Milken Global Conference
Beverly Hills, CA
Despite the Madoff morass, a partisan vote on bringing charges against Goldman Sachs, and their actions being called "childish" yesterday morning by Ken Griffin of Citadel, the SEC is making large, fundamental changes in public advocacy.
"We are changing dramatically since last year and we're still looking for more resources to continue growing," said Richard C. Ferlauto, the SEC's Deputy Director, Policy Office of Investor Education and Advocacy. "With respect to rules enforcement, we're hiring an additional 500 people this year," which he said is a challenge given the Commission's goal of being self-funded. "We need a sustaining financial budget."
A graduate of Georgetown University, Ferlauto has over 25 years of experience pouring over complicated documents, especially where fiduciary standards must remain high. "We need to protect the public and the most vulnerable groups, such as retirees." The SEC is working with the AARP on educational outreach programs for their members.
The SEC Can Read The Writing On Their Wall
Not only is Ferlauto ensuring that there is massive undertaking behind the scenes at the investor hotline, the SEC is embracing social media as part of its outreach, with plans for Twitter and Facebook accounts: you'll be able to write on their wall. "Our technology is antiquated, but we're not letting that hold us back from becoming more focused," stressing the importance of having a proper budget in place.
Once the SEC receives a complaint or an "investor tip," they immediately bring forth all their resources and create a file on the advisor or broker. "We then scour their marketing material and disclosure information and take it from there. The social media will add a new dimension to our work."
The SEC is also looking at how "normal" their own documents are. "We need to make sure that all of our material is written in plain English. We cannot have advisory documents that are so jargon-filled that potential victims are discouraged from reading them because they are too "inside baseball."
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