The National Society of Compliance Professionals Inc. (NSCP) announces the publication of a timely new White Paper entitled "When the Baby Boom Era Becomes the Retirement Explosion: A Securities Compliance Professional’s Guide to Protecting Her Firm and Senior Customers." Alston & Bird attorneys Tod Sawicki, Scott Sherman and Alex Reed, joined by Richard Szuch, authored the White Paper (available at http://nscp.org/media/whitepapers/nscp-seniors.pdf).
Christopher Cox, Chairman of the U.S. Securities and Exchange Commission, has noted the growing concerns in the area of senior-targeted investment fraud and has partnered with organizations such as the AARP, the Financial Industry Regulatory Authority (FINRA), and the North American Securities Administrators Association (NASAA) on seniors related initiatives. At the 2006 and 2007 Seniors Summits, Cox explained, many "hundreds of sophisticated social influence tactics" and confidence schemes were revealed, all of which have been employed by perpetrators of fraud — necessitating aggressive protections of those 65 and older, "nearly a third of [whom] say they do not have enough money even to meet their basic living expenses."
The White Paper discusses the most significant and prevalent seniors issues that now (or soon will) face compliance professionals in broker-dealer and investment advisory firms, outlining the legal duties and regulatory obligations registered representatives and investment advisers owe to investing seniors and covering the significant issues that currently are the focus of the regulators’ attention and that should be the focus of compliance professionals’ efforts.
Finally, the White Paper will provide practical guidance and identify suggested "best practices" for policies and procedures that compliance professionals should consider adopting and implementing in order to help protect their firms and senior investors from illicit schemes and inappropriate and unlawful sales practices.
Significantly, the White Paper includes analysis of the latest major regulatory developments which have occurred within the last two weeks:
• The September 5, 2007 Hearing Before the U.S. Senate Special Committee on Aging.
• FINRA’s Notice to Members 07-43, "Senior Investors," issued on September 10, 2007.
• The SEC’s Order granting accelerated approval of the NASD’s Amended Proposed Rule 2821 on Variable Annuity Sales Practices.
• The Joint Report of SEC, FINRA and NASAA on their examination of "Free Lunch" Sales Seminars, issued during the 2007 Seniors Summit on September 10, 2007.
Key points of the White Paper’s coverage include:
• The provision of an outline of governing legal and regulatory principles;
• A thorough discussion of the major issues of regulatory concern and the various proposals, rules and reports they have recently issued to address those issues;
• The development of a comprehensive set of practical guidance and suggested best practices for improving a firm’s supervisory and compliance policies and procedures.
NSCP Executive Director Joan Hinchman stated, "This NSCP White Paper represents another huge step for NSCP in its continuing efforts to serve further the Compliance Profession and the Securities Industry. The ideas and solutions in the paper address the gamut of regulators’ concerns, firms’ risk analyses and the investing public’s worries.
With the ‘Retirement Explosion,’ it is NSCP’s hope that the Senior Investors White Paper will aid the industry in its fight to avoid questionable tactics and in the development and implementation of effective strategies to protect against unsuitable investments."
White Paper contributor Theodore J. Sawicki, a Partner in the Securities Litigation Group of Alston & Bird LLP, commented that in light of the substantial attention regulators have begun to pay to issues focused on senior investors, "we thought it might be helpful to the NSCP constituency to develop a comprehensive discussion of the major issues coupled with a guide to assist them in proactively addressing those issues and amending and improving their firms’ policies and procedures before problems develop."
About The National Society of Compliance Professionals
The National Society of Compliance Professionals (http://www.nscp.org) is a nonprofit, membership organization dedicated to serving and supporting compliance professionals in the securities industry. NSCP offers practical and interpretive guidance on compliance-related matters; alerts its members to important regulatory developments; sponsors educational meetings that serve as forums for exchanging ideas and information; provides professional analyses and counsel in regard to securities laws and regulations authorized by the states, federal agencies and the self-regulatory organizations (e.g. FINRA); and promotes professionalism among compliance officials within the securities industry.