A New Administration, A New Focus On Investor Protection?
We approach today with new hope. New hope that a new President can lead us out of the once-in-a-century economic crisis that faces us. New Hope that we can become a force for good throughout the world and that we will make smart choices about committing our troops overseas. President Obama will find more urgent matters awaiting him when he first sits down in the Oval Office than any President in recent memory. No doubt, he will have to prioritize. Let’s pray that protecting American investors does not fall too far down that list.
President Obama has nominated Mary Schapiro to head the U.S. Securities & Exchange Commission. Her nomination has created a stir. Ms. Schapiro served as a Commissioner of the SEC during the 1990’s, and later went on to head the Financial Industry Regulatory Authority (FINRA) - the organization that is supposed to be the first line of defense in investor protection. Those of us who represent investors know, however, that FINRA is a symptom of a regulatory structure that puts investor protection behind corporate profit.
Whether Ms. Schapiro can throw off the FINRA mindset remains to be seen. Her time at the SEC and the extraordinary challenges facing that agency might lead her to a bold advocacy for investors and a willingness to think broadly and boldly about solutions. Let’s pray that Obama asked her those kinds of questions before making the appointment.
We have been warning about the tsunami of investor fraud breaking over America since we began Investor’s Watchblog more than one year ago. All of our predictions have come to pass. People have found that regulators alone cannot protect their nest eggs. They have seen that FINRA does not provide full disclosure about stockbrokers. Investors have come to understand that only private investor protection services can help them protect what they’ve worked so hard to save.
The honeymoon will be short, both for the President and for the SEC. We’ll find out fairly soon whether we can count on Ms. Schapiro - who will almost certainly be confirmed by the Senate - to meet these extraordinary challenges with unprecedented action. I believe she can do it. Soon we will learn whether she will.