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News October 18, 2004 Issue

OCIE Using E-mails to Assess Culture of Compliance

SEC examiners are looking at e-mails as a tool to determine whether a firm has developed a culture of compliance, according to OCIE associate director Gene Gohlke, speaking at last week’s NRS conference.

When assessing a firm’s compliance program and control environment, he said, "we’re trying to get a read on compliance culture [and] tone at the top by reading e-mails." He said that examiners are looking at whether senior management’s "words and deeds," as viewed through e-mails, are oriented towards having good compliance. "Do senior managers say, ‘We don’t have time for compliance’?" E-mails, he said, give examiners "a better flavor of what these people really feel about compliance."

E-mails also are being used to assess the compliance environment within particular departments. For example, said Gohlke, by focusing on e-mails sent to and from one area, examiners can see "how many compliance issues bubble up to that area."