April 17, 2009
Deputy Secretary, Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
I'm writing in the hopes that you will vote against the SEC proposed changes to the u-4 and u-5 reporting requirements. First, I do believe that the SEC and FINRA should tighten regulations so that the Bernard Madoff's of the world are reprimanded before the carpet under people's lives for which they are servicing are pulled right out from underneath their feet. It is fact that if a Financial Advisor has to report that they are witness to any crime or lawsuit issues, it will undoubtedly place a negative image on his/her reputation that has taken possibly years to build, even when they were not directly involved in any unscrupulous activities! If these marks were on a u-4 and u-5, when a prospective client is interviewing that particular Financial Advisor and asked if they have ever been involved with any crime or lawsuit, that individual must answer yes and first impressions would be damaged. Moving forward a relationship could be hindered based on the fact that a person was involved with a crime or lawsuit indirectly.
Secondly, if a Financial Advisor knows that these requirements are in place, it may hinder someone coming forward in a crime or lawsuit when maybe they would before. Someone may not want to come forward because they simply do not want to be involved with a case. I can say myself that if there was some type of crime or lawsuit that I could be a beneficial witness to, I definitely would testify. However, not everyone is like me and I can foresee other Financial Advisors simply not wanting to be involved because they care only for themselves and would not want to have these marks reported on their u-4 and u-5.
I do understand that the SEC is trying to tighten regulation within our Industry. I agree that these measures need to be taken. However, I believe that this proposed change is weighted more as a con rather than pro. My opinion is that this proposed change will not be a beneficial regulatory procedure. I foresee that this proposal will create more uneasy relationships for those indirectly involved with crime and lawsuits and in addition, less persecution for those acting unscrupulously. Ultimately, the exact opposite of what the SEC hopes to achieve from this proposal.
Colin S. Casey