Who oversees RIA’s?
Bernie was a Registered Investment Adviser and the SEC was supposed to be auditing him. Ooops. Bernie got away with being the biggest shiester of all time – at least so far. To be fair, being a Registered Investment Adviser helped him get away with it for a long time but it really wasn’t the main reason he was able to perpetrate his evil fraud. How did Bernie do it? RIA’s usually manage money for people at a large custodian like TD Ameritrade, Fidelity or Schwab. This is important because it creates a “fire wall” between the adviser and your money. If an adviser tries to steal money from an account at Fidelity for example, you’ll see it because Fidelity sends you statements. The use of a custodian is an important safeguard for you. But Bernie didn’t do that. He formed limited partnerships and hedge funds. These entities have almost no scrutiny by outside authorities. It’s a black box – and it can be sort of like that old roach killer commercial. Your money checks in…..but never checks
