June 30, 2009
This would be very expensive for small firms. The auditors overcharge for their time at small BD's so they would likley take advantage of small RIA's is this way as well. The SEC should easily be able to find fraud during the typical audit. And, if the current audit practices do not allow for this, then they should be changed. Switch a bit of the money laundering time to reviewing statements and the problem is solved.
Small RIA's did not cause the problems in our economy, large banks did. Let's spend some money overseeing these banks. And, a typical SEC audit should have uncovered the problems at Madoff's firm. An extra audit will not make things better, it will simply cost more and that cost will be passed along to clients.
Are we looking for a reality where only large banks and brokerage firms can afford to do business? It seems to me that has not worked for us, either the tax payer or the consumer. Madoff should have been caught in any routine SEC audit and would have been if his audits were anything like the audits my firm has enjoyed. Extra audits are not the answer. Better audits will work just fine.
Diastole Wealth Management
58 Boston Street
Guilford, CT 06437