The independent directors will have the authority to hire employees and others to help the independent directors fulfill their fiduciary duties.
Please click http://www.sec.gov/rules/proposed/ic-26323.htm#P60_18024 for a copy of the release announcing the proposed rule.
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STATE SECURITIES REGULATORS RELEASE LIST OF TOP TEN SCAMS
1.14.2004 The North American Securities Administrators Association’s (NASAA) issued its annual survey of state securities enforcement officials, identifying the Top 10 schemes investors are likely to see in 2004.
The top ten schemes, based on the order of prevalence and seriousness, are
- Ponzi Schemes
- Senior Investment Fraud
- Promissory Notes
- Unscrupulous Broker/Dealer Representatives
- Affinity Fraud
- Insurance Agent Securities Fraud
- Prime Bank/High-Yield Investment Schemes
- Internet Fraud
- Mutual Fund Business Practices
- Variable Annuities
Please click http://www.nasaa.org/nasaa/abtnasaa/display_top_story.asp?stid=438 for a copy of the release, which describes the top ten schemes in more detail.
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NASD BRINGS ACTION AGAINST COMPANY FOR FAILING TO SEPARATE HEDGE FUND OPERATIONS FROM OTHER COMPANY OPERATIONS
1.9.2004 The NASD fined Worldco LLC of New York, NY, and four of its owners $1.5 million for failing to separate Worldco's business operations from the business and operations of PTJP Partners, a hedge fund. John G. Miller, Worldco's CEO, was barred from serving as a principal of a securities firm for three years.
The NASD found that 13 of Worldco's traders and 27 individuals not employed by Worldco regularly traded in Worldco's proprietary accounts even though they were not registered, as required by NASD rules. Additionally, at least 35 Worldco traders traded in the PTJP account even though they did not obtain prior written authorization to exercise discretion in a customer account as required by NASD rules.
The NASD also found that Worldco maintained inaccurate books and records and submitted inaccurate financial reports to the SEC and NASD. In particular, as a result of the failure to adequately separate its business from PTJP, Worldco's books, records and reports did not accurately reflect its individual expenses and revenues.
Please click http://www.nasdr.com/news/pr2004/release_04_002.html for a copy of the release announcing the action.
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SEC CHAIRMAN SPEAKS ABOUT MUTUAL FUND INDEPENDENT DIRECTORS
1.7.2004 SEC Chairman Donaldson spoke at the Mutual Fund Directors Forum about the need for mutual fund directors to be more diligent. He noted that the independent directors are the investors' first line of defense in ensuring that their interests are being served, that conflicts of interest are appropriately managed and disclosed, and that investors' money is being managed responsibly.
He further noted that recent events demonstrate that fund directors must be proactive and continually challenge and question fund management in other high-risk areas, such as portfolio management, pricing, sales of fund shares (including the use of fund assets to facilitate distribution), and the overall program of compliance and internal controls.
Please click http://www.sec.gov/news/speech/spch010704whd.htm for a copy of the Chairman's speech.
Please click http://www.sec.gov/news/speech/spch010804pfr.htm for a copy of the Division of Investment Management Director Paul ROye's speech.
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