Compliance October 26, 2010

SEC Working to Improve Complaint Handling

The Securities and Exchange Commission is working to have new technology to handle tips and complaints in place by the end of the year.
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The Wall Street Journal reports that Robert Khuzami, director of enforcement, said the system will be installed in two phases. The first will improve the agency’s ability to track and search the information it receives, and the second will improve its ability to analyze the data.  The SEC is aiming to have it completed some time in 2011.

The system being installed uses a tool that prompts a person making a complaint online to answer certain questions depending on the allegation, according to the news report. Staff who receive telephone complaints will use a similar program that will prompt them to ask callers the same questions. SEC employees will key in handwritten complaints using the same format. This will standardize the information available to all SEC staff. 

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The technology also will help the SEC to prioritize information, so officials know what to act on first. Knowing that a particular law firm is suspect, for example, can help the SEC prioritize the next complaint in which that same law firm is involved, Khuzami told the WSJ.  

The news report noted that a better system for sharing tips could have helped the SEC uncover Bernard Madoff’s multibillion-dollar Ponzi scheme. Two SEC offices, in at least one instance, separately looked into Madoff’s operation and were unaware of the other’s efforts. They began their investigations after receiving complaints from different sources. The SEC also received, and discounted, numerous tips and documents about Madoff from Harry Markopolos, an independent fraud investigator, for nearly 10 years.
Products October 26, 2010

Principal Offers Retirement Litmus Test and White Paper

The Principal Financial Group created the “Savings-to-Employment Income Ratio” to help investors estimate the health of their retirement savings; a white paper was written to complement the tool.   
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The Savings-to-Employment Income Ratio is a litmus test for estimating the health of an investor’s retirement savings and requires only a few pieces of information to calculate. 

The paper, “When the Destination is Retirement: A Way to Keep Investors’ Plans on Track,” written by Noelle Fox, senior investment and product analyst at The Principal, is intended to help financial professionals use the litmus test to its fullest capacity. It analyzes the parts of the Savings-to-Employment Income Ratio and offers suggestions as to what investors can do to change the factors in their control, such as:

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  • The savings rate
  • The age at retirement
  • The income replacement ratio

“This paper provides resources for financial professionals to help investors evaluate how well they are doing in saving for retirement and possible ways to revise their strategy so they have more confidence about their financial futures,” said Drew Denning, vice president of the retiree services division at The Principal.

The white paper can be read here.

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