CFP BOARD DELAYS NEW STANDARDS
The Certified Financial Planner Board of Standards has established a Jan. 1, 2009, enforcement date for its revised Standards of Professional Conduct, allowing members more leeway before enforcement takes effect.
The board's decision provides CFPs with a six-month grace period. The board recently determined that it would be in the best interest of CFPs and their clients to provide the grace period to ensure that CFPs are in compliance with the standards before the board begins to enforce them in the New Year.
CFPs found in violation of the ethical standards may be subject to public discipline, up to a permanent revocation of the right to use the CFP marks. The revised standards include heightened disclosure requirements and obligations for CFPs to place the interests of their clients ahead of their own at all times.
FPA OPPOSES NEW BROKER SUPERVISION RULE
The Financial Planning Association has come out in strong opposition to a rule by the Financial Industry Regulatory Authority, saying that it would blur the line of regulatory oversight between investment advisors and broker/dealers. According to the FPA, the proposed rule would require brokerage firms to supervise the business activities of non-brokers, such as financial planners. The association contended that the measure would only add confusion to the already murky distinction between broker/dealers and investment advisors.
INVESTORS WIN SUIT AGAINST ANDERSEN AND GOP OFFICIAL
A jury awarded investors approximately $58 million in a lawsuit against a former Oregon Republican Party chairman who was accused of defrauding three venture capital funds he founded, and the funds' now-defunct accounting firm, Arthur Andersen. Craig Berkman admitted during the trial to withdrawing $5.2 million from the three funds, but claimed that they were either stock purchases or loans. He lost approximately $60 million of the $75 million in funds after the dot-com bubble burst.
The Multnomah County Circuit Court jury awarded investors $13 million and an additional $15 million in punitive damages from Berkman for negligence, breach of fiduciary loyalty and breach of contract, along with between $23 million and $30 million from Andersen for fraud, negligence and negligent misrepresentation.
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