The Securities and Exchange Commission may ask certified financial planners to investigate any tips that come to the agency, according to a statement on page 92 of the new rule implementing the Whistleblower Program authorized by the Dodd Frank Act.
That doesn’t mean every firm will get the chance. The agency will take into account factors like the nature of the complaint, how high up in the company the wrongdoing may have occurred and the company’s compliance program. “It seems highly unlikely that a firm would be permitted to self-investigate a whistleblower tip indicating a massive fraud or the involvement of senior management in wrong doing,” says Jennifer Woods Burke, a securities and compliance attorney in Jersey City, N.J, who has represented financial planners and financial institutions in regulatory matters. However, “CFPs should begin to consider, at least in theory, how they will respond to a request from the SEC and whether they should undertake it alone or hire a professional to conduct the review on their behalf.”
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