In the wake of Bernie Madoff's monumental, $60 billion Ponzi scheme, regulators are proposing to increase accounting safeguards by requiring mandatory surprise audit inspections of every investment adviser with custody of client assets.

The Securities and Exchange Commission's proposed amendments to Rule 206(4)-2 would require all registered investment advisors with custody of client assets or securities to undergo an annual surprise examination by an independent public accountant. The public comment period on the proposals ends July 28.

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