SEC Pushes Stricter Audit Rules For Carrying Firms

Law360, Washington (June 15, 2011, 12:57 PM EDT) -- The U.S. Securities and Exchange Commission on Wednesday voted unanimously to amend the Securities Exchange Act of 1934 to up the audit and reporting requirements for broker-dealers holding customers' assets.

The amendments, which are not directly related to the federal financial regulatory overhaul, grew out of Bernard Madoff's Ponzi scheme and other frauds, according to SEC Chairwoman Mary Schapiro. They would mandate audits of the controls broker-dealers have in place and strengthen oversight of broker-dealers' custody practices.

“We must take strong steps” to ensure the safety...
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