Advising Compliance in Financial Firms: A New Mission for the Legal Academy

Abstract

This introduction to the symposium issue provides background on the subject of compliance in financial firms, whose task is to ensure that a broker-dealer and its employees comply with applicable laws and regulations. It explains the tasks of compliance in financial firms and discusses its origins, particularly in the statutory and regulatory obligation of supervision that is placed upon financial firms and their managers. It then looks at the reasons for the growth in importance of compliance in recent years, as well as the likely continued significance of this firm function. It particularly emphasizes how the recent financial reform legislation enhanced the role of compliance and diffused it into previously unregulated financial firms. It next offers several reasons why legal scholars have not devoted much attention to financial firm compliance and also discusses why compliance is attracting more scholarly attention, partly because law graduates are increasingly entering this field. It concludes by offering a few thoughts on how the legal academy can help compliance become more successful in its mission, with a reference to contributions of the professors made during the symposium and to useful work in managerial studies on how to build effective compliance programs.

Keywords: compliance

JEL Classification: K22