What do you need to know
- The consultants received loans for amounts well in excess of the payroll needs.
- Counselors who abused the program were also significantly more likely to reveal their history of past misconduct.
- More than 45% of loans from fintech lenders were considered doubtful.
New reports show that payroll protection loans secured by consultants and assisted by fintech firms have been implicated in misconduct.
More than 6% – or $ 36 million – of the $ 590 million in PPP funds received by the investment management industry has violated the CARES Act loan limits, according to a new study.
IN study, “Fraud and abuse in the payroll protection program? Testimonials from Investment Advisory Firms ”found that nearly a quarter of SEC-registered investment advisors eligible for PPP funds – 2,999 out of 12,643 – received loans totaling more than $ 590 million.
The study was first reported by InvestmentNews.
“While professional services such as investment advisory services were relatively isolated from fully closed operations during the pandemic due to the ability to work remotely, investment management firms realized significant negative shocks to earnings just prior to PPP deployments,” the authors state. … , William Beggs of the University of San Diego and Tuong Harvison of the University of Arizona, Eller College of Management, Department of Finance.