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Professor Christine Sgarlata Chung says would-be investors must do their homework before trusting their money to a financial adviser.
Her crash course on vetting these individuals reached an audience across the United States thanks to the Associated Press article
“How to do a background check on financial advisers.” In the piece — which was published earlier this month by major media outlets including ABC News, the San Diego Union-Tribune and the Minneapolis Star Tribune — Prof. Chung said anyone in the market for a stock broker or an investment adviser should do their due diligence by screening names through both
adviserinfo.sec.gov for work history, licenses, and red flags such as a disciplinary action or customer complaint.
And once a meeting is set, seek answers about the process, fees, financial incentives, and any negative marks on their record.
"The best thing you can do to protect yourself is ask questions," Prof. Chung told the AP. "If you start hearing things that don't make sense, trust yourself and walk away."
Prof. Chung, who serves as co-director of the joint Albany Law School-UAlbany
Institute for Financial Market Regulation (IFMR), gave similar advice
to the Times Union in February: "It's not a bad thing to ask people who you trust for some recommendations. The challenge is that most people stop there, and that's what you cannot do. You have to look at their history."
Prof. Chung joined Albany Law's faculty in 2007 as director of the Securities Arbitration Clinic. She was previously a partner at Goodwin Procter LLP, where she was a member of the firm's securities and white collar crime practice groups. While at Goodwin, she specialized in complex business litigation and civil and criminal securities-related enforcement matters, including proceedings involving the Department of Justice, the United States Securities and Exchange Commission, the National Association of Securities Dealers (now known as FINRA) and various states’ attorneys general’s offices. She also specialized in compliance and risk management counseling for clients that included mutual funds, investment advisors, broker-dealers, bank holding companies, complex operating companies, officers, directors and employees.
Before joining Goodwin Procter, Prof. Chung served as Branch Chief of the Enforcement Division of the United States Securities and Exchange Commission, among other posts. As a member of the Enforcement Division, she specialized in investigating and litigating cases involving a wide range of alleged securities-related misconduct, including matters involving alleged financial reporting fraud, insider trading, and professional misconduct by accounting professionals.
Prof. Chung's research interests include regulatory architecture and regulatory reform, risk management (including systemic risk management), compliance, corporate governance and feminist jurisprudence, with a focus on the challenges facing financial institutions and their customers, investors and employees. She also is interested in exploring the historical underpinnings of the current system of financial market regulation.
She is a graduate of Amherst College (B.A., magna cum laude) and Harvard Law School (J.D., cum laude).