The panelists debated scenarios ranging from a disgruntled employee who wants to contact the SEC directly to learning of a conflict of interest that wasn't properly disclosed while the SEC was examining another issue.

In one case, they discussed a hypothetical advisor who, while preparing for an SEC inspection, detected a $400 trading error that was previously missed and then fixed. Elizabeth Krentzman, chief advisor to the investment-management regulatory consulting practice of Deloitte & Touche LLP in Washington, said she wouldn't report the error, especially if the SEC didn't ask about it. The amount, she said, is inconsequential in the context of an account worth billions of dollars. "This stuff happens," she said.

The SEC's Gohlke suggested that reporting such a small error may not be necessary if the inspection wasn't already under way. But he and Marshall, the lawyer, agreed that the SEC may find the error anyway.

Marshall said self-reporting, for many advisors, depends on whether they believe they'll get credit. "The SEC says they reward people, but the question is, 'Do they really?'" he told Dow Jones Newswires.

Many advisors remain concerned that self-reporting will hurt them, instead of helping, he said.


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