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SEC Compliance stresses importance of transparency

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SEC Compliance Consultants, a provider of compliance and operational due diligence reviews, has stressed the need for asset managers and investors to be on the same page regarding the n

SEC Compliance Consultants, a provider of compliance and operational due diligence reviews, has stressed the need for asset managers and investors to be on the same page regarding the need for transparency and verifiable due diligence of manager operations.

The firm’s president Janaya Moscony says: ‘Too often, investors, and sometimes very sophisticated investors, simply ride the coat tails of other investors or even the regulators. In the years prior to the Madoff scandal, many believed that if a firm was examined by the SEC and received few findings, that firm must be suitable to invest in from a ‘compliance’ stand point. This complacency will no longer fly and most often will result in significant court cases when burnt investors look for retribution from those who have a fiduciary duty to act with prudence when managing or allocating client assets.

‘Investors must be willing to walk away from a potential investment if the operational risk is deemed too great,’ adds Steve Candela, senior compliance consultant. ‘During my 33 years working in this industry as a regulator and consultant, I have found and helped prosecute so many fraud cases. Investors need to know that the risk they are incurring is limited to investment risk. The reviews we conduct help minimize avoidable operational risk.’

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