The Derivative Project is forced to launch its first Wall of Shame. Who are the first entrants?
Congressman Barney Frank (D-MA) and 30 other Democrats who sent a letter to Secretary of Labor Hilda Solis on Monday, November 7 under the “guise” that they are protecting the little guy who cannot afford “investment advice” for his or her IRA.
Here is the link to the article in Investment News, “Lawmakers, adviser groups gird for another fiduciary-rule battle with DOL,” published November 8.
The brokerage firms’ army of lobbyists have taken over and convinced these 30 Democrats these useless fees must continue and that the raiding of your IRA must continue if the brokerage industry is to continue. It is that simple. Congressman Frank, as the ranking member of the House Financial Services Committee, has chosen the profits of the brokerage industry over the safety of your IRA and your right to a fair and honest legal due process if your IRA is harmed by an “investment advisor.” Shame on your Congressman Frank, (D-MA) Shame on your Rep. James Hines (D-Conn), and Rep Carolyn McCarthy( D-NY )who represent the three states were the brokerage industry is the largest. This is American democracy at its lowest point. If this in not reversed, frost bite will set in at Occupy Wall Street.
The unnecessary loss of over $2 trillion of American’s retirement savings during the 2008-2009 financial crisis is enough to convince anyone it is time for a new model of professional advice, that is in the best interests of every American’s retirement savings and not that of the brokerage industry that sold us all useless, fraudulent securitized mortgage products and stuffed our money market accounts with structured investment vehicles (SIV) that went bankrupt. They are not held accountable, they are not put in jail, because they have ensured they are not fiduciaries. Congressman Frank is ensuring these Wall Street firms can continue their deceitful product sales to your IRA’s, with no recourse and no chance of being jailed for their illegal taking of your retirement dollars.
No thank you Wall Street lobbyists. We all know it is time that you act in our best interest, not yours. Checkmate. The days of having free rein to raid our retirement accounts is over. We are asking Congress to ensure that. Every IRA will have the ERISA fiduciary standard, which simply means:
- Any investment advice given to our IRA must be in our best interest, not the brokerage firm’s interest.
- If our IRA is harmed, we will not be subject to mandatory arbitration and have to go before the brokerage’s industry’s kangaroo court, FINRA or be dependent on the conflicted SEC to stand up for the protection of our retirement savings. We will have the “right of private action” if an investment advisor breaches his or her fiduciary duty. We will have the right of legal due process, the right to go the courts, to the judicial branch, to determine if we were harmed, not the brokerage industry. Our democracy is based on checks and balances. The financial crisis of 2008-2009 happened because there were not these checks and balance. Congress was bought off by lobbyists and the Judicial Branch was neutered.
The Derivative Project readers, it is now time for action. Send this letter today, ask your friends and neighbors to send this letter today to Congressman Spencer Bachus (R-AL). This is one simple step you can take to help steer our economy back to healthy, stable growth, not one based on useless fee income to brokers that render self-serving, unprofessional investment advice to our IRA’s. Protect your retirement savings and take action today:
Just copy the letter below and send it to the link to Congressman Bachus at the House Financial Services Committee:
Contact your Representative and send this letter. Here is a link to find your Congressional Representative’s email:
Here is the Letter for you to Send
House Financial Services Committee
Chairman Spencer Bacchus (R- AL)
Dear Congressman Bachus:
We understand that Rep Barney Frank (D- MA), Rep Carolyn McCarthy (D-NY), and Rep James Himes (D-Conn), along with 30 other House Democrats, sent a letter November 7, 2011 to Secretary of Labor Hilda Solis, opposing her proposed rule that would protect IRA’s from useless fees charged by brokerage firms and additional protections from fraud and deceit in the sale of financial services products to IRA’s.
This lack of an ERISA fiduciary would also limit IRA savers from going to District Court, “a right of private action”, when their retirement account has suffered losses when a broker or “investment advisor” has breached their fiduciary duty. Under these 30 Democrats’ proposed plan, if IRA accounts have been harmed, they must take their complaint to the brokerage industry, FINRA.
We all know from the frauds of Madoff and Stanford and the sale of useless mortgage securitized products; FINRA and the SEC are not protecting the average investor. Retirement savers need the option to go to District Court to have an impartial jury to protect their legal rights, when their retirement savings have been looted.
These 30 House Democrats oppose a “fiduciary” standard comparable to what is available currently for 401k’s, simply to continue the outdated, ineffective brokerage model of unprofessional advice to retirement accounts, that is in the brokerage industry’s best interest, not the IRA holder’s. We insist that Congress implement a fiduciary standard, exactly like that in ERISA, to protect our retirement savings in IRA’s.
The rationale for this reduced standard, according to the brokerage industry, is the small IRA retirement saver would no longer have access to affordable investment advice, if they must act in the retirement saver’s best interests. It cuts into their profits and prevents them from being held legally accountable for fraudulent, deceitful actions.
You are well aware that there are sophisticated, professional investment advisors that are ready and able to provide investment advice on a non-profit basis to help out those in need. Every retirement account has suffered due to the lack of a fiduciary standard during the most recent financial crisis. It is now time to focus on the allocation of scarce capital, retirement savings, to the most effective use, which can no longer be mis-appropriated to useless fees for unprofessional, poor advice, if our stagnant economy is to ever recover.
The ERISA fiduciary standard works for 401k’s. Every IRA deserves the same fiduciary protection. Please oppose these 30 Democrat’s proposal limiting a true ERISA fiduciary standard and introduce legislation for an ERISA fiduciary standard for IRA’s today, that is law by December 31, 2011. Our retirement savings need Congress’ protection, now. Thank you.