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Subject:  Another slightly OT: FINRA and RIAs Date:  5/30/2012  12:16 PM
Author:  Hawkwin Number:  70718 of 88498

“Dodd-Frank recognized the regulatory gap that currently exists—only 8% of RIAs were examined by the SEC last year,” Russo, also the CEO of Advantage Financial Group in Cedar Rapids, Iowa. “That’s an average of once every 13 years; and nearly 40% of RIAs have never been examined.”

Problems within the SEC also shored up Russo’s opinion, according to the letter. The agency has come under scrutiny for a string of episodes, including leaving a beneficiary of Bernie Madoff in charge of liquidation. The regulatory is also under funded, and likely will remain so.
Last year, the coalition released a study conducted by Boston Consulting Group estimating high costs if FINRA were to become the SRO: $200 million to $250 million in startup costs and $460 million to $510 million for ongoing operations. The coalition says these expenses could be passed on to advisors in annual fees to the tune of $51,700, or much more, per firm, depending on its size.


Wow, 40% have never been examined. No wonder so many of them can get away for fraud and other illegal activities for so long.
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