Safecore, Inc., a technology-enhanced service provider delivering a full suite of compliance, dynamic e-mail and IM archiving and business continuance managed solutions, announced today that Boston, MA-based Eze Castle Integration, Inc., a leading supplier of IT services to the hedge fund industry, will resell SafecoreMA—Safecore’s end-to-end managed technology solution that ensures hedge funds comply with all new SEC regulations governing the retention of corporate e-mail and instant messages.
The newly adopted SEC rule requires hedge fund advisers to retain auditable communications records, including e-mail and instant messages, and assign a compliance officer to oversee and employ procedures and policies to ensure compliance. “The new law has left many hedge fund providers scrambling to implement a comprehensive solution that completely meets these requirements,” said Ed Gregory, CEO of Safecore, Inc.
Safecore’s distribution strategy is to partner with highly regarded solution providers and consultative advisors that have proven track records and large customer bases that we can leverage. “Eze Castle is a great example of our distribution strategy at work given its 300+ satisfied customers and this new imperative from the SEC.” added Gregory. “This relationship enables Safecore to better serve the hedge fund industry by offering an e-mail & IM archiving solution that is cost-effective, easy-to-use, and that enables these fast-paced businesses to comply with SEC regulations without interrupting day-to-day operations,” said Gregory.
SafecoreMA’s integrated system allows authorized users to thoroughly search and review both e-mail and IM histories from a convenient, single interface; quarantine non-compliant e-mails, preventing delivery until reviewed or post-reviewed; store transcripts of all IM communications for compliance officer reviews; act as a secure, long-term communications repository, with advanced cross-archive searching and retrieval capabilities; and dramatically reduce the ongoing cost of e-mail and instant message storage.
Eze Castle Integration, Inc. will resell SafecoreMA as a valuable complement to its range of services that includes start-up installation, Internet connectivity, IT administration and troubleshooting, antivirus protection, and preventative maintenance.
“As a systems integrator, our job is always to deliver a total solution to our customers that leverages leading-edge technologies to fundamentally solve their problem. As technology improves, we adopt the better technology,” said Chris Grandi, executive vice president of business development for Eze Castle Integration, Inc.
“Rather than buy numerous licenses and expensive hardware devices from a myriad of different technology providers, hedge fund advisors, compliance officers, and CIOs now have an affordable, end-to-end solution that makes it easy to ensure compliance and to navigate and utilize huge amounts of mandatory archived information,” added Gregory.
The new SEC rule and rule amendments fall under the Investment Advisers Act of 1940, (primarily a disclosure and antifraud law), and “requires advisers to certain private investment pools (‘hedge funds’) to register with the Commission under the Advisers Act. The rule and rule amendments are designed to provide the protections afforded by the Advisers Act to investors in hedge funds, and to enhance the Commission's ability to protect our nation's securities markets.”
Prior to the October 2004 ruling, hedge funds had been exempt from SEC reporting requirements, as well as from regulatory restrictions regarding leverage or trading strategies. Originally designed for institutions to reduce their exposure to financial markets, hedge funds have evolved to include private, unregulated investment funds for wealthy individuals specializing in high risk transactions that include short selling, leveraging, program trading, swaps, arbitrage, and derivatives. These funds employ aggressive strategies (unavailable to mutual funds) and are restricted by law to less than 100 investors with the minimum hedge fund investment typically beginning at $1 million.
Failure to register and comply can result in serious penalties as evidenced by recent hefty fines imposed on numerous Wall Street brokerage firms. In December 2002, the commission fined Goldman Sachs, Salomon Smith Barney, U.S. Bancorp Piper Jaffray, and two other institutions more than $8 million for failing to retain e-mails for the correct SEC-mandated retention period. In March 2003, Bank of America Corp. was fined $10 million—the largest fine ever imposed by the SEC—for failure to produce e-mails and documents concerning trading practices.
About Safecore, Inc.
Safecore, Inc. is an emerging leader in the compliance and business continuance managed solutions market delivering enterprise-class hosted solutions to mid-sized firms in highly regulated industries throughout the U.S. Safecore’s growing suite of hosted solutions enables businesses to meet current regulations that mandate the long-term retention, retrieval, and integrity of critical business information—especially crucial to highly regulated industries such as securities brokerage, banking, and healthcare. The company’s end-to-end hosted solutions are delivered in an integrated package at a convenient monthly price, without the need for significant upfront capital investment and overhead. Working with Safecore, customers can concentrate on managing their own businesses, confident that all critical applications, electronic data, and intellectual property are permanently safeguarded and securely accessible. Safecore resolves to provide its customers the most flexible, robust, and affordable enterprise-sized solutions in the industry. www.safecore.com