I’ve written about financial reform before, but I think given the current economic and political climate, it bears a re-write.
Or maybe just an addendum.
I’m a little unsure as to who should be writing this financial reform. The people we’ve elected to Congress don’t seem to have a clue. Witness the proceedings against Goldman Sachs executives, where Senators were having difficulty understanding the difference between a “market maker” (an entity that supplies liquidity by trading in a security) and a “fiduciary” (person or entity required to put their clients’ needs ahead of their own). It was as if Congress was speaking a foreign language – one even they didn’t know.
It is becoming painfully obvious that this issue has morphed from one that is necessary to protect the public at large and investors in particular to one of political expediency. Each Senator has dozens of staffers (on taxpayer payroll) that are supposed to help them draft legislation. One of the issues is that these people are insiders.
The cronyism that goes on at the highest levels of the Self-Regulating Organizations and even our government is a huge problem. The attorneys and senior executives at the Bear Stearns of the world go and work for the government or these SRO’s, and don’t exactly enforce actions on their buddies. I wonder how many buddies Bernie Madoff had? It’s a good bet that he had quite a few.
Bill Singer, an attorney and writer, has written about these situations before. His website, www.rrbdlaw.com is full of anecdotes of how the banks are in bed with the feds.
Ordinary investors should be writing this legislation, along with independent thinkers like Mr. Singer. It bears mentioning that the current legislation that is in play in no way helps investors to become better protected. We need TRUE financial reform and not this politicized monster of a bill that does nothing to protect investors.