Wolves of Wall Street, beware!
The Securities and Exchange Commission is taking steps to improve its oversight of thousands of registered investment advisors, or RIAs, which operate under the SEC's guidance.
The Commission announced last month that it will soon launch exams to test the compliance oversight and controls of firms that hire investment advisers with a disciplinary history.
The SEC stated in a "Risk Alert" report that such "individuals may present an increased risk of future misconduct, and thus can present harm to clients."
According to the SEC risk alert, the "exams will target advisory firms that have hired or contracted individuals with histories of disciplinary events in the financial services sector, including representatives who have been disciplined or barred from a broker-dealer." SEC staff is "identifying candidates using information reported on firms' Form ADV, which is used to disclose certain disciplinary events, as well as information from other
