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Regulation White Collar Crime

Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability

This article explores legal developments over the past year that may impact compliance officer personal liability.


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On July 18, 2019, a federal grand jury in Cincinnati indicted the former compliance officer of a pharmaceutical distributor, James Barclay, the pharmaceutical distributor, and others with conspiring to illegally distribute controlled substances. Among other things, the indictment alleged that Barclay, who was responsible for supervising the distributor’s compliance with drug laws, and others sold millions of painkiller pills to pharmacies, while regularly exceeding the company’s internal threshold limits and ignoring obvious signs of diversion and abuse. When the company’s internal suspicious order monitoring system flagged many of these orders, Barclay and other defendants allegedly failed to conduct any due diligence or report the suspicious orders to the Drug Enforcement Administration (DEA), as required by law. The Barclay indictment was issued around three months after federal prosecutors in Manhattan brought felony criminal charges against a different drug distributor, its former Chief Compliance Officer (CCO), William Pietruszewski, and others on allegations that they opened new customer accounts without conducting due diligence and sold customers controlled substances despite knowing they were being distributed for illegitimate purposes. On April 19, 2019, Pietruszewski pleaded guilty to conspiracy to distribute controlled substances, conspiracy to defraud the U.S., and willful failure to file suspicious order reports with the DEA.

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