More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- 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.
The former chief executive of Freddie Mac may face a civil action as the government ramps up an investigation of disclosure practices at the mortgage finance giant and its sister company, Fannie Mae, The New York Times reported Wednesday, citing people briefed on the investigation.
The executive, Richard Syron, a former president of the American Stock Exchange and now an adjunct professor and trustee at Boston College, has received a so-called Wells notice from the Securities and Exchange Commission, an indication the agency is considering an enforcement action against him.
According to the paper, Syron, who has not been accused of any wrongdoing, is the latest executive mentioned in the government's sweeping examination of the two government-controlled companies. Three others have already been sent Wells notices, and at least two others are thought to have received them, the people briefed on the investigation said. Last week, Daniel Mudd, the former chief executive of Fannie Mae, received a Wells notice, and another former Fannie executive is expected to receive one as well, these people said.
The SEC's long-running investigation is now zeroing in on how Freddie and Fannie publicly disclosed their exposure to risky loans and whether those depictions were too rosy, according to the people briefed on the investigation who spoke on the condition of anonymity because the inquiry is not complete. Although the companies offered detailed snapshots of their mortgage portfolios, the SEC is exploring whether they underreported their ownership of subprime loans and mortgages that required few documents from borrowers.
The government continues to examine the potential culpability of people and agencies involved in the mortgage mess and the subsequent financial crisis, The Times says.