Monitoring your intermediaries can be an expensive endeavor. Jim Nortz explores how to keep an eye on your intermediaries without breaking the bank.
Read Part 5 here.
Years ago, a friend of mine recounted for me his first law school class. He and his fellow classmates had assembled and were seated in the lecture hall. There was a buzz of anticipation as they awaited the professor’s arrival. Posted in the front of the room above the chalkboard was a very conspicuous “No Smoking” sign.
The students were puzzled when a pudgy, gray-bearded law professor strode into the classroom puffing away on a very large cigar. He stood for several minutes eyeing the first-year students as the room became foggy with smoke. After some time had passed, he asked in a craggy old voice, “What is the law?”
After a minute of befuddled silence, he pointed to the no smoking sign with his cigar and said, “Is that the law? Is a law really a law when it is not enforced?”
This same question can be asked regarding your intermediary contracts. No matter how well-crafted, the words on the paper mean nothing unless you put in place a meaningful monitoring and auditing program to verify intermediary compliance. Not surprisingly, the DOJ and SEC share these sentiments. The second edition of the DOJ’s and SEC’s “Resource Guide…
