8.11.2009 The SEC has posted a special notice on post-Madoff reforms. The SEC noted that in the wake of the Madoff fraud, the SEC’s Office of the Inspector General launched an internal investigation to determine why the agency did not detect the scheme. That office has not released the results of the investigation, which is expected to be completed shortly. In the interim, the SEC has taken a number of steps in an attempt to reduce the chances that such frauds will occur or be undetected in the future.
The notice reviews these steps, which include:
- Two rule proposals designed to safeguard client assets;
- Revitalizing the Enforcement Division;
- Revamping the handling of complaints and tips;
- Advocating for a whistleblower program;
- Conducting risk-based examinations of financial firms;
- Increasing focus on agency-wide risk assessment;
- Improving fraud detection techniques for examiners;
- Recruiting staff with specialized experience;
- Expanding and targeting training; and
- Seeking more resources.
Click http://www.sec.gov/spotlight/secpostmadoffreforms.htm to access the notice.