SEC States One-Third of Reviewed Investment Firms Mishandling Client Assets

Mar 9, 2013

On March 4, 2013, the Securities and Exchange Commission (SEC) cautioned investors that they found significant deficiencies in how investment advisers handle client assets. Specifically, that advisers had failed to maintain control of clients’ assets or comingled client, proprietary and employee assets in a single account.

The SEC identified problems in the handling of client assets in one-third of the 140 firms it reviewed. Preventing Ponzi schemes, like that of Bernard Madoff, has become a top priority of the SEC. “Because the safeguarding of assets is central to investor protection, it is critical that investment advisers follow our rules when they maintain custody of their clients’ funds” said SEC chairman Elissee Walter.

For more information on the SEC’s examination please visit: Investment News


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