November 30, 2010
Posted in: Capitol Hill | Securities Law | Greedy Brokers | Breach of Fiduciary Duty | Risky Investments
In 2008 Oliver Stone made the decision to produce is film sequel, "Wall Street: Money Never Sleeps". By the time the movie released to audiences worldwide earlier this year, average Americans were still feeling the effects of the recession and directing their ire at Wall Street.
Susan Antilla, a syndicated columnist who has written extensively on the economic downturn, points out that while more Americans than ever are bemoaning Wall Street and corporate greed at large, more due attention needs to be paid to investment advisors and brokers.
It can be easier to blame Wall Street rather than a string of individuals, especially since the recession has affected even non-investors. But as Antilla pointed out, there are too many instances of individuals knowingly harming investors, and simply getting away with it for too long because of systematic failures.
Claims against large broker-dealer firms, the type of firms Americans think of when mentioning "Wall Street," can vary in scope but often involve supervisory failures. The job of a broker-dealer, other than holding billions or trillions in customer assets, is to monitor and improve relations with all of the individual brokers under its umbrella. If an employee at Citibank or Goldman Sachs breaks securities laws to harm clients, his employing firm is also culpable.
But even though we should punish any firm who fails to adequately supervise a broker, should we not hold regulators accountable for their lapses as well? If Bernie Madoff, Allen Sanford and a string of financial fraudsters were nabbed by state or federal regulators before stealing billions in investor money, would Americans feel the same about Wall Street?
It is easier for individual brokers and advisors to maliciously defraud people with fewer people knowing about it, which is why individuals deserve as much scrutiny as firms. Despite the times, people are still willing to trust financial advise based on a prior relationship, word of mouth, or simply a good feeling after meeting with a broker.
Rather than just be suspicious of Wall Street, be suspicious of anyone who has ever handled your investments.
