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Akaka, Menendez introduce amendment to Wall Street reform bill

MEDIA RELEASE

U.S. Sens. Daniel K. Akaka (D-Hawaii) and Robert Menendez (D-New Jersey) have offered an Honest Broker amendment to the Wall Street Reform bill to obligate financial professionals to act in the best interest of their clients by imposing fiduciary duty on brokers.

Akaka said: “We have seen too many examples of brokers profiting from pushing higher commission inappropriate products. This amendment would bring accountability to brokers by creating a legal obligation to put their clients’ well being before their own. Investors must know that their broker is acting in their best interests.”

Menendez said: “The saying goes ‘The customer is always right,’ not ‘The customer is an afterthought.’ The evidence from the Goldman Sachs case shows how some bankers have put their own interests ahead of their clients’ trust. People don’t invest their hard-earned money just to line the pockets of their stockbrokers. They should be able to invest with the peace of mind that they are dealing with trustworthy investment professionals.”

Brokers currently have the same conflict of interest Goldman Sachs is accused of in its civil fraud case by the Securities and Exchange Commission (SEC): financial incentives to steer clients toward bad investment products that brokers make more money on.

The amendment would require brokers to act in the best interests of their retail clients, require brokers to disclose conflicts of interest, and give the SEC discretion to apply a fiduciary duty standard for all types of investors including institutional investors who were allegedly victimized by Goldman Sachs.

The Honest Broker amendment is supported by AARP, Americans for Financial Reform, Consumer Federation of America, Investors’ Working Group (Council of Institutional Investors), Investment Adviser Association, National Association of Secretaries of State, North American Securities Administrators Association, and the National Governors Association.

Sen. Richard Durbin (D-Illinois) is a cosponsor of the amendment. Sens. Akaka and Menendez are members of the Senate Committee on Banking, Housing, and Urban Affairs.

One Response to “Akaka, Menendez introduce amendment to Wall Street reform bill”

  1. williamb says:

    This reform bill is just a distraction to keep people from the important issue: Barrack Hussein Obama has not shown a birth certificate and is NOT PRESIDENT! We need less dems and more good Republicans who understand the Constitution and demand Obama show a birth certificate once and for all and the Kenyan usurper in OUR White house can be sent packing. Obama is building is private army. Vote Republican in 2010 if it’s not too late.

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