BOSTON - Failure to supervise' is one of the issues investment companies should be most concerned with when facing investigations by the Securities and Exchange Commission, according to industry executives who spoke at the Mutual Fund Compliance Conference of the National Investment Company Service Association of Wellesley, Mass. The annual conference was held here late last month.

Complying with 'failure to supervise' policies, "requires companies to design systems to reasonably detect and deter violations of the law," said James Adelman, associate direct administrator of the Boston direct office of the SEC. It is especially important for companies to pay attention to their internal oversight because a company's failure to do so can get entire companies into trouble based on the actions of individuals with or without the knowledge of the company itself, according to Adelman.

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