has fined SEI Investments Distribution Company
(SIDCO) and SEI Investments
$375,000 for failing to keep complete records, file unaudited financial statements, and maintain adequate net capital levels. The settlement
was reached last Wednesday.
Besides cutting a hefty check to the U.S. Treasury, SIDCO will have to employ Deloitte & Touche
to conduct a review of its internal controls. Deloitte will issue a report of its findings, which SIDCO will then have 30 days to implement.
The violations date back to August 2002, when during a routine examination the NASD discovered that SIDCO did not accurately calculate its net capital and also failed to keep accurate and complete financial records. Subsequent investigations by the SEC revealed that SIDCO had not corrected the problems.
Specifically, in 2002, SIDCO reported $8 million in net capital when it should have reported negative net capital of $53 million. The overdraft was a result of erroneous transactions ordered by SEI Investment Management
SEI Investments was included in the SEC action for not adequately monitoring SIDCO.
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