Lying for the express intent of misleading customers to purchase is fraud, regardless of whether it is an automobile customer or a brokerage customer!
Agreed, and I've never disputed that. But I'm sure that (a) giving a sales pitch and, subsequently (b) stating a personal opinion that deviates from that sales pitch does not equal wrongdoing, let alone fraud. Except for, perhaps, in the minds of "adverse selectors."
Unlike the car salesman who sits on the company side of the negotiating table, the analyst is being promoted as sitting on the customer’s side of the “negotiating” table.
The key word there is "promoted;" other equally applicable words might be 'marketed,' 'advertised,' or 'sold.' Any commercial or ad, whether for an airline, a breakfast cereal or a vacation destination, attempt to represent themselves as having some common ground with or affinity for the viewer. The only difference here - and it makes all the difference when the realization that such representations are pure marketing efforts hits home - is what is suggested lays at the far end of the rainbow: not a smooth flight, a delicious cereal or a relaxing vacation, but financial security.
The way I see it...any person who watches a TV commercial, reads an ad in a magazine, or is similarly persuaded to a point of making financial decisions because some anonymous stranger...making stock recommendations for a large brokerage firm...might be their "friend" or even remotely concerned with their welfare...falls squarely within the hopelessly naive, greater fool category.
If there is a crime here, in my opinion, it's the systemic risk that, with each clumsy, overreaching regulatory initiative, is incrementally imposed on the nation by attemps to subsidize the learning curve of the gullible.
Several years ago, in my naiveté, I believed what analysts (and accountants) said and wrote.
And you learned not to. Some people eventually do, and some never do. And that's how it goes - in my opinion, that should be the end of the story.
While I’m sure that many are good, honest people...
Well, let's not go crazy, Dan...
...I view the profession as I view pimps and street hustlers – just some scum who are trying to cheat me out of my hard-earned dollars.
I view them as common salespeople, no different - certainly no better - than anyone else in the world hawking goods.
I've only known one research analyst personally, and he left that side of the business to become a proprietary trader at a different firm - he'd found corporate analysis incredibly boring, with long hours and low pay. And when last I spoke to him, he was still a trader and doing pretty well.
Between the accounting scandals and analyst scandals, middle-America is waking up to what more knowledgeable financial industry observers (such as you) have known for a long time.
What are you alleging that "[I...]have known" for a long time?
At minimum, there will be more investors who trust themselves rather than their broker.
Well, they should have done so from the start. I'm sure that the majority of the same people who blindly dove into strangers' stock recommendations told, and still tell, their kids not to take rides with strangers. I'm sure they hang up on telemarketers and scrutinize the work orders/receipts they get following maintenance done on their cars, ever mindful of and watchful for bill padding. And I'm certain that they know, month-to-month, what their telephone and cable bills, paychecks, and other receivables look like or should look like.
It's mildly curious at best...humorous at worst.
LP. |
