June 1, 2009 Comments (0) Blog, Securities Fraud

New Investor Asset Custody Rules Proposed

(Last Updated On: July 17, 2015)

The SEC approved the issuance of new rules to stregthen the investment advisor custody requirements. In remarks at the open meeting, Chairman Mary Schapiro said the action was in response to major investment scams, including the alleged Bernard Madoff Ponzi scheme. The propsal wuld add a requirement that all registered advisors with custody of client assets must undergo a “surprise” examination by an independent public accountant. Investment advisors whose client assets are not held by a firm independent of the advisor would be required to obtain a written report from an accountant registered with the Public Accounting Oversight Board about the advisor’s controls.

Ms. Schapiro said that approximately 9,600 registered investment advisors have custody of client assets in one form or another. They either control the assets directly or through an affiliate. Given investors’ concerns about the safety of these assets, the chairman said the SEC’s proposal would substantially increase the controls that apply to investment advisors that maintain custody of client assets.

If you have questions regarding an investment advisor or broker dealer, The White Law Group can help. To speak to a securities attorney, please call our Chicago Office at 312-238-9650 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investors protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

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