LAW 414

Financial Institution Compliance

Business & Tax Law

The course has both a practical and conceptual side. On the practical side, it covers the core substantive areas of compliance in financial institutions: these include the Foreign Corrupt Practices Act, anti-money laundering and combatting financing of terrorism laws, cybersecurity,  business continuity planning, risk management, broker-dealer and investment adviser compliance, compliance obligations of derivatives intermediaries, and banking institution compliance. In addition, students learn best practices in internal and government investigations. The course also provides a conceptual framework that enables students to negotiate the fast-changing terrain of compliance in financial institutions. It examines the broad array of ways financial regulators convey regulatory expectations for financial firms. Early lectures lay the foundations for later classes by examining the role played by the control functions, including risk management, compliance’s “sister” function, and internal audit, in firms’ systems of corporate governance. A recurring theme is the importance of understanding a sector’s business model and a firm’s unique risk profile in designing and implementing the firm’s compliance system. The course also covers the reasons why conflicts of interest are so prolific in financial institutions, how to identify them, and whether and how to eliminate or mitigate them. As necessary, individual lectures explore how the Global Financial Crisis of 2007-9 transformed the compliance and risk management functions. It is anticipated that some guest speakers from regulators and financial firms will give presentations. Grades are based on a combination of individual written assignments, a team project, and exams. Students will receive detailed, substantive feedback on individual assignments and the team project.

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