More On Legal & Compliancefrom The Advisor's Professional Library
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
At the behest of Sen. Charles Grassley (R-Iowa), the Government Accountability Office (GAO) is gearing up to perform a broad review of two of the Securities and Exchange Commission's divisions--the Office of Compliance, Inspection, and Examination (OCIE) and the SEC's enforcement unit.
According to published reports, Grassley, chairman of the Senate Banking Committee, asked the GAO to examine these SEC divisions because of the regulator's handling of an insider trading investigation involving Pequot Capital Management, a $7 billion hedge fund run by Arthur J. Samberg.
The GAO's priorities will be to zero in on whether the SEC properly monitors self-regulatory organizations like the New York Stock Exchange and NASD. Grassley also recently pressed the heads of the Treasury Department, SEC, and other federal agencies to tell him what information hedge funds are required to report to them.