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.
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
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.]