Compliance Department

A compliance department is where the pod people from The Invasion of the Body Snatchers end up.

Those who enforce the rules of their industry work in compliance. There are compliance departments from the federal level down to the local level. Each level is occupied by people trained to enforce the rules at that level. They may not be able to dance, but uh...they know the rules.

Where compliance department drama gets juicy, there is usually fraud, bad risk-taking, or bad bureaucracy, such that people are allowed to perform tasks for which they are not qualified.

Example: a hedge fund bet big on Sears becoming a huge success. As part of their investment indenture, on any given bet, should it decline more than 25%, the fund would then be required to sell all of its holdings. That hedge fund must comply with their charter, and it is the job of the compliance department to track issues like the above, and be certain that the fund is, in fact, complying with what they said they would do.

To wit, Bernie Madoff (in theory) had a compliance department. Guess they missed some stuff…like, everything from 1992 to 2009.