7c. ALL LAB - Follow the Money: Financial Forensics (Intermediate)
The SEC continues to focus on revenue sharing, fee disclosure and expense sharing arrangements that may present material disclosure errors and conflicts of interest. In this lab, attendees will work through complex financial analytics and case studies utilizing forensic analysis and testing to identify potential violations. This lab will be especially helpful to compliance personnel of investment advisers and broker-dealers with a multitude of financial arrangements, products, and clients. Participants will gain a better understanding of what to look for in contracts and financial statements and tools to enhance their surveillance and testing programs.
Learning Objectives:
Analyze all firm revenue sources, expense sharing arrangements, discounts and credits that may require disclosures.
Compare various fee schedules (fixed fee, performance fee, client specific calculations, most favored nation clauses, etc.) to identify those that deviate from industry standards.
Analyze and compare third party payments for undisclosed compensation arrangements.
Review bank records, vendor invoices, clearing and custodial statements to identify undisclosed credits, discounts, or revenue shares.