When Bernie Madoff’s fraud was exposed it was labeled a Ponzi scheme. Madoff was not investing the money as promised. He was using new investment money to pay old promised returns. I thought it would useful to look back at the original Ponzi scheme to see if offered insight to today’s world of compliance. I … Read more »
SEC Exam Priorities for 2014
Last year the Office of Compliance Inspections and Examinations at the Securities Exchange Commission laid out their examination priorities for 2013. Apparently, it is now an annual event. OCIE published its 2014 Examination Priorities. For advisers and fund managers the priorities list three core risks: Safety of Assets and Custody Conflicts of interest in the … Read more »
Weekend Reading: Year Zero
It was December and I needed a “Y” book to finish off my A-to-Z reading challenge. I had my eye on Year Zero by Ian Baruma. But I couldn’t get my hands on a copy and the year was coming to a close. I noticed a different Year Zero by Jeff Long. I had read … Read more »
Compliance Bricks and Mortar – JP Morgan ALM Edition
JP Morgan paid $2 billion in fines and disgorgement for failing to file a suspicious activity report against Bernie Madoff. I provided my two cents. Here are some other views. The invincible JP Morgan by Felix Salmon This is sheer unmitigated — and, yes, probably criminal — incompetence. It takes a very special kind of … Read more »
J.P. Morgan’s Madoff Failure
Yesterday J.P. Morgan agreed to forfeit $1.7 billion for its failure related to the Bernie Madoff fraud, plus several hundred million in fines. As part its deferred prosecution agreement, the bank agreed that it did not have the proper systems in place to catch Madoff. It’s easy to target the bank for compliance failures but … Read more »
The Books I Read in 2013
My goal this year was to finish reading a book every other week. (For the math or calendar challenged, that’s a goal of 26 books.) I’m happy to say that I smashed through that goal. I ended up with 44 books on my Read in 2013 shelf during the year. Compliance Books For those of … Read more »
Starting New Compliance Habits in 2014
One of my favorite books of 2012 was Charles Duhigg’s The Power of Habit. The book is full of interesting ideas and based on an impressive collection of research. But it does a great job of balancing intellectual seriousness with practical advice. Even better, it’s written in a lively style, making it easy to read … Read more »
SEC Sanctions CCO for Custody Rule Violations
The Securities and Exchange Commission issued an order against Mark M. Wayne, the president, Chief Executive Officer, and Chief Compliance Officer of Freedom One Investment Advisors, Inc. for violations of the the custody rule under the Investment Advisers Act. Although that’s the headline, the SEC action shows many other compliance failures. First, the custody issues. … Read more »
Happy Holidays – Merry Christmas – Happy New Year
On behalf of the entire staff of Compliance Building we wish you a very happy holiday season, a merry Christmas, and a compliant new year. Christopher Columbus Park by Igor Motov CC NC BY SA Read more »
The Proposed New Regulation A for Fundraising
Title IV of the Jumpstart Our Business Startup (JOBS) Act mandated changes to the moribund Regulation A offering process. That law raised the bar from $5 million to $50 million and prodded the SEC into making changes. The SEC issued the proposed rule with enough interesting treats that it may be worth exploring. The SEC … Read more »