JP Morgan Chase Mutual Fund Sales Scandal Shows SEC Is A Joke At Investor Protection: RIAs Should Rise Up Against The SEC And Be Advocates For Investors Hot

agluck July 03, 2012

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Today’s scandal is the exact same crime against investors that Wall Street brokerages were prosecuted for in 2003.

The sales abuses were an open secret then as they are now. (An SEC study, ironically led by Merrill Lynch’s Chairman Daniel Tully, found widespread mutual fund sales practice abuses in 1995.

You fiduciaries ought to be blogging about this madness.

What’s even crazier is that before you could wash the ink off your hands from this morning’s paper, JPMorgan Chase was being probed in yet another scandal, manipulating the electrical power market.

This is happening just a few days after the trading loss racked up (by a former classmate of mine) was estimated to total $9 billion.

To be clear, the SEC is a joke because it’s not created a deterrent to prevent Wall Street brokerages from selling house-brand mutual funds that pay brokers more than other funds, creating an unforgiveable conflict of interest that has screwed investors many decades, and everyone who understand Wall Street knows this.

RIAs should rise up against the SEC and be advocates for investor protection by writing their Congressional representatives and getting membership groups to advocate for investors. That’s what a fiduciary should do.

Advisors must be pro-consumer. Niot just pro-advisor.