Compliance Lessons Learned from the 2008 Société Générale Trading Loss Scandal
In 2008, a rogue trader at one of the oldest banks in France, Société Générale, was found to have engaged in an unauthorized trading which resulted in a total loss of $7 billion. The rogue trader was traced to one employee, Jérôme Kerviel. Although he was found guilty of fraud, the SocGen scandal was not a result of a one man’s wrongdoing; it was the breakdown of the bank’s internal control systems that allowed such fraud to happen. SocGen’s internal control systems overlooked many signals of fraud, including unusual volumes of trade cancellation, profits, and size positions in cash and collateral. Lack of supervision and monitoring of gross positions were also at fault. SocGen’s failure to realize Kerviel’s access to internal system codes from previously working in the back office and neglecting early warnings of fraud contributed to the breakdown. The fact that SocGen’s organizational culture promoted high risk-taking for high profits was also a key factor. In short, SocGen failed to implement an effective compliance and ethics program. This paper aims to analyze the SocGen scandal and its mistakes in internal control by adopting the 7 elements of an effective compliance and ethics program set forth by the U.S. Federal Sentencing Guidelines and provide preventive measures for similar frauds and rogue trading.
One of the oldest banks in France, Société Générale (hereinafter referred to as “SocGen”) was faced with a massive trading scandal in 2008 when a rogue trader, Jérôme Kerviel, was found to have engaged in unauthorized trading that resulted in a 7 billion dollars loss for the bank. Although the main culprit of this scandal might have been revealed to be one individual trader, the breakdown of the bank’s internal control systems cannot escape the blame as well.
SocGen’s internal control systems (i) overlooked Kerviel’s unusual volume of trade cancellation, (ii) left Kerviel with little or no supervision, (iii) only monitored Kerviel’s trades based on net positions and not gross positions, (iv) overlooked the fact that Kerviel was familiar with the bank’s trading information system due to his previous working in the back office, (v) neglected the early alarm sent from the Eurex, (vi) did not take Kerviel’s deviation from the vacation policy seriously, (vii) failed to respond to unusual size positions in cash and collateral, and (viii) created an organizational culture that encourages high risks. These factors are all what essentially allowed one rogue trader to continue and conceal his fraudulent trading for years. Had the right internal control systems been in place, the trading loss may not have escalated to such extent or even, could have been prevented early on.
SocGen’s compliance program failed to follow the 7 elements of an effective compliance and ethics program set by the Federal Sentencing Guidelines. The bank’s inability to detect Kerviel’s unusual volumes of trade cancellations, cash flow, and profits is an example. Moreover, the bank should have terminated his access to the bank’s control systems when Kerviel was first transferred from the back office to the front office, and not leave the bridge between the two offices unnoticed until the fraud was finally discovered. If SocGen took the Eurex emails and enforced a mandatory vacation policy on Kerviel, his fraudulent actions could have been detected early on. Similar frauds can be prevented by adopting the Federal Sentencing Guidelines’ 7 elements of an effective compliance and ethics program. This can be carried out by introducing corporate culture of compliance, improving front office surveillance, monitoring extended settlements, and periodically checking internal systems.
This paper aims to examine the preceding events that led to the 2008 SocGen scandal and discuss the compliance and internal control issues that caused such outcomes. Through analyzing the main causes, this paper will discover compliance lessons that can be learned from the SocGen scandal and introduce preventive measures that have adopted the Federal Sentencing Guidelines of an effective compliance and ethics program.
II. Brief Summary of the 2008 Société Générale Scandal
In January 2008, the French bank trader Jérôme Kerviel was accused of a fraud that cost Société Générale 7 billion dollars’ worth of losses. He was able to escape the bank’s control systems to conceal positions and create unusually high amounts of gains. Kerviel was later held accountable for his fraudulent trade activities. The timeline of the scandal and the aftermath are as follows:
(1) 2000 – 20051)
Kerviel joined Société Générale in 2000 and started working in the back office department of the Global Equity Derivatives Solutions (GEDS) division of the bank. He was an internal auditor and reviewed trades in the GEDS division for four years until he was transferred to the Delta One Listed Products (DLP) trading desk within the GEDS in 2005. As a junior trader in DLP, his role was to take positions on major European stock indexes through low-risk program trading.
(2) From 20052)
Kerviel began engaging in unauthorized trades. He also exceeded the maximum transaction size that he was allowed for individual trades. In doing so, he used his familiarity and knowledge of the bank’s trading information systems from the previous years of working in the back office to cover up his losses.
(3) November 20073)
The surveillance office at Eurex emailed a compliance officer at SocGen that a trader named Jérôme Kerviel had engaged in several transactions that seemed suspicious. Once on November 7, and the second on November 26. SocGen responded that there was nothing irregular and both Eurex and SocGen did not further investigate Kerviel’s trades.
(4) December 20074)
DLP, where Kerviel worked, was put in the arbitrage trading area that involved both trading for the bank’s own account (proprietary trading) and client related trading.
(5) January 20085)
Acting on his belief that the European stock market indexes would move higher by late January, Kerviel made several large trades. However, the markets declined, and the bank was faced with an unrealized loss of one billion euros.
(6) 18 January 2008
SocGen’s shares plunged 8.2 percent in the last hour of trading.6) To prevent further losses, the bank’s management decided that the best option was to close the fraudulent positions. Same day evening, a compliance officer noticed an unauthorized trade that was later traced to Kerviel.7)
(7) 21 – 23 January 20088)
SocGen decided to liquidate Kerviel’s positions. Open positions were closed from 21 January for three days, but during this three-day period the European stock market prices fell sharply.
(8) 24 January 20089)
Société Générale issued a statement disclosing a fraud that resulted in a loss of 4.9 billion euros (worth 7 billion dollars at the time). Later that day, the bank identified the rogue trader to be Kerviel and filed a formal complaint against Kerviel based on three main charges: fraudulent falsification of banking records, use of such records, and computer fraud.
- Aftermath of the scandal and legal repercussions10)
After the scandal, SocGen went on to reinvent its control system, investing more than 200 million euros on improving security of its market activities. It also strengthened the bank’s risk, compliance, audit and monitoring functions. SocGen also took to change its organization culture in order to raise awareness of all employees to fraud risk and reinforce its value on responsibility and commitment.
In March 2014, the Court of Cassation definitively held Jérôme Kerviel’s actions of concealing huge positions accountable for the criminal offences of fraudulent entry of data into an automatic processing system, forgery and use of forged documents, and breach of trust that put the bank and its employees at risk. However, this ruling struck down the earlier decision that had Kerviel pay back SocGen 4.9 billion euros in civil damages, meaning that the court had recognized SocGen’s faults in the trading fraud.11)
The Court of Cassation referred the issue of compensation for the losses caused by the offence to the Versailles Court of Appeals to determine the amount of compensation Kerviel should pay SocGen based on sharing of liabilities. On September 23, 2016, the Court of Appeals ruled that Kerviel is liable for only 1 million euros of the 4.9 billion euros in losses he had caused for SocGen.12)
III. Key factors that caused the downfall
- Control systems that overlooked trade cancellation13)
Kerviel was aware that there was no procedure in place that had control functions to monitor cancel-and-correct activity for each trader, nor was there a system that could detect an unusual level of trade cancellation. If Kerviel was to cancel a trade and enter a new one before the confirmation, the clock for obtaining confirmation would start again.
- Lack of supervision
(1) Kerviel’s initial fraudulent trades from September 2004 to January 2007 were overlooked14)
Kerviel regularly took intraday positions that were not assigned to him, given his low level of seniority at the time. The supervision could not detect Kerviel taking overnight positions concealed by fictitious opposite trades. Even though the manager identified a non-covered overnight position of approximately 10 million euros on Allianz shares, there was no formal reprimand. To make matters worse, this manager failed to detect Kerviel’s fraudulent acts.
(2) There was little or no supervision or Kerviel from 2007 onwards
Kerviel’s more aggressive engagement in unauthorized positions from 2007 onwards was mainly due to lack of supervision, starting with the resignation of his direct supervisor. Kerviel’s immediate superior resigned in January 2007 and there was no immediate replacement for two and a half months. During this period, Kerviel’s positions were only validated by his desk’s senior trader.15) Even after the arrival of a new manager in April 2007, the day-to-day supervision was still weak. The new manager failed (i) to control the activities of each trader, (ii) to detect the concealed positions taken in 2007 and 2008, (iii) and to detect an increased amount of intraday activity.16) The signs were all there, but Kerviel’s supervisors failed to notice and react to these signals.
- No monitoring of Kerviel’s gross positions17)
At the time, SocGen was only monitoring Kerviel’s net positions and not gross positions. Had the bank been monitoring his gross positions, it would have been able to detect Kerviel’s unusual large volume of trading activities and suspicions would have been raised to lead an investigation of Kerviel’s transactions. Unfortunately, SocGen failed to detect this red flag.
- Kerviel’s familiarity with the bank’s trading information system18)
SocGen’s failure to separate the front, middle and back office can also be attributed as the cause of the 2008 scandal. Kerviel was previously employed in the back office in 2000 and worked there for a few years before transferring to the front office in 2005. It was then that he obtained the IT access codes and used them to log into the bank’s systems to cancel and modify the false trades he had entered later as a trader.19) His understanding of the back office’s systems and procedures made it easy for Kerviel to conceal positions and create fraudulent trades that would escape the bank’s monitoring system.
- Neglecting early alarm set off by the Eurex20)
Although Société Générale’s monitoring may have failed to detect Kerviel’s unusual transactions, the Eurex Exchange noticed something unusual in Kerviel’s transactions and alerted a compliance officer at SocGen of this matter via its email on November 7, 2007. Unfortunately, the risk-control expert at SocGen overlooked the irregularity and later responded that Kerviel’s after-hours trading was due to the recent volatility increase on the U.S. and European stock markets.
On November 26, Eurex sent a second email message to SocGen asking for more details, which SocGen replied on the following December 10. After the second email exchange both parties dropped the matter of Kerviel’s trades.
It was five weeks later that Kerviel’s trades set off another red flag. By that time, it was too late, and the bank’s losses exacerbated to 7 billion dollars. Had the bank not overlooked the early warning given by the Eurex and took the matter seriously, the losses would not have escalated so much.
- Vacation policy not followed21)
One of the primary rules of internal control is that a trader who does not take vacation is a trader who does not want to let anyone else look at his book. This was not kept in the Kerviel’s case. The fact that he did not take days off in 2007 alone should have alerted the control office that there was something suspicious going on. If the mandatory vacation policy had been enforced properly, it would easily have prevented Kerviel’s fraudulent trading entries.22)
- Not responding to unusual size positions in cash and collateral requirements23)
Fictitious transactions to conceal positions can be often detected through irregular size positions in cash and collateral because they do not generate any cash or collateral movements to balance out the cash and collateral needs of the real trades. The fact that SocGen’s control functions overlooked this matter in its cash and collateral reports would explain why it failed to detect Kerviel’s rogue trading.
- Organizational culture that encourages risk-taking
Traders in SocGen were encouraged to engage in proprietary trading, and employees were judged on the amount of profit that was being made.24) An organizational culture where employees are driven to take risks and make high profits motivates traders to engage in fraudulent transactions. This may be why even with the unusual amounts of profits Kerviel gained compared to his authorized position, he was not questioned thoroughly.
IV. Preventive measures for rogue trading
- Direct solution to the issues related to SocGen25)
The obvious and most direct solution to prevent issues listed above that caused Kerviel’s rogue trading is to tighten internal control procedures in order to better monitor traders and detect fictitious trade entries. Had the following control measures been taken, Kerviel’s fraudulent trading would have been detected early on. (i) Introduce systems that can monitor unusual volumes of trade cancellations and flag any trader who seems suspicious. (ii) Make sure each trader is properly supervised, especially when the supervisor is temporary or new. (iii) Look at gross positions along with net positions as well. (iv) Just like how the downfall of the Barings Bank was due to having Nick Leeson in charge of both the front and back office, having Kerviel promoted from back office to front office allowed him to misuse his knowledge of the back office.26) If preventing such promotion is inevitable, all system entitlements the previous back office personnel had should be terminated before the transfer.27) (v) Make sure vacation policy is enforced for all traders and investigate when it is not followed properly. Mandatory vacations and assigning the trader’s portfolio to another peer trader can help detect any uncanny activity.28) (vi) Monitor cash and collateral requirements at an individual trader level. (vii) If a trader seems to be making profit that exceeds expectations, be suspicious of the earning patterns. It may not always right, but it could lead to a discovery of possible trading frauds.
- General solution to prevent similar frauds: Adopting the 7 elements of an effective compliance and ethics program
In fact, the factors that led to the scandal all prove that SocGen failed to secure the 7 elements of an effective compliance and ethics program articulated in the Federal Sentencing Guidelines (hereinafter referred to as “FSG”). The 7 elements are: (i) standards of conduct, policies and procedures; (ii) oversight and accountability; (iii) education, communication and awareness; (iv) delegation of authority; (v) enforcement, discipline and incentives; (vi) monitoring and auditing and risk assessment; (vii) ongoing program improvements.29) SocGen’s breakdown in control functions, lack of supervision and discipline, failure to detect signals of fraud, and its risk-taking culture are the result of not implementing the 7 elements in the organization’s compliance and ethics program.
Therefore, adopting an effective compliance and ethics program articulated in the FSG can be a general solution to prevent rogue trading. FSG §8B2.1(a) requires organizations to (i) exercise due diligence to prevent and detect criminal conduct; and (ii) promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.30) The following preventive measures represent a more general approach to prevent unauthorized trading, with reference to the 7 elements in the FSG model of an effective compliance and ethics program.
(1) “Tone from the top”: Discourage corporate culture where high risks are deemed unproblematic for the sake of high profits
The reasons why Kerviel’s initial unusual transactions were not reprimanded, why SocGen did not take Eurex Exchange’s initial warning regarding Kerviel’s transactions, why it did not question Kerviel’s unusually high profit can be attributed to the organizational culture of encouraging profits. Having an organizational culture where taking high risks is deemed to be unproblematic for the sake of obtaining high profits can also lead to control functions turning a blind eye on possible fraudulent acts. Such corporate culture should be discouraged. Instead, a culture of compliance should be promoted throughout the organization to detect and prevent unauthorized training.
FSG §8B2.1(b) explains that in order to promote an organizational culture that compliance with law, the organization’s governing authority should be knowledgeable of the compliance program and exercise reasonable oversight in its implementation.31) In the SocGen’s case, Kerviel not being reprimanded for initially engaging in intraday positions was in direct opposite of not only §8B2.1(b)(2) but also §8B2.1(b)(6) as SocGen lacked appropriate disciplinary measures for Kerviel’s misconduct.
Therefore, a culture of compliance that emphasizes honesty, integrity, accountability and responsible risk-taking through rigorous compliance control systems must be articulated and followed by the top-level senior management.32) Effective training programs should be conducted periodically to educate traders about the importance of reporting unusual trading activities, to teach non-trading employees to be sensitive to suspicious activities that may give rise to future compliance issues33)
(2) Improve front office supervision34)
The 7 elements of the FSG’s effective compliance and ethics program include establishing standards and procedures to prevent and detect criminal conduct, not giving substantial authority to any individual with a history of misconduct, and delegation of authority in keeping day-to-day operations in accordance with ethical conduct.35)
Having more than one person and chain of control responsible for monitoring trading activity and having managers discuss with traders through both direct and indirect reports to look for any signs of unusual activity can help monitor and detect rogue trading. Instituting an affirmative “open-door” policy with the management can prevent unexpected losses early on.
(3) Monitor extended settlements and “rolling” of positions36)
Kerviel used extended forward settlement dates to conceal his fraudulent trade activities. Firms can develop reports to review transactions that feature extended settlements, including their frequency and length, and examine atypical extensions. Another solution that embodies §8B2.1(b)(2) would be having a designated middle or back office personnel to independently contact the counterparty and confirm each extended settlement trade shortly after the order is created.
(4) Periodically check internal control systems37)
FSG also highlights periodical evaluation of the compliance program’s effectiveness and assessment of risk of criminal conduct, making improvements along the implementation process.38) This means that control functions should periodically check trading strategy, business performance, and risk profile. Independent validation of trading positions is also important. The organization should routinely check if the system for identifying unauthorized trading is working properly.
V. Compliance lessons learned from the scandal
The most important lesson that can be learned from the SocGen scandal is the importance of implementing dedicated measures to prevent and detect fraudulent trade activities.39) Having more than one person and control chains monitoring traders, and instituting control systems that monitor unusual volumes of cash flow, profit, and trade cancellations are some measures that can be effective in detecting rogue trading.
Another lesson is how lack of monitoring and supervision can lead to catastrophic outcomes. Considering how Kerviel’s volume of unauthorized transactions increased when he was left unsupervised or was under weak supervision, maintaining a strong surveillance of the front office is particularly important. Managers discussing with traders through both direct and indirect reports, introducing an “open-door” policy, and having the middle or back office confirm front office’s trading activities by contacting counterparties of suspicious transaction can help prevent huge losses.
Lastly, the SocGen scandal teaches the significance of creating a corporate culture of compliance. Senior management should articulate the importance of compliance in all areas of business activities. An organization culture where reports of suspicious transactions are not ignored and where control teams are allowed to rigorously investigate such transactions and are not reprimanded or looked down upon when no compliance issue has been found is needed. Had the management done so, SocGen would have been able to detect Kerviel’s rogue trading early on and not miss the signals it was given prior to the bank’s huge loss.
In summary, the 2008 Société Générale trading loss may have been caused by the actions of one individual rogue trader, Jérôme Kerviel, but his employer, Société Générale, is also to blame. This was not a result of one individual’s fraudulent acts, but a combination of Kerviel’s fictitious acts and the breakdown of SocGen’s internal control functions that consequently exacerbated into huge losses. There were numerous signs that showed rogue trading, but at the time, SocGen’s compliance and internal control systems lacked the ability to detect them, resulting in a 7 billion dollars’ worth of losses for the bank.
In essence, the SocGen scandal demonstrates the importance of following FSG’s 7 elements of an effective compliance and ethics program. In doing so, instituting dedicated measures that can prevent and detect unauthorized transactions may come with a cost. However, such expenses are necessary to avoid detrimental losses in the future that may arise from rogue trading. The scandal also provides a lesson that shows how insufficient monitoring and supervision can lead to disastrous outcomes. Lastly, the SocGen scandal highlights the importance of “toning from the top” and creating an organizational culture of compliance. In a company that has successfully created a culture of compliance, signals of fraudulent trading activities would not be ignored.
In the future, any financial institutes that deal with trading, Société Générale included, must work on improving and implementing effective control systems for better monitoring and detecting compliance risk. As of means to create a corporate culture for compliance, companies should work on training traders to report any suspicious transactions without fearing repercussions and educate non-trading employees to be aware of fraud risk. Senior management should also take the lead in emphasizing compliance in all business activities and provide the control functions of the company with sufficient financial and managerial support to engage in investigations and conduct regular testing on its control systems. These implements all have one thing in common: they embody the FSG’s 7 elements of an effective compliance and ethics program.
Allen, Steve. “Control Lessons from the Societe Generale Fraud: What Patterns Emerge from Rogue Trading Incidents of the Recent Past?” Bank Accounting & Finance, vol. 21, no. 6, 2008.
Baker, C. Richard, et al. “Breakdowns in Internal Controls in Banking Trading Information Systems: The Case of the Fraud at Société Générale.” International Journal of Accounting Information Systems, vol. 26, 2017, pp. 20–31.
Broughton, Philip Delves. “Take Those Two Weeks Off —Or Else.” The Wall Street Journal, 28 Aug. 2012, www.wsj.com/articles/SB10000872396390444914904577615483583558306.
Canac, Pierre, and Charlene Dykman. “The Tale of Two Banks: Société Générale and Barings.” Journal of the International Academy for Case Studies, vol. 17, no. 7, Jan. 2011, pp. 11–32.
“Elements of an Effective Compliance Program.” University of Illinois System, www.ethics.uillinois.edu/compliance/elements_of_an_effective_compliance_program.
Federal Sentencing Guidelines Manual §8B2.1 (2015).
“French Court Upholds Rogue Trader Jérôme Kerviel’s Prison Sentence.” The Guardian, 19 Mar. 2014, www.theguardian.com/business/2014/mar/19/french-rogue-trader-jerome-kerviele-prison-societe-generale.
Moodie, Jennifer. “Internal Systems and Controls That Help to Prevent Rogue Trading.” Journal of Securities Operations & Custody, vol. 2, no. 2, 2009, pp. 169–180.
Reuters Staff. “TIMELINE: Timeline of Events in SocGen Fraud Case.” Reuters, 28 Jan. 2008, www.reuters.com/article/us-socgen-fraud-timeline/timeline-timeline-of-events-in-socgen-fraud-case-idUSL2956003920080129.
Schwartz, Nelson D., and Katrin Bennhold. “Société Générale Scandal: ‘A Suspicion That This Was Inevitable.’” The New York Times, 5 Feb. 2008, www.nytimes.com/2008/02/05/business/worldbusiness/05iht-05bank.9745008.html.
Sebag, Gaspard, and Fablo Genedetti Valentini. “Kerviel Bill Cut to $1 Million From $5.5 Billion by Judges.” Bloomberg, 23 Sept. 2016, www.bloomberg.com/news/articles/2016-09-23/kerviel-must-pay-socgen-1-million-euros-over-2008-trading-loss.
Societe Generale. “Kerviel Case.” Societe Generale, www.societegenerale.com/en/news/newsroom/kerviel-case#Q2.
U.S. Securities and Exchange Commission, Office of Compliance Inspections and Examinations. Strengthening Practices for Preventing and Detecting Unauthorized Trading and Similar Activities, 27 Feb. 2012. www.sec.gov/about/offices/ocie/riskalert-unauthorizedtrading.pdf.
1) Baker, C. Richard, et al. “Breakdowns in Internal Controls in Banking Trading Information Systems: The Case of the Fraud at Société Générale.” International Journal of Accounting Information Systems, vol. 26, 2017, pp. 20–31.
2) Id. at 25.
3) Schwartz, Nelson D., and Katrin Bennhold. “Société Générale Scandal: ‘A Suspicion That This Was Inevitable.’” The New York Times, 5 Feb. 2008, www.nytimes.com/2008/02/05/business/worldbusiness/05iht-05bank.9745008.html.
5) Baker et. al., supra note 1 at 22.
6) Reuters Staff. “TIMELINE: Timeline of Events in SocGen Fraud Case.” Reuters, 28 Jan. 2008, www.reuters.com/article/us-socgen-fraud-timeline/timeline-timeline-of-events-in-socgen-fraud-case-idUSL2956003920080129.
7) Baker et. al., supra note 1 at 22.
8) Reuters, supra note 6.
10) Societe Generale. “Kerviel Case.” Societe Generale, www.societegenerale.com/en/news/newsroom/kerviel-case#Q2.
11) “French Court Upholds Rogue Trader Jérôme Kerviel’s Prison Sentence.” The Guardian, 19 Mar. 2014, www.theguardian.com/business/2014/mar/19/french-rogue-trader-jerome-kerviele-prison-societe-generale.
12) Sebag, Gaspard, and Fablo Genedetti Valentini. “Kerviel Bill Cut to $1 Million From $5.5 Billion by Judges.” Bloomberg, 23 Sept. 2016, www.bloomberg.com/news/articles/2016-09-23/kerviel-must-pay-socgen-1-million-euros-over-2008-trading-loss.
13) Allen, Steve. “Control Lessons from the Societe Generale Fraud: What Patterns Emerge from Rogue Trading Incidents of the Recent Past?” Bank Accounting & Finance, vol. 21, no. 6, 2008.
14) Baker et. al., supra note 1 at 24.
15) Allen, supra note 13.
16) Baker et. al., supra at 24.
18) Canac, Pierre, and Charlene Dykman. “The Tale of Two Banks: Société Générale and Barings.” Journal of the International Academy for Case Studies, vol. 17, no. 7, Jan. 2011, pp. 11–32.
19) Moodie, Jennifer. “Internal Systems and Controls That Help to Prevent Rogue Trading.” Journal of Securities Operations & Custody, vol. 2, no. 2, 2009, pp. 169–180.
20) Schwartz & Bennhold, supra note 3.
21) Broughton, Philip Delves. “Take Those Two Weeks Off —Or Else.” The Wall Street Journal, 28 Aug. 2012, www.wsj.com/articles/SB10000872396390444914904577615483583558306.
22) Allen, supra note 13.
24) Schwartz & Bennhold, supra note 3.
25) Allen, supra note 13.
26) Canac & Dykman, supra note 18 at 25-26.
27) U.S. Securities and Exchange Commission, Office of Compliance Inspections and Examinations. Strengthening Practices for Preventing and Detecting Unauthorized Trading and Similar Activities, 27 Feb. 2012. www.sec.gov/about/offices/ocie/riskalert-unauthorizedtrading.pdf.
28) Id. at 6.
29) “Elements of an Effective Compliance Program.” University of Illinois System, www.ethics.uillinois.edu/compliance/elements_of_an_effective_compliance_program.
30) Federal Sentencing Guidelines Manual §8B2.1(a) (2015). §8B2.1(b)(2).
32) U.S. Securities and Exchange Commission, supra note 27 at 7.
34) U.S. Securities and Exchange Commission, supra note 27 at 3-5.
35) §8B2.1(b)(1); §8B2.1(b)(2); §8B2.1(b)(3)
36) U.S. Securities and Exchange Commission, supra note 27 at 5.
37) Id. at 6-7.
38) §8B2.1(b)(5); §8B2.1(c).
39) Moodie, supra note 19 at 174.