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.
The Federal Bureau of Investigation arrested two former employees of Bernard L. Madoff's investment firm and said charges against them in connection with the multibillion-dollar Ponzi scheme would be unsealed later Thursday.
The Wall Street Journalreports Annette Bongiorno was arrested at her home in Boca Raton, Fla., and JoAnn "Jodi" Crupi was taken into custody at her Westfield, N.J. home, an FBI spokesman said.
No details of the pending charges were released.
In June, according to the paper, Federal prosecutors in Manhattan filed civil forfeiture complaints against Bongiorno and Crupi that accused them of knowingly assisting in Mr. Madoff's fraud. The prosecutors sought the seizure of $5 million in assets from the two women, including money, homes and cars, and amended their complaint against Ms. Bongiorno in August to ask for an additional $2 million.
As the Journal notes, Madoff is serving a 150-year sentence in a federal prison in North Carolina after pleading guilty in March 2009 to perpetrating an enormous fraud, for which a trustee is seeking to recover for investors as estimated $20 billion. The trustee, Irving Picard, filed lawsuits against Bongiorno and Crupi last week, also seeking to recover their assets.
Bongiorno, who had worked for the firm since 1968, was a supervisor of Madoff's back-office staff and dealt with customers seeking information about their accounts, according to prosecutors. Crupi had worked there since 1983 and took in client funds.
Roland Riopelle, a lawyer for Bongiorno, told the paper prosecutors have indicated they would file criminal charges against her for about a year, but he hadn't yet seen the details. "She intends to defend herself in connection with the charges," he said.