More On Legal & Compliancefrom The Advisor's Professional Library
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
- 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.
The United States government--both the Administration and the Congress--began moving over the weekend of Sep. 20-21 to "address the underlying problem" in the financial system, in the Sep. 19 words of Treasury Secretary Henry Paulson, by giving Treasury the ability to purchase up to $700 billion in troubled mortgage-related assets from financial institutions headquartered in the U.S. over the next two years.
Members of Congress from both parties voiced support for the proposed legislation necessary to conduct the massive bailout, though it appears that Democrats may require more oversight than the simple twice-yearly reports to Congress that the brief draft proposal released Sep. 20 requires, will call for protection for individual mortgage holders, and will want some limitation on the compensation for the executives that will run the massive Treasury operation.
Paulson himself suggested in a series of appearances Sep. 21 on the Sunday morning television talk shows that the purchases might also be made from non-U.S. banks.
Meanwhile, on the night of Sep. 21, the last remaining independent investment banks--Morgan Stanley and Goldman Sachs--applied to the Federal Reserve to become bank holding companies, and the Fed announced that it had agreed to the request
Democratic Presidential candidate Barack Obama voiced support for the proposal in general on Sep. 21, but argued that it should be "structured in a way that maximizes the ability of taxpayers to recoup their investment," and that "we cannot have a plan for Wall Street banks that does not help homeowners stay in their homes and help distressed communities."
Meanwhile, on Sep. 19, the Treasury announced it would temporarily guarantee publicly offered retail and institutional money market mutual funds for those funds that pay a fee to participate in the program.
Paulson said Sep. 19 that the government must implement a program to remove illiquid mortgage-related assets that are "clogging up our financial system and undermining the strength of these otherwise sound financial institutions."