The New York Times ran this prescient editorial in yesterday’s paper. Here’s an excerpt:
Another day, another test of Congress’s will to reform the financial system.
The Investor Protection Act of 2009, which faces final votes on Wednesday in the House Financial Services Committee, would make much-needed changes to protect individual investors from fraud and manipulation.
It imposes a fiduciary standard on brokers who offer investment advice, requiring them to act in their clients’ best interest. It also requires enhanced disclosure by brokers, financial planners and investment advisers of their obligations to their clients and calls for more financing for the Securities and Exchange Commission.
There was a long time when even those common-sense requirements couldn’t make it past the industry’s lobbyists. In the wake of the financial crisis, few members of the committee are likely to vote against them.
The fight instead is over whether the bill should be amended to block the imposition of a post-Enron auditing requirement on small publicly traded companies…
If Congress and the White House won’t get tough on accounting fraud at small public companies, how likely are they to take on tougher issues — and more powerful constituencies — when it comes to controlling the multitrillion-dollar derivatives market or downsizing too-big-to-fail firms? The committee should defeat these amendments and pass the Investor Protection Act.