More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- 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.
After what looks to be violations of the Certified Financial Planner Board’s Standards of Professional Conduct, Alan Goldfarb, chairman of the CFP Board of Directors, has resigned effective immediately along with two members of the Board’s Disciplinary and Ethics Commission (DEC).
The CFP Board stated Friday that it became aware of “broad allegations that members of the board and other volunteers may have violated provisions of the CFP Board’s Standards of Professional Conduct.”
After hearing of the allegations, the CFP Board said that its board of directors created a “special committee” made up of public board members who have no ties to the financial services industry and retained outside counsel to investigate and report its findings directly to the committee.
The special committee, the CFP Board says, “found sufficient merit in the allegations against Mr. Goldfarb and the two members of the DEC to refer them for further proceedings under CFP Board’s Disciplinary Rules and Procedures.”
After being presented with the committee’s findings, Goldfarb and the two DEC members resigned from their positions during a special October 31 meeting.
Kevin Keller, CEO of CFP Board, told AdvisorOne in an email message that the allegations "relate to possible violations of CFP Board’s Standards of Professional Conduct. The matter has been referred to the DEC for further proceedings under our Disciplinary Rules and Procedures. To be sure, no final determination has been made; if a public sanction is warranted, it will be made public once the process is complete."
Added Keller: "While proceedings under CFP Board’s Disciplinary Rules and Procedures are confidential, and because of that confidentiality provision CFP Board cannot disclose details related to allegations against CFP professionals, I think it is important to clarify that the matter announced today does not involve alleged violations of criminal or civil laws."
On Oct. 31, Goldfarb sent a letter to the Board of Directors, CFP professionals and the public, stating in part: “I am certain that this was a misunderstanding, and I welcome the opportunity to engage in good faith the CFP Board’s enforcement process consistent with its Disciplinary Rules and Procedures.”
Goldfarb added: “As Chair of CFP Board’s Board of Directors, it is my responsibility to put the interests of the organization ahead of my own. I believe that under the circumstances, it is best for the organization that I resign pending the outcome of the process as both chair and a member of the board of directors, effective immediately.”
In addition, 2012 Chair-elect Nancy Kistner was elected to fill the remainder of Goldfarb’s term. She will continue to chair the Board of Directors through Dec. 31, 2013.