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News September 25, 2006 Issue

On the Lighter Side: Cox and Schapiro Weigh in on Golf Issue!

A few weeks ago, IM Insight heard from a concerned CCO who was diligently trying to analyze whether a portfolio manager could appropriately accept a golf invitation from a broker while attending a soft dollared conference.

Good question, we thought. After all, as one wise industry sage once observed, "you can’t soft golf." And, as we all know, following a certain event involving a certain activity involving a Velcro® wall, there’s been a ton of scrutiny about gifts and entertainment in the investment management world.

So, in the September 4, 2006 issue of IM Insight, we fretted for paragraph after paragraph about whether and how a portfolio manager should accept such an invitation.

But maybe we should just lighten up.

In the past two weeks, the heads of both the SEC and the NASD have publicly indicated that business travel and golf go together like … business travel and golf.

Let’s roll the tape. Here’s SEC chairman Christopher Cox, in a September 14 speech:

"One of the most important reasons for a conference like this is to bridge the federal-state jurisdictional divide. … Tomorrow, of course, there’s golf — but before we get to that, there’s a full morning devoted to examination issues and the hottest topics in regulation… . [I]n the grand finale, [we will] explore ways that we can all work to build on our already solid relationships for better and more effective civil and criminal coordination."

"And then," he added, "there’s golf."

A few days later, NASD chairman Mary Schapiro referred to an outgoing NASD official who had served as the SRO’s state liaison since 2001 (and presumably did a lot of traveling in that position): "I understand [the official’s] golf game has improved substantially over these past five years and I’m going to assume that’s purely coincidental."

As will we.