Intrepid law.com reporter Sue Reisinger at Corporate Counsel has a sobering account of Prudential Financial’s experience in settling claims with US DOJ of alleged wrongoing at a brokerage subsidiary.
Other companies have had requirements of outside oversight over post-settlement compliance programs. The new twist for Prudential Financial is that some of these terms focus on its GC; indeed, the settlement:
“…requires GC Susan Blount to personally design, install, and oversee a complex compliance program. Moreover, Blount must report on the program to federal prosecutors twice a year for the next five years.”
What is unclear as to how this will work in practice. Twice-yearly reports to a US Attorney. What if there is a disagreement in the scope or substance of the compliance program? Ms. Reisinger’s article also raises the specter of GC Blount’s own liability for the effectiveness of the program. That would be a potential expansion of a job description.
This oversight will undoubtedly give ample fodder for increased substance to compliance training programs at Prudential Financial in the future. That and the $600 million in fines and penalties.