More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
The Financial Services Committee of the U.S. House, chaired by Rep. Barney Frank (D-Massachusetts) will hold a hearing on Monday, January 5, at 2:00 PM Eastern time to discuss the Ponzi scheme allegedly perpetrated by Bernard Madoff and his firm, Bernard L. Madoff Investment Securities LLC.
In filing its charges against Madoff and asking a Federal judge in New York to freeze his assets and appoint a receiver for his business on December 11 (which was granted), the SEC quoted Madoff as saying that he had conducted a "giant Ponzi scheme" that amounted to at least $50 billion. The SEC confirmed that Madoff had met a December 31 deadline to supply to the Commission a list of his personal assets.
Rep. Paul Kanjorski (D-Pennsylvania), a member of the committee and chair of the House capital markets subcommittee, said in a December statement that hearings "will help us to discern whether or not the SEC had the resources needed to get the job done, how such a sizable scheme could have evaded detection for so long, and what new safeguards we need to put in place to protect investors." Kanjorski said that hearings on the Madoff scandal will help guide Congress "in undertaking the most substantial rewrite of the laws governing the U.S. financial markets since the Great Depression."
A live Webcast of the hearings is available through the Committee's Web site here.