Quietly Active

Perhaps it was the recent victory of President Bush that heartened this business-friendly crowd, or maybe it was the tranquil Boca Raton setting, but the annual SIA conference exuded an odd serenity at least until the speakers invoked the name of Eliot Spitzer. Lobbing a remark the New York attorney general's way, incoming SIA president Danny Ludeman said the industry is committed to establishing

Perhaps it was the recent victory of President Bush that heartened this business-friendly crowd, or maybe it was the tranquil Boca Raton setting, but the annual SIA conference exuded an odd serenity — at least until the speakers invoked the name of Eliot Spitzer.

Lobbing a remark the New York attorney general's way, incoming SIA president Danny Ludeman said the industry is “committed to establishing uniform national standards for state regulation…the way we work now is akin to having to get a new drivers' license every time you cross the state line.”

His comments seem to lend support for Congressional proposals that would limit the ability of states' attorneys general, such as Spitzer, to sue securities firms, but it's unclear if Ludeman (who is also head of Wachovia Securities) was addressing those proposals in particular. In a press conference later, SEC Chairman William Donaldson also alluded to Spitzer.

“We do not acknowledge formal investigations,” he said. “I don't mean to criticize Mr. Spitzer, but we don't put out some press release and issue a subpoena.”

Donaldson also said that the SEC has done a number of investigations with Spitzer. Their only area of disagreement was with regard to Spitzer's proposals to regulate fees for certain transactions.

The SIA expects to continue its quest to limit the scope of enforcement and regulation. It also plans to lobby in favor of recent tax cuts on investments and capital gains. According to the SIA's investor survey, 57 percent of investor-respondents said they had either “some” or “a lot” of confidence in the industry's efforts at promoting reform.

“We've taken a hit in public trust and confidence, but our new survey shows clearly we're back on the right track,” says Marc Lackritz, president of the SIA.

In other words, the regulation is for our own good, and it's not going away.

The SEC is expected to rule soon on suits filed against the so-called “Merrill Lynch exemption” that allows b/ds to offer advice without adhering to the 1940 Act governing registered investment advisors. However, at a press conference, the SEC's Donaldson had virtually nothing to say on the topic.

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