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The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) issued an alert that market turbulence caused by the COVID-19 pandemic may heighten “the risks of misconduct in various areas that the staff believe merit additional attention.” So reports Think Advisor.

SEC Seal of the United States Securities and Exchange Commission“OCIE has identified a number of COVID-19-related issues, risks, and practices relevant to SEC-registered investment advisers and broker-dealers,” according to the alert.

The agency said the alert is designed to share some observations with investors, firms and the general public. Those observations fall into the following categories:

  • Protection of investors’ assets
  • Supervision of personnel
  • Practices relating to fees, expenses, and financial transactions
  • Investment fraud
  • Business continuity
  • The protection of investor and other sensitive information

One area of potential advisors misconduct noted in the alert relates to conflicts of interest. Some examples include borrowing money from clients, making recommendations resulting in higher costs for investors and higher compensation for the advisor, or recommending moving money via rollover or other method to investment products being solicited by the firm’s personnel.

OCIE also note the risks of working remotely and the importance of safeguarding sensitive information.

Read the full article from Think Advisor.

Last modified on Thursday, 13 August 2020
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