The Importance of Performing Due Diligence

Aug. 2012


The painful lessons that the financial industry has learned from the Madoff and Stanford Ponzi scheme scandals are numerous, but maybe none as important as the necessity of performing ongoing due diligence. Importantly, the responsibility to perform due diligence rests with many, including banks, trust companies, broker-dealers, investment advisers, and investors. However, since 2008 the Securities and Exchange Commission (“SEC”) has brought over forty five (45) enforcement actions against individuals and firms for running Ponzi schemes, many of which were private funds and their managers,1 so it has become a very high priority with regulators that investment advisers have a strong due diligence program in place covering their recommended investments and the service providers they use.


To read the full PDF article, click here.

Leave a Reply

Your email address will not be published. Required fields are marked *