Robert Khuzami, director of the SEC’s Division of Enforcement, said today that the agency has begun reviewing registration documents to find advisers who have not accurately portrayed their education, assets under management and other aspects of their firm.
“If they come face to face with inspectors early on … they’re going to know that we’re watching, and they’re going to be unlikely to graduate to larger frauds,” Mr. Khuzami told a hearing of the Senate Banking Subcommittee on Securities, Insurance and Investment.
The scope of the SEC crackdown on advisers who file misleading forms is unclear.