Monday, June 21, 2010

Saving a Buck on Your Compliance Program Might Cost You in the Long Run

If you are an independent investment adviser or small broker dealer that has realized it has a need for compliance assistance, you should choose your compliance counsel carefully. First, if your compliance adviser is not an attorney, your communications with that adviser is unlikely to be protected by the attorney-client privilege in the event of a regulatory inquiry or an enforcement proceeding. If you do choose an attorney in which to place your trust, you should make sure that they have previously been through several SEC, State and FINRA audits, and that he or she is adequately insured. Getting a clear picture of your compliance status is critical, but it might backfire if it can be stolen from you through an investigatory subpoena or civil investigatory demand. Compliance is a far ranging task, and you should apply several sets of eyes to getting it done right. Our firm has helped independent investment advisers with ADV updates and a variety of other regulatory issues. It can be an unnerving task, as there are so many issues and levels that need to be addressed with analytical precision and a depth of knowledge seldom possessed by a single individual. Beyond representing aggrieved investors and brokers in industry disputes, our firm has represented a variety of industry participants that would have been well-served by a preventative compliance program. It will be far more expensive to cure a lapse in compliance than it will to hire a compliance firm or law firm with substantial regulatory as well as industry compliance experience. Members and associates of our firm have been on both sides of regulatory audits and inquiries, and we are ready to help you avoid accidentally triggering a costly customer complaint or regulatory inquiry, investigation or Order.

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