We Need To Rebuild The U.S. Securities Act From The Ground Up

We need to rebuild the U.S. Securities Act from the ground up to eradicate conflicts of interest in the financial-services industry. There need to be different systems of rules and regulations for the “sell side” of financial services, which creates and sells financial products such as IPOs and mutual funds, and the “buy side,” which includes all owners (sophisticated and otherwise) and managers of capital and their agent brokers.

How many of you recall these words?

http://online.wsj.com/public/article/SB114919299432468995-i_QZj733SC_6xd…

Yes, that was me, screaming at the legislators and regulators of the world, and admonishing the securities industry for their “bad” acting.

Where did I choose to issue the challenge? The Wall Street Journal. June 2, 2006. One year before the US financial system collapsed and one of the most horrific bear markets in history started.

The editors of WSJ selected me, calling to ask if I would help them kick off a new debate series. I would be going up against an editor of the Washington Post and Fortune Magazine, and manager of two fund of funds who obviously wanted no regulations over hedge funds. The question was, “Would you agree to take the other side?” I was honored to be asked, and, after I replied, was even more flattered with their comment, “We thought you would.”

I have often been extremely critical of mainstream media, often referring to it as entertainment filler between commercials for Wall Street interests. But, I understand their situation, and in many cases, I respect their knowledge and ability to communicate. I’d just like to see them make more of an effort to do the right thing.

Without conflict of interest existing in capital markets, can you imagine the trillions upon trillions of dollars that would not have been taken from the portfolios of the working man in just this decade alone? I am thinking about that today, Labor Day in Canada and the U.S. I’d also like to think that the working editors of mainstream media would not have to fear for their jobs and careers if, as and when writing about the truth (or lack of it) underlying our capital markets. I feel sorry that they cannot be independent.

In their place, more of us need to speak up whenever we get opportunities like the one afforded me by the WSJ. Yes, speak up please.

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