# kaal:claim:2337268-033

**Claim.** The custodian requirements work by cutting off the operational mechanics of Ponzi finance: they curtail an adviser's ability to pay existing investors with money invested by new investors, and custodians may execute client trades but cannot remit sales proceeds to the adviser or to third parties.

**Type.** mechanism  **Support.** argued

**Holds when.**

- client assets held through qualified custodians under the Dodd-Frank custody rules

**Source quote.**

> The custodian requirements under the Dodd-Frank Act curtail investment advisers' ability to pay existing investors with the funds invested by new investors.

**From.** Wulf A. Kaal, *Investment Adviser Regulation* (2013), 7. Custody of Client Assets, page 19

**Cite as.** Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268

**Verify.** sha256 of source PDF `7075ce35282a8ee75b81ae3dec0e19f68631beae7f3c3a00ab2827538dc9e302` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202013%20-%20Investment%20Adviser%20Regulation.pdf

**Topics.** defi

**Keywords.** custody, ponzi-schemes, cash-flow-control, client-assets

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.