Hey, Dan -
There has to be limits on how far one person can go in pursuit of personal gain at the expense of others.
I certainly believe that there should be, and that they are well elucidated in the laws and regulatory measures addressing legitimately (and proven) fraudulent acts. Other than those, I can't think of any others, really. I certainly don't buy into antitrust or predatory pricing theories.
Most people do not and they rely on the expertise and integrity of others to do things for them. Most businesses function based on this premise.
Dan, that is an absolutely excellent point and one that I respond to regularly. My usual answer/response is that while individuals often take it upon themselves to educate and work with their customers, ultimately we're all flies in someone else's web. That suggests the comforting notion that while I may get taken as a complete fool by my mechanic, I'll know my way around the brokerage office better than many of the people who work there; I may be a complete sucker for some locally obvious scams or pranks when I go out west, but in NYC you'd be hard pressed to pull one over on me. And so, things even out, and we generally get wiser (though not necessarily more intelligent) with age. More importantly, those lessons permeate through our families, our community, and ultimately our society, making for tough but well-learned lessons.
Like you, I would far prefer to see a response that targets the wrongdoers instead of sweeping regulation that makes it more difficult for legitimate enterprise to function, but I find the notion that if I can trick somebody into giving me their money under false pretenses, and then turn around and say it's all their fault because I was just doing my job, unacceptable. I don't care if it's a salesman, or an evangelist, or a charity, or a broker/dealer/analyst.
I can't disagree with this, Dan. Not one bit. And perhaps some of the more innovative, less intrusive solutions would include the creation of a certain class of licensure, a mandatory track record disclosure, a real-time update of a specific analyst's recommendation performance on the firm's website, or something to that effect.
I'm sorry to say that it has been my personal experience that the financial industry has demonstrated little integrity from within. Mine is of course a relatively small sample, so perhaps it is not an accurate representation of the industry as a whole, but it is sufficient to lend credibility to the accusations I hear coming from the likes of the NYAG and others now joining the party.
That's one of the major issues I have with regulators undertaking flippant, hastily patched-together market engineering initiatives: they often do so while real problems - criminal chop shop operations, pump-and-dump internet promoters and the like - go unnoticed or, worse yet, noticed but unaddressed.
I would ask this though: in your personal assessment, did you find that your negative, personal experiences - certainly painful, I have no doubt - have ultimately made you far savvier than your peers and associates on such matters, perhaps even giving you the hard-won experience and wisdom to provide them advice in that regard?
LP. |
