ICA Management Objectives

by David Jenyns on September 3, 2008

1. Greater participation in management by security holders

One of the main goals was to create a degree of independence in management personnel by restricting investment bankers, brokers, commercial bankers, principal underwriters, etc., who may have a possible bias in the management of an investment firm, to a minority of the board of directors.

The act limits the extent to which persons affiliated with management may become directors. The Investment Firm Act enables the Securities and Exchange Commission to sue in the courts to prevent gross abuse of trust and gross misconduct and grossly unfair plans of reorganization of investment companies. It makes embezzlement of investment firm funds a federal offense, and prevents investment bankers and other affiliated persons from using their investment companies to assist them in underwriting activities.

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