An interesting case because it holds a firm's President liable not so much for what he did or didn't directly do, but, rather, for the fact that he "knew or should have known" that his Chief Compliance Officer and AML Compliance Officer were not performing their respective compliance jobs. It's a bit of a dicey proposition for FINRA to simply posit a President's liability upon an Exit Report, as those are frequently contentious affairs (that is the Staff's allegations and the firm's responses).  Moreover, if the exit reports merely cite "concerns" but do not elevate those to formal charges, then it's questionable as to what the firm's President should do.  Again, we need to keep in mind that The CCO and AMLCO were hired to do their jobs -- those jobs were not to be done by the President, who has other responsibilities.  It's one thing for a President to "know" of the malfeasance or nonfeasance of his compliance officers, and such knowledge should compel prompt action.  However, when a regulator says that a President "should have known" of compliance officers misconduct but the main proof is that he/she was on notice per an exit report, well, I'm not convinced that such a predicate is sufficient. 

As with all regulatory matters, this case may well be "fact specific," and the details of what the President knew may be fare more extensive than what's presented in FINRA's monthly squib.  Of course, I'd like to see the exit reports for major firms, and then I would like to see whether FINRA will hold the presidents of such members to the same standards.