Dodd-Frank Wall Street Reform and Consumer
of 2010 really succeeded? How much has really changed over the past
Here's a short checklist of what it's done so far.
1. It still hasn't outlawed banks (NYSEARCA:KBE) that are too big
2. We still have loopholes in insider trading laws for members of
and consulting bribes).
3. We still have national stock exchanges (
) sharing information with high-frequency traders (HFT) and anyone
that will pay them a data fee. It's called legalized front running.
4. It still hasn't stopped new and even more liberal rules from
being passed. For example,
hedge funds will now be permitted to market
themselves to Main Street investors
. It can't be long before we see advertisements for convertible
arbitrage funds in
! Here's another example of lax regulation: The SEC is now clearing
the way for the promotion of
unregistered stock offerings
5. The top brass at the SEC and other financial regulatory bodies
are so closely tied to Wall Street and the institutions they
regulate that their personal biases and business alliances
consistently conflict with their responsibility to protect the
public. As a result, regulators are rendered impotent.
The ongoing public debate about the broker/advisor fiduciary
standard is further proof that Dodd-Frankenstein is still a) too
confusing and burdensome to be implemented, b) can't be
implemented, or c) all of the above.
In my book
Gents With No Cents: A Closer Look at Wall
Street, Its Customers, the Media, and Financial Regulators
(HalfFull Publishing Group, 2011) I wrote:
I know there's a growing populace that would like to abolish the
SEC and they have a point. No existence is better than an
ineffective existence -- isn't it? I liken the SEC's existence to
the feathers on an ostrich. Do an ostrich's feathers help it to fly
better? Not really, but liken the SEC, the feathers are there for
decoration. Can you imagine what an already ugly beast would look
like without feathers? For the public good, I would like to see the
SEC simplify its charter and aim for more achievable milestones.
How about this one: We won't make things worse.
The enforcement of existing securities rules is a tough nut that
Dodd-Frankenstein still hasn't cracked. And the financial services
industry is still overregulated and underpoliced.
In the meantime, the best advice I can give people is to get some
basic financial education and be defensive with your assets so you
don't get scalped. And one more important thing: Stop relying on
securities regulators to protect you from financial crackpots.
Editor's note: This story by Ron DeLegge originally appeared on
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