More On Legal & Compliancefrom The Advisor's Professional Library
- Proxy Voting RIAs are not required to vote proxies on behalf of their clients. However, when an RIA does assume responsibility for voting proxies, the firm’s policies and procedures should help to ensure that votes are cast in the best interest of clients.
- Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not. Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
When Hurricane Sandy blew into town, in addition to all the storm damage, it brought a whole lot of potential problems, as well as nastiness that had nothing to do with the weather and everything to do with man's baser instincts. FINRA and the Securities and Exchange Commission have issued warnings and bulletins to help both advisors and the public better cope.
For financial professionals, FINRA issued a notice regarding regulatory and compliance relief for those directly affected by the storm.
Regulatory Notice 12-45 deals with a number of issues, "including emergency office relocations, continuing education requirements for registered personnel, registered personnel engaged in active military duty, regulatory filings and inquiries, membership applications and customer communications."
The body also pointed out that there are additional Sandy advisories on its website at a dedicated page.
For the public, the SEC issued an investor alert regarding investment and other scams, such as Ponzi schemes, that surface in the wake of the storm and other such calamities. A particularly popular form of such disaster scams that it warned of was the cleanup scam, in which "promoters [tout] companies purportedly involved in cleanup efforts…"
In particular, the agency warned, "We also heard about fraudsters targeting individuals receiving compensation from insurance companies. Individuals, including those receiving lump-sum insurance payouts, should be extremely wary of potential investment scams related to Hurricane Sandy." [Emphasis theirs.]