More On Legal & Compliancefrom The Advisor's Professional Library
- Whistleblowers A whistleblower is any individual providing the SEC with original information related to a possible violation of federal securities law. The Dodd-Frank Act established a whistleblower program that enables the SEC to reward individuals who voluntarily provide such information.
- Conducting Due Diligence of Sub-Advisors and Third-Party Advisors Engaging in due-diligence of sub-advisors isnt just a recommended best practice it is part of the fiduciary obligation to a client. An RIA should be extremely reluctant to enter a relationship with a sub-advisor who claims the firms strategy is proprietary.
Fresh from an FSA investigation into LIBOR rigging, Barclays is now the target of two more inquiries—this time by the U.S. Federal Energy Regulatory Commission (FERC), the Justice Department and the SEC over its actions on energy prices and possible violations of the U.S. Foreign Corrupt Practices Act.
Reuters reported Wednesday that Barclays said FERC was examining the possibility that the bank may have manipulated power prices in the western U.S. from late 2006 to 2008. It said that FERC could propose penalties as early as this week, and added that the bank would "vigorously" defend itself.
The other action comes as the Financial Services Authority (FSA), the British regulator and fraud prosecutor, investigates the bank's ties with Qatari investors over a vast infusion of 11.5 billion pounds ($18.5 billion) that enabled the bank to avoid a government bailout in 2007. At issue are fees reportedly paid by Barclays to the Qatar Investment Authority.
The SEC and the Justice Department are probing whether relationships Barclays has with third parties who help it get or keep business comply with the U.S. Foreign Corrupt Practices Act. According to the report, Barclays declined to comment on whether the U.S. investigation is tied to the bank's transactions with Qatar.
Barclays CEO Antony Jenkins said in another report that the bank has taken a number of actions as a result of a "very rigorous" internal investigation connected to allegations of LIBOR rigging. In June Barclays was fined $450 million by U.S. and U.K. regulators for its part in a multibank global manipulation of the interbank rate.
He was quoted saying, "In some circumstances this has led to people being removed from the firm, in some cases it's led to disciplinary action, and along with that there has been a series of compensation actions ... appropriate to individuals' involvement." He declined to provide specifics.