Wall Street Puppets Continue to Manipulate Washington

A new bill was passed in the House this month that aimed at preventing Federal regulators from establishing new rules on Wall Street to increase accountability on the professionals that manage retirement savings.

The bill, titled the Retail Investor Protection Act, was created in response to the Department of Labor(DOL)’s recent efforts to change the definition of fiduciary standards as it is applied to financial advisors and stock brokers. The bill is designed to prevent the Department of Labor from creating new rules and regulations over Wall Street.

Fiduciary standards are commonly placed on white collar professionals, designed to ensure that the professional is always working to serve the best interest of the consumer, and not putting their own benefit first.

Much of the 2008 financial crisis was credited to mismanagement of funds and unethical practices by professionals within the big financial firms on Wall Street. The general consensus among Wall Street critics is that the financial industry professionals valued profiting from high fees and risky investments more than they valued the wellbeing of the everyday investor. As a result, many have called for stricter fiduciary standards over these individuals who manage investment assets.

Assistant Labor Secretary of the DOL, Phyllis Borzi, has taken the lead on bringing a stricter fiduciary standard to Wall Street. Since 2010, Borzi has been fighting to develop new rules on fiduciary standards for financial professionals. She has said that the measure will focus on protecting retirement savings from unethical management investments but not prohibit commissions for financial professionals. Her said goal is to hold investment advisors accountable.

“What I’m talking about is making sure the advice you give is primarily, overwhelmingly and undoubtedly the best plan for the client,” Ms. Borzi told an audience in September at a Financial Services Institute Inc. conference in Washington.

However, the mission to bring more accountability to Wall Street professionals went stale when the proposed fiduciary rules were withdrawn in 2010 after being met with much resistance from Wall Street. Bank lobbyists, and the politicians that favor big banks, were up in arms rejecting the attempts to make financial professionals more accountable for their decisions when managing savings accounts.

Since word got out that the DOL is set to reintroduce the 2010 proposed fiduciary rules in the coming months, there has been a return of forces that don’t want to see this regulation take effect, beginning with the campaigning of the Retail Investor Protection Act.

The Retail Investor Protection Act was proposed by U.S. Representative Ann Wagner in response to recent regulatory efforts by the DOL.

Representative Ann Wagner has been spearheading this legislation that will essentially handcuff the DOL, preventing them from establishing any new rules to govern Wall Street, unless the SEC first adopts the rules. The act also forces the SEC to jump through hoops before they can enforce new rules.

So why is Ann Wagner trying to make it even harder to keep up with regulations on an industry that has already gained a reputation for its greed and loose legislation?

A quick review of who helped put her in office shows that she may have a bit of bias when it comes to the battle between the everyday consumer and the big banks on Wall Street.

Below is a list of the top 5 contributors to Wagner’s 2013-2014 Campaign. 

 Wagner Fin Chart

This list shows Wagner’s top 5 contributor’s for her 2013-2014 campaign, by industry.

Wagner Fin Chart 2

 

Rep. Ann Wagner’s personal finances also show that she is heavily invested in securities with multiple big name firms on Wall Street.

Wagner is aggressively promoting her creation, the Retail Investor Protection Act, and because of her strong ties to Wall Street some are saying that this act is a perfect example of what the new proposed fiduciary rules are meant to prevent— conflicts of interest.

If Wagner’s bill passes the Senate it then moves onto the President for signing.

In the meantime, the proposed fiduciary rules have been delayed and are unlikely to take place in 2013. At the time of writing this article, it is unclear exactly when any new rules will actually take effect… if at all.

Phil Cannella
Partnered with CBS Radio Network, Phil Cannella reports on the issues most important to the American retiree.
Phil Cannella
- 1 day ago
Phil Cannella

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