Last Updated May 28, 2010 10:44 AM EDT
I've been pretty critical of my regulator in the past as noted by a recent open letter to Mary Schapiro, the relatively new SEC Chair. Here, I put their sales pitch to the test.
The mission of the U.S. Securities and Exchange Commission is:
To protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.Seemingly they were walking the talk by passing out brochures warning everyone at the money show to be careful with their money.
Clearly, the small investor doesn't stand a chance against the Wall Street firms, insurance companies, scammers, and all of those booths at the money show offering great returns with little risk. We all know regulators failed us miserably over the past few years but, with Mary Schapiro as the new SEC Chair, I thought I'd give it a test.
I walked over, noted I was writing a blog for CBS MoneyWatch, and went through the sales pitch of the company I gave the silver medal to. I stated that the pitch of buying a handful of high risk stocks and triple levered inverse ETFs didn't seem like a way to protect a senior's portfolio and people around him could lose their shirts.
I tried to walk the SEC employee over to the booth, but he declined. His response was to offer me an 800 telephone number to report it. He then became quite defensive - much more so than any other booth I visited and questioned.
I shared this story with a few people around me who responded that the guy I was talking to was likely a low level employee paid to pass out pamphlets, and I just made the guy defensive. Well his business card read "Attorney - Division of Enforcement." An SEC attorney whose job was to "protect investors" felt enforcement meant passing out nice brochures to the thousands of investors who were being mislead.
The reality is that it's hard to change a culture of a large organization, yet the response from this one SEC attorney isn't particularly encouraging. In fact, to me, the SEC's presence at this show gives a false legitimacy to all those pushing their "can't lose" products.
So, I'm very sad to say, our Securities and Exchange Commission handily wins the gold medal award for the best investment sales pitch I'm not buying. Someday, for investors' sake, I hope they are no longer in the medal count.
MORE ON MONEYWATCH
SEC's Chair Mary Schapiro Cozy with Wall Street? An Open Letter
Best Investment Sales Pitches I'm Not Buying: Silver Medal
Best Investment Sales Pitches I'm Not Buying: Bronze Medal