Here's How The SEC Is Failing Individual Investors

According to Sallie Krawcheck, We have passed an important milestone coming out of the financial crisis, though its watershed status has received surprisingly little notice. That milestone is the first significant test of how regulators (in this case, the SEC) approach individual investor protections in the post-crisis era…….. Several weeks ago, SEC Chairman Mary Schapiro failed to muster the needed votes from the SEC Commissioners to take the next step in increasing the safety of money funds. Note: this was not a final vote to enact new regulations, but simply a vote to put the proposal out for public comment. (!!) But she couldn’t get the votes for even that……. For those who have not been following the saga: Money funds are a $2.6 trillion industry; individual investors who place their cash in them generally believe the funds to be risk-free (which they are not), based on the stable value of the funds and the implicit guarantee that the asset management firms issuing them will return their money at 100 cents on the dollar. An implicit guarantee to individual investors for an investment that entails risk but is not backed by capital, involving huge sums of money? What could possibly go wrong???? We already know the answer to this…...... Read more: http://www.linkedin.com/today/post/article/20121009120516-174077701-individual-investor-protection-litmus-test-failed#ixzz28uaw4S5l