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Joanna Fields
Traders Magazine Online News

Navigating Cybersecurity on a Stretch of "Regulatory Rapids"

In this shared commentary, Aplomb Strategies writes that when considering a firm’s governance structure, a holistic approach makes the most sense.

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July 31, 2004

The Regulators Come Knocking

By Gregory Bresiger

The Securities and Exchange Commission has embarked on a "mini-sweep" of several broker dealers and is looking at each firms' soft-dollar practices. The NASD is collaborating on this campaign.

SEC official Larry Bergmann says the agency is scrutinizing how firms track soft-dollar purchases, so that the products and services changing hands are legally sanctioned. Bergmann says the agency's main concern is compliance with the soft-dollar safe harbor, Section 28(e) of the Securities Exchange Act.

The regulator has sent letters to "dozens" of firms requesting documentation and has included some 30 questions, according to Lee Pickard, a partner with the law firm Pickard and Djinis. Pickard, who says he's aware of the sweep, is a former director in the SEC's division of market regulation. He is now in private practice, representing clients who use soft dollars. The information gathered in the sweep will be used by an SEC task force investigating the buyside's use of commissions for research and other services.