Fin Reg: Wall Street Wins Decisively

If you want to know who got the upper hand when it comes to the Financial Reform Bill, follow the money. Bank stocks are currently trading higher and financials are out-performing all other sectors. As Dick Bove, a high-profile analyst that covers Wall Street put it, “I think I would be buying bank stocks this morning.”

That’s because the Financial Reform Bill Washington is touting didn’t protect investors in any substantive way. Congress failed to address the Supreme Court’s “Stoneridge” decision, which would have afforded investors protection against Ponzi Schemes and other large scale frauds commonly aided and abetted by large financial institutions. And don’t let the headlines fool you, Congress totally punted on the requirement that brokers put their clients’ interests ahead of their own - the so-called “fiduciary” standard. Failing to address these two issues is a one-two punch in the gut for investors.

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