Red Yellow Green Report

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The Red-Yellow-Green Report was released by Diligence Review Corp. on August 1, 2012.

Of the 11,622 SEC-registered investment advisors at July 2, 2012, we identified 1,315 advisors (11.31%) that answered “yes” to one or more questions that constitute a “significant adverse regulatory event” in Form ADV.   The names of those 1,315 firms are listed in alphabetical order in the Red List section of this report. We consider significant adverse regulatory events to be red flags in the investor due diligence process. A “red flag” is any high risk item that a prudent investor would seek to investigate and understand prior to investing.

Diligence Review Corp. uncovered one or more “yellow flags” in the ADV Review process for the firms listed in the Yellow List section of this report.  We define a “yellow flag” as a potential risk item that a prudent investor would seek to investigate and understand prior to investing.  Red flags are high risk items.  Yellow flags are other risk items.  Many yellow flags relate to a firm’s organizational structure, although some yellow flags relate to adverse regulatory events disclosed on the ADV that do not rise to the level of a red flag.

The Green List is a list of firms that have no significant adverse items identified in Form ADV. In other words, these are the firms that do not have red or yellow flags.

The report is a large document so it’s available in whole and in part.  The document is free and it contains complete information about our methodology.

The Full Report:

First Report Section: