Investment adviser: Failure of duty to supervise

Abstract

Under the new Compliance Program Rules, each U.S. registered investment adviser and U.S. registered investment company was required to designate a Chief Compliance Officer (“CCO)” by October 5, 2004. The CCO title is expected to carry supervisory responsibility for many of the newly appointed officers, which may lead to personal liability if they are charged with a failure of the duty to supervise. As a result, there is renewed interest in the standard of care applicable to supervisory personnel of investment advisers and the manner in which they may be insulated from regulatory liability for claims of failure to supervise persons under their control who violate certain federal securities laws (“Federal Securities Laws)”.

Citation

Knoblock, E.M. (2004), "Investment adviser: Failure of duty to supervise", Journal of Investment Compliance, Vol. 5 No. 3, pp. 35-41. https://doi.org/10.1108/15285810410636497