SEC Proposes Money-Manager Rules After Madoff Fraud
- Bloomberg
The U.S. Securities and Exchange Commission moved to impose new rules on money managers to safeguard client holdings after Bernard Madoff’s Ponzi scheme cost investors $65 billion.
SEC commissioners voted 5-0 today on a proposal to subject about 9,600 investment advisers to annual surprise inspections by independent auditors. About 370 money managers with direct custody of client holdings would also face yearly compliance exams to ensure they have adequate procedures to protect assets.
“We are taking this action in response to major investment scams such as Madoff,” SEC Chairman Mary Schapiro said at a public meeting in Washington. “Our proposals would greatly enhance the independent checks on client assets.”…
Carlyle to Pay $20 Million to Resolve Cuomo Probe
- Bloomberg
Carlyle Group agreed to end “play for pay” tactics in its investment business and pay $20 million to resolve a pension fund probe by New York Attorney General Andrew Cuomo.
Under the agreement, Carlyle will adopt Cuomo’s code of conduct, which bans investment firms from using placement agents or other third parties to negotiate with public pension funds to obtain investments. To avoid pay-for-play schemes, investment firms will be prohibited under the code from doing business with a public pension fund for two years after the firm makes a campaign contribution to a public official who can influence the fund’s investment decisions….
Morgan Stanley fined over trader’s mispricing
- Financial Times
Morgan Stanley has been fined £1.4m ($2.1m) by the UK’s financial regulator after weak control of its credit derivatives desk allowed a rogue trader significantly to overprice his position for six months.
The Financial Services Authority on Wednesday penalised the bank for its failure to prevent the mispricing by Matthew Piper, then a trader in complex credit derivative products.
The problem came to light in May last year and Mr Piper was fired in September following an internal investigation. On Wednesday the regulator said it had banned him from the industry and fined him £105,000…..
Tags: Andrew Cuomo, Carlyle, Derivatives, Hedge funds, Morgan Stanley, Rogue Traders, SEC
