Reference no: EM133424115

Case Study: Nationomic is a regulated firm operating in a sector of your choice. For several years Nationomic has pursued an aggressive growth approach, opening a number of new offices to support its expansion plans. During this period staff recruitment levels have been high, with large numbers of new employees throughout its numerous offices, many on short-term contracts. You are the head of regulatory compliance at Nationomic, a long-standing member of staff who has worked with the firm in a variety of capacities over many years. Throughout the period of expansion, as new products and services were introduced and numerous new staff joined the firm, in your professional capacity you regularly urged caution about how these changes were being made. Particularly, you highlighted concerns about the adequacy of customer suitability assessment and identified potential inadequacies in the recruitment processes for new staff. You also raised concerns about some business managers' attitude towards risk management within the firm, particularly those who were new to this business sector. It was apparent from your compliance activities, your observations, and your discussions with members of other oversight and assurance functions, that some managers demonstrated little understanding of the risks inherent within a regulated firm. Furthermore, some managers appeared to have little appreciation of how aggressive sales practices could be detrimental to the company. There was also a lack of understanding about the potentially negative aspects of the products and services offered by the firm, and the way in which these products and services might be targeted by criminals. Although you have flagged the risk implications of these findings on numerous occasions (both verbally at the board meetings you attended, and in the reports you produced for the board and senior management) to date little appears to have been done to address them. Furthermore, your focus on training and education to address some of these concerns over recent months has been limited to a significant degree by staff availability and other business needs. You have therefore attempted to alleviate these difficulties in the short term through a robust, risk-based, focused compliance reporting and monitoring regime undertaken by experienced members of your compliance team, in an attempt to allow possible issues to be identified and flagged speedily to the executive board, senior management and business units. Having examined the output of the recent monitoring activities, which focused on the risk management systems and controls within the firm, you note several issues that still give you cause for concern, requiring immediate attention. You arrange a meeting with your senior compliance team members to discuss a plan of action to address these issues, both in the immediate and longer term. From the above scenario identify what you believe to be the key risks (regulatory and others) to Nationomic.

Question: In a paper to be read by your compliance team colleagues prior to the meeting, explain why these should concern the executive board of a regulated firm and why, as a regulatory compliance professional, the attitude and approach of some of the stakeholders referred to in the above scenario causes you concern. Support your answers with relevant examples.