The Derivative Project

Occupy Wall Street Will Highlight This Incredible Web of Deceit Finely Tuned by Washington and Wall Street

Occupy Wall Street Will Highlight This Incredible Web of Deceit Finely Tuned by Washington and Wall Street


It is not easy to expose an intricate web of deceit in a short post, but this blog post should be a key 2012 election issue;  if not Occupy Wall Street needs more blankets for a long, cold winter in the park.  They are the future to expose this finally crafted machine of deceit by Wall Street, Washington, organized labor and major media.

Occupy Wall Street is calling attention to economic injustice, that has been allowed to permeate our society due to the lack of a viable Fourth Estate, critical to a vibrant democracy.  Contrary to the pundits, they don’t need an Agenda at this point.  They are doing what is right.  Our democracy is broken, our media from Huff Post to NPR to the New York Times to Minnesota’s MinnPost are all captured by corporate interests and the money they funnel them to keep them alive.  Organized labor investor advocates are also captured by Wall Street.

Organized Labor, Washington and Wall Street is a Finely Tuned Machine

Today’s Wall Street Journal has an article “Getting the Most From a Lame 401K.”  Here is a link to this “advice” article.

This is a very subtly deceitful “advice” column from today’s Wall Street Journal,  that pretends to be advice for the “poor, uninformed” retirement saver.  The irony of this “advice” is it is intended to capture more assets for Wall Street, where the Street can continue to sell the average retirement saver junk like structured investment vehicles, auction rate securities, and derivative laden funds, that reap big fees for them and big risk for the retirement investor, with no legal recourse when harm is done to a retirement saver, by Wall Street.

The Department of Labor is Trying, but Organized Labor and Wall Street are Fighting Back

Yes, finally the Department of Labor is being forced to enforce fiduciary laws under the Investment Advisor’s Act of 1940 and ERISA,  due to abuses revealed by the 2008 financial crisis. What does Wall Street do?  They enlist the media to get you to move your money to IRA’s as soon as you can so they may escape this fiduciary enforcement in your 401K.  They may continue to rip off retirement savers, with no legal recourse if you move your retirement savings to IRA’s.

Wall Street enlists consumer advocates (Consumer Federation of America) to represent them to Washington in Congressional Hearings.  Keep reading.

Please bear with me.  Wall Street has worked for many years to craft a web of deceit that has captured all of Washington, every regulator, the Department of Labor, and so called “investor” advocates for labor such as the Consumer Federation of America.  Since the advent of 401k’s and IRA’s in the early 1980′s,  over 30 years, a finely tuned machine has been crafted by Wall Street to bar the individual retirement saver from any legal recourse when investor laws are broken.

Retirement savings are a gravy train for Wall Street, an engine of unsustainable economic growth, that has pushed our GDP over 41% dependent on fee income from financial services.  With the housing bust, Wall Street is enlisting labor to advocate for them to retain this last source of easy fees taken from the backs of the average American’s retirement savings, with no threat of legal recourse, just like the latest financial crisis.  Although the global  economy is crippled and we are hovering towards a Great Depression,  “What they (financial institutions) did was wrong, but it was not illegal, say our Department of Justice.”  Wall Street wants to ensure they can continue into the next bust without any legal recourse for their wrong-doings and they are making great inroads in that effort, to the detriment of every retirement saver.

In this article, the WSJ writer advocates those 59 1/2 move their retirement savings out of a 401k because the fees are so high and choices so limited.  The writer also states: 

“The good news is that many plans are making improvements, thanks to increased use by regulators of the F word—”fiduciary,” as in the financial responsibility of employers toward their plan participants. New Labor Department rules that take effect in mid-2012 will make 401(k) costs easier to see..”

Yes, finally the Department of Labor is taking baby steps to expose the sham of the 401K’s and the licensed stealing by Wall Street of every American’s retirement savings.

What this article does not tell you is that Wall Street wants you to move your 401K  to an IRA and the sooner the better, for them.  Why?

Why Does Wall Street Want You to Move Your 401k to an IRA?

Wall Street lobbied Congress to ensure their is no fiduciary standard for IRA’s.  SEC registered investment advisors and brokers can continue to act in their best interest, not yours in IRA’s —thanks to Congress and your investor/labor advocate, the Consumer Federation of America, Barbara Roper.

The world of IRA’s, a multi-trillion dollar revenue market, for Wall Street, is the last frontier for Wall Street and their last hope for ripping off every retiree without conscience and without any legal recourse.  In the world of IRA’s,  Wall Street has a carefully crafted machine and easy income stream, where there are no rules or regulations, if they break existing laws, such as the Investment Advisor’s Act of 1940.  Wall Street has successfully prevented you from coming after them in courts and allowing any class action suit for the little guy that can’t afford to go after them, when your IRA has been harmed and laws have been broken.

Organized Labor’s and Wall Street’s  Web of Deceit, Finely Tuned Over Three Decades

Lack of any legal recourse for a retirement investor in an IRA is a main reason retirees lost over $2 trillion dollars of their retirement savings during the 2008 financial crisis.  Wall Street is immune from every law and regulation. Organized labor advocates for Wall Street and these limitations to retirement saver’s legal rights.  Dodd Frank told the SEC to investigate a stronger fidicuary standard, that  perhaps Wall Street should adhere to the fiduciary standard put in place by the Investment Advisors Act of 1940, after the Great Depression.  Wall Street is making sure that will not happen.

No Legal Rights for an American to Enforce an Existing Fiduciary Standard/ Exisiting Law for the IRA

The retirement saver has no recourse in their IRA to go after the wrong doers. The law exists, but Wall Street has prevented the little IRA holder from enforcing it in a court of law.

Constitutional rights are blocked currently for IRA holders. This must be the first order of change  for the Obama Administration:  stand-up now and expose this web of deceit and offer real protection for retirement savers.

  • Currently, if your IRA is harmed by an SEC registered investment advisor, you must go to mandatory arbitration, regulated by Wall Street, because all brokerage agreements require it.  To invest in an IRA, you need a brokerage account.
  • Currently, the brokerage firms, in a kangaroo court, called FINRA, which is the brokerage firms, decide if you have been harmed.  Of course they will decide in their interest, Wall Street’s, because it is in their interest to do so.  They make the rules and Wall Street “enforces the rules.”
  • If, Wall Street/FINRA agree you have been harmed in an arbitration hearing, that you have indeed lost over $100,000, due to a breach of fiduciary duty, that is your tough luck, because Congress has not given them (FINRA) the right to enforce the Investment Advisor’s Act of 1940.
  • You
    appeal to the SEC.  They say FINRA has already decided. Our hands are tied.  We can’t help you out.  We don’t deal in little $100,000 fraud for the little retirement investor, even though that money is critical to you.  We only deal in the big frauds like Madoff and Stanford, after the fact. 
  • You call foul play and want to go to the courts to complain.  Whoops, you can’t!  You have no legal rights against Wall Street.  They have made sure that Congress has not given you the “right of private action” to go to court and get back what Wall Street owes you. 
  • Under your 401k, you currently do have a legal right to sue Wall Street.  You have the “right of private action.” Under your IRA you currently do not.  That is why this Wall Street Journal reporter is a shill for Wall Street.  It is better for Wall Street in the long run if you move all your assets to an IRA where you have no legal rights to go after Wall Street when they have harmed your retirement assets and breached their fiduciary duty.

Congress, Labor and Wall Street Are Moving to Ensure Wall Street Cannot Be Sued When They Breach the Investment Advisors Act of 1940 in your IRA, Even Though Dodd-Frank Thought Perhaps this Should Change to Prevent Another Financial Crisis

The Derivative Project had a live blog (Scroll Down the Page) on the last Hearing by the House Financial Services Committee on implementing a fiduciary standard for your IRA’s and giving you the right of private action to appeal to someone other than FINRA when your retirement account has been harmed.   This hearing dealt with the issue if there is a breach of fiduciary duty (meaning the investment advisor put their interests over your retirement account’s) should the average retirement investor have any legal rights to pursue their claims in a court of law.

President Obama, Washington— Democrats and Republicans, came out on the side of Wall Street, limiting the right for a harmed IRA retirement investor to go to the courts. Wall Street may continue to act in their best interest, not yours and take your retirement savings through fraud, deceit, whatever method and they are immune to your claims for justice.

Even Barbara Roper, Investor Advocate for the Consumer Federation of America, that represents labor and most consumer advocates, stated retirees do not need the ERISA fiduciary standard for their IRA, they do not need the “right of private action.”  Ms. Roper advocated fiercely for Wall Street’s interests, including allowing a self-regulating organization, such as FINRA, to decide if your retirement accounts have been harmed by Wall Street, with no right for the retiree to go to court, if there is self-dealing by the self-regulating organization and when laws have been broken by Wall Street.

Occupy Wall Street, this points out why you must be wary of organized labor, that represented to Congress they are the investor advocate, when they are quietly advancing Wall Street’s agenda.  They are not representing every American who is saving for retirement best interests.  They are representing Wall Street’s interests.

This is a finely tuned machine.  This is why the young have no choice and why The Derivative Project believes in Occupy Wall Street.  Someone must expose this fraud and deceit and the most basic abuse of the average American’s constitutional rights to their day in court when there has been self-dealing in their retirement accounts.

Let’s see how long it will take for the Huff Post or the New York Times or the Wall Street Journal to pick up this story, the truth about your legal rights and your retirement savings.

Bring warm clothes to our brave and self-less young in NYC, it is going to be a long, cold winter.

Reference Previous Blog Posts:

The SEC Study on Fiduciary Duty is Not Only Conflicted, but Harmful to Our Retirees, Youth and Our Economy’s Future

Attention Retirement Investors:  This is The Legal Issue You Must Become Familiar With