Thursday, February 11, 2016

Senator Warren exposed big bank lies, again

See this article. The Department of Labor has proposed a rule that would require investment advisers to advise clients in the latter's best interest. That we even need such a rule, and that right now said advisers don't have to do this, is astounding in itself. This lack of a basic ethical rule is part of why so many investors lost so much in the financial crisis, given that advisers knew damned well they were selling junk mortgage bonds, reaping a giant profit for themselves, and screwing clients when those bonds failed.

That said, the investment lobby is fighting this rule tooth and nail, saying its unfeasible and would cost a lot of money. And yet Warren has obtained information on what these investment firms are telling their shareholders, which is that it's not big deal and they can handle it. In other words, they're lying to the Labor Department because they think lying to their clients for their own benefit should continue to be legal. As Sanders said, Wall Streets model is fraud and this is yet further proof.

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