the years to vigilant compliance officers. They have caught typos, questioned awkward prose, and yes – stamped out hyperbole. I have relied on their diligence to help me rein in overly enthusiastic financial advisors and in some cases, to eliminate corporate bloviation. But compliance review can be an onerous process and I am often unhappy with the clunky constructions that result. To find out if there is a way to improve the way compliance officers and communications professionals work together, I asked Lindsey Simon, Founder and Principal of Simon Compliance, about her views.

Q. How would you describe the role of a compliance officer?
A. A compliance officer is a voice of authority within an organization, as well as (hopefully) a voice of reason. She needs to understand the rules and regulations well, but should also understand the company and how its business fits within the rules. The compliance officer is not often the most popular person in an organization – from compliance, the answer is sometimes “no” – but she has to able to say what she needs to say and has to be sure that people actually listen to her.

Q. What are your pet peeves with communications materials?
A. My biggest pet peeve with communications materials is their lack of focus or specifics. When I read marketing pieces and pitch books, I often can’t tell what the firm specializes in or is trying to sell. Each firm needs to make their point distinctly and clearly. More troubling, many pitch decks contain clearly exaggerated and unsubstantiated returns. Part of my job is to verify the numbers. I will want to see how you got them. Then I will try to replicate them without any explanation from you. If I can’t do that, someone will have to redo them.

Q. How can communications professionals help you do your job better?
A. My job is easier when marketing materials are clear, precisely tailored, and contain proper disclosures. I also recommend that communications professionals create “substantiation binders” or computer-based “substantiation folders.” Anytime you cite data or rely on a published article as a source, make a copy of it and save it. Like me, most compliance officers don’t want to have to worry about tracking down the information when a retail shareholder asks a question, an institutional investor is doing due diligence or the SEC asks for backup. It just takes five minutes to do it when you are working on a project. After the fact, it can take hours.

Q. In my experience, attorneys and compliance officers – not communications professionals – have ultimate control over communications materials. What is your view?
A. For the final draft, yes, I think it’s necessary. Lawyers/compliance professionals must make sure the materials adequately disclaim risk and adequately address performance returns. We must also make sure the SEC’s advertising requirements are followed, which means among other things that we evaluate any forward-looking statements. That said, I think some compliance officers are overly concerned with word choice and semantics. I consider myself an advisor, not an editor. However, I have always believed that investors should be able to understand financial documents and will do my utmost to make sure that language is accessible to all.

Q. What do you suggest for communicators who want to have a larger voice in the final decisions?
A. They should get to know their compliance officer. What is her level of experience? How well does she know the regulations and the English language? Ask her about the pressures she faces. Help her learn about your work and your challenges. Encourage her to stop by without prior notice to visit with you and your colleagues. Remember, you are both on the same team. You want to do the right thing for the organization.


Lindsey Simon is Founder and Principal of Simon Compliance. She specializes in private equity registration, hedge fund registration, mock SEC audits and ongoing compliance management for investment advisors. Ms. Simon was previously a Senior Attorney with the U.S. Securities and Exchange Commission’s Division of Enforcement. She was also General Counsel and Chief Compliance Officer at Carpe Diem Capital Management, a Chicago based hedge fund. She received her B.A., cum laude, from Emory University, and her J.D. from Northwestern University School of Law, where she was Editor-in-Chief of the Journal of Criminal Law and Criminology.

One Comment

  1. Discussing how it’s in the mutual interest of Communications and Compliance professionals to work as a team is a “refreshing” re-direction of perspective. Thanks!

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