|
Finra enforcement sweep targets RIA referrals
By Dan Jamieson
|
|
(January 26, 2009 - Monday) - The enforcement division of the Financial Industry Regulatory Authority Inc. is looking into how brokerage firms refer investors to money managers.
A Jan. 15 letter from the enforcement department, sent to an unknown number of firms, also asks specific questions about referrals made to Bernard L. Madoff Investment Securities LLC of New York or any investment service offered by the Madoff firm.
The enforcement sweep follows news last week that Finra's regulatory unit sent a general inquiry to some of its member firms asking about their advisory businesses, their affiliations with advisory firms and whether they operated a hedge fund within the broker-dealer.
While inquiries from New York and Washington-based Finra are often routine matters, enforcement sweeps are potentially more serious.
The Jan. 15 letter asks for the names of all the advisory firms to which the firm referred clients from 2006 through 2008, all marketing materials used, details of the due diligence done on the advisers and the monitoring services performed for advisory clients, as well as a schedule of fees paid for referral services.
Firms have until Feb. 6 to respond to the sweep request.
Finra spokesman Herb Perone declined to comment.
|
