On August 1, 2013, the Securities and Exchange Commission (“SEC”) approved new disclosure requirements for broker-dealers who maintain custody of investor assets. These rules are part of the SEC’s response to the devastation caused by Bernard Madoff’s massive Ponzi scheme. The new SEC rules require brokerage firms who hold investor assets to file quarterly reports attesting to whether and how they maintain customer securities and cash. Further, brokerage firms are required to file annual compliance reports with the SEC verifying adherence with financial-responsibility rules, including, but not limited to, the net capital requirement rule. These annual and quarterly reports will be reviewed by independent public accountants. SEC Chairman, Mary Jo White, stated, “These rules will provide important additional safeguards for customer assets. . . These rules will strengthen the audit requirements for broker-dealers and enhance our oversight of the way they maintain custody.”
Lax & Neville LLP has nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Additionally, Lax & Neville has extensive experience in successfully prosecuting claims on behalf of customers who have suffered losses, including losses suffered as a result of Ponzi schemes. Please contact our team of attorneys for a consultation at (212) 696-1999.