Validity Of The 'Reliance On Consultant' Defense
Rebekah R. Runyon In a recent enforcement proceeding against an investment adviser (IA), the U.S. Securities and Exchange Commission rejected “reliance on compliance consultants” as a defense to violating the law. Although the SEC’s rejection of the IA’s argument may appear to call into question the value of hiring consultants, if the proper steps are taken, IAs (as well as broker-dealers, or BDs) may still be able to retain consultants and defend themselves based on the advice they receive.
Last year, the...
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