SEC chair Mary Shapiro told the Securities Industry and Financial Markets Association’s (SIFMA) compliance and legal society conference that investigations will become more comprehensive. The SEC is updating its website which will offer more information to investors and make the review process simpler for firms.
A combined qualitative and quantitative approach will alert the agency to firms that are most suspect. New data gathering capabilities will fuel the combined approach and are already producing results. Four hedge funds suspected of inflating returns and misleading investors were identified since the new systems were put into place in December. The agency
has been criticized for its antiquated systems and its failure to detect fraudsters, particularly Bernard Madoff. The Madoff incident along with the 2008 credit crisis has spurred a flurry of new regulatory proposals as well as the updating of technology systems at the SEC.
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