On March 12, Lori Richards, the Director of the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations, addressed the IA Compliance Best Practices Summit 2009 and urged firms to review their compliance procedures and oversight to strengthen the “Culture of Compliance.” She emphasized that compliance programs must be reviewed and refined continually to meet the changing environment, risks and business of an investment advisory firm. In particular she highlighted the following areas for review in the current environment: (i) disclosure, (ii) custody, (iii) performance claims, and (iv) resources supporting the compliance program. Ms. Richards particularly highlighted the need to review conflict of interest disclosures involving compensation arrangements with solicitors, finders, or other service providers, fees paid by clients to the firm or affiliates and the services provided for such fees, and the use of client commissions to pay for products and services (soft dollars), and the need to make accurate disclosures and claims of past performance. As to custody, she suggested that compliance personnel of hedge fund managers should review the independence of the fund’s auditor and timely distribution of audited financials. She also advocated investments in technology to aid in front-end compliance and monitoring.