The SEC's Latest CCO Case And The Ongoing Need For A Framework

On June 30, 2022, the SEC filed a settled action against Hamilton Investment Counsel, LLC (the "Firm") and its chief compliance officer ("HIC CCO"). Notably, the SEC charged the HIC CCO with willfully aiding and abetting the Firm's violations of Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder – or more simply stated, the SEC charged the HIC CCO with aiding and abetting the Firm's compliance rule violations. The primary underlying conduct involved compliance failures related to an investment advisory representative ("IAR") not disclosing outside business activities to the Firm.

Other key aspects of the order instituting proceedings include:

• The HIC CCO served as the principal of the Firm, and a registered representative associated with the broker-dealer used by the Firm;