The Derivative Project

Retirement Savers Need A Bona Fide Advocate and Their Day in Court

Retirement Savers Need A Bona Fide Advocate and Their Day in Court

Third Dodd-Frank Fiduciary Standard Proposal Allows Private Right of Action
MINNEAPOLIS, April 13, 2012 /PRNewswire via COMTEX/ — On April 3, 2012, The Derivative Project, a Minnesota-based non-partisan, investor advocacy organization, delivered a Petition for Rulemaking to the Securities and Exchange Commission. The purpose of the Petition is to restore the original intent of the Investment Advisers Act of 1940, which requires a clear dichotomy between a salesperson and an Adviser.
The Petition seeks three remedies to protect American retirement investor savings, (1) Eliminate dually registered Wrap Accounts, (2) Ban mandatory arbitration for all retirement savings accounts and (3) Allow a private right of action for any retirement savings account.
Why is this Petition necessary? The SEC has received only two proposals for a “fiduciary standard”, mandated by Dodd Frank. Both proposals are from the brokerage/financial planning industry. Neither presents a true “fiduciary” standard for the retirement investor, due to blurring of roles. Both serve to benefit the brokerage/planning industry while simultaneously harming the individual retail retirement investor. Both proposals continue to eliminate any legal recourse for the retail retirement investor (IRA), when there have been breaches of fiduciary duty.
“Investors deserve their day in court, ” stated SEC Commissioner Aguilar recently. “It is unrealistic to expect that the Commission will have the resources to police all securities frauds on its own, and as a result, it is essential that investors be given private rights of action to complement and complete the Commission’s efforts.”
IRA investors who have been defrauded or harmed by breaches of the Advisers Act currently have no access to the Courts, which only serves to exacerbate fraud and unnecessary retirement losses.
The Derivative Project’s Petition for Rule Making is available at the Securities and Exchange Commission’s website: www.sec.gov/rules/petitions.shtml .
The Derivative Project is a non-partisan, Minnesota – based investor advocacy organization that seeks to ensure the long-term stability of the U.S. economy through equitable enforcement, for both individuals and corporations, of financial laws and regulations.
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