Companies that provide investment advice have been vigorously fighting a proposed Department of Labor rule that would formally require investment advisors for retirement plans to operate in the best interest of their clients — instead of ripping them off with products that earn them bigger profits.
Investment advisors have claimed this would be disastrous for their businesses and would leave retail investors with no assistance in navigating the financial markets.
But behind the scenes, in earnings calls with their own shareholders, these same companies are downplaying the impact of the rule, reassuring that they could easily handle the changes.
This contradiction was revealed in a letter from Senator Elizabeth Warren and Congressman Elijah Cummings made public Thursday. The letter highlights four companies with investment advisory units, contrasting their public and private statements, and implicitly raising the question: Are they lying to the Department of Labor, or to their shareholders?
For example, in a letter to the Labor Department last July, Jackson National Life Insurance Company president James Sopha called the proposal “bad for investors and for America,” and said that “it will be very difficult, if not impossible for financial professionals and firms to comply with the requirements.”
The Congressional Black Caucus PAC announced its endorsement of Hillary Clinton’s presidential campaign on Thursday, a move that is being widely interpreted as a sign of her deep support from the African American community. As they made their announcement, CBC PAC officials downplayed Bernie Sanders’s proposals for poverty reduction and tuition-free college as unrealistic, while touting Clinton as a bold leader.
Some of the members who spoke at the event, held at the Democratic National Committee headquarters, anticipated the same kind of criticism that the Sanders campaign has made of some other Washington-based leadership groups that have endorsed Clinton. “We are not from the establishment, we are from the streets,” said Rep. Gregory Meeks, D-N.Y.
But the Congressional Black Caucus PAC is not the same thing as the Congressional Black Caucus, which is made up of 46 members of Congress. Indeed, Rep. Keith Ellison, D-Minn., a Sanders supporter, made that point on Twitter:
Ellison then said in another tweet that “endorsements should be the product of a fair open process. Didn’t happen.”
Ben Branch, the executive director of the Congressional Black Caucus PAC told The Intercept that his group made the decision after a vote from its 20-member board. The board includes 11 lobbyists, seven elected officials, and two officials who work for the PAC. Branch confirmed that the lobbyists were involved in the endorsement, but would not go into detail about the process.
Bill Black reviews the highlights and holes of the film The Big Short in 2 parts on The Real News. You can view part 1 here and part 2 is here. Both have transcripts.
“Any request for loan level tapes is TOTALLY UNREASONABLE!!! Most investors don’t have it and can’t provide it. [W]e MUST produce a credit estimate. It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.” [S&P 2001] [emphasis in original]
Source: New Economic Perspectives
Randy Wray and Bill Black appear on “Clearing the Fog.” You can listen to the podcast here. Bill, of the newly formed Bank Whistleblowers United, speaks about the plan they have outlined to instill the rule of law on Wall Street and end fraud with the hope of mitigating the effects of the next financial crisis. Randy, an expert in financial instability and macroeconomics, speaks about alternatives to the current financial system that would bring greater stability.
Source: New Economic Perspectives
I am writing as one of the four founding members of Bank Whistleblowers United. We came together recently to create a detailed plan that could restore the rule of law to Wall Street and dramatically reduce the risk and damage of future financial crises. We crafted it so that it could be implemented without any new legislation or regulation. We offered our aid in the implementation process to any candidate who wins the election — and pointed out that President Obama could implement it immediately. Our plan and approach virtually defines the word “pragmatic.” It would also transform finance and begin to end its corrupt culture.
In response to Bernie’s big election win in New Hampshire, a political scientist rushed out a piece in the New York Times advising Hillary how to do a PR makeover. His advice was “peddling pragmatism,” by which he meant the opposite — an effort to rebrand Hillary through slogans. The political scientist does, however, understand Hillary’s key liability — the one that Krugman was foolish enough to think was an asset — “she often sounds as if she were acquiescing to a status quo that Democrats find objectionable.” Actually, she is acquiescing to a status quo that is objectively far beyond “objectionable.” It isn’t simply Democrats that find it unacceptable for a pervasively corrupt Wall Street to maintain its destructive power over our economy and our democracy, that view is shared by the vast majority of Republicans and independents.
Hillary does not “sound as if” she is “acquiescing” to Wall Street’s stranglehold. Hillary’s most prominent economics supporter, Krugman, urged us to vote for her because Hillary will not seek to break Wall Street’s corrupt power. Paul Krugman, in an article meant to attack Bernie Sanders, accidentally misfired and shot Hillary Clinton when he admitted that Dodd-Frank did not even try “breaking [Wall Street’s] power” over our economy and democracy — and praised that failure. Hillary’s fundamental problem is that, after an adult lifetime in which she and Bill formed a mutual support society with Wall Street, few find her claims to a Road to Damascus conversion credible. In the last debate, when trying to demonstrate how tough she was on Wall Street the best she could muster was to call the elite bankers’ frauds that caused the Great Recession “shenanigans” — childish pranks.
A transparency group in California on Tuesday announced it had collected 40,000 signatures to place an initiative on the ballot that would require state representatives to wear the names of their top sponsors while on the floor of the Statehouse.
The initiative, called “California Is Not For Sale,” was created in part to curb the influence of money in politics, and has been compared to NASCAR drivers displaying company logos on their shirts. It is backed by California attorney and businessman John Cox, who committed $1 million to the effort. It will need 365,000 valid signatures in order to qualify for the ballot in November, and organizers are confident they can muster enough support.
“The idea was conceived during a protest that was being staged for a separate ballot initiative in which we had all of the cutouts of California politicians covered in logos,” Ryan Smith, a coordinator for the initiative, told The Huffington Post on Tuesday. “Everyone who saw it said, ‘You have to actually do this.'”
Law360, New York (February 11, 2016, 1:46 PM ET) — A California appellate court on Wednesday upheld a $5.6 million class action settlement between Wells Fargo Bank NA and mortgage borrowers who accused the bank of secretly recording customer service phone calls, rejecting objectors’ claims that nearly $2 million in attorneys’ fees included in the deal were too high.
The five objectors said that the approval process for the fees was too opaque and the fees were unreasonable, but the court of appeals in Los Angeles County said that simply was not the case, finding that…