PA Securities Commission (PSC) Urges Equal Protection from Predatory Practices for Individual and 'Sophisticated' Investors

HARRISBURG, Pa., May 12 /PRNewswire-USNewswire/ -- The Pennsylvania Securities Commission (PSC) today urged Pennsylvania's two U.S. Senators to support a proposed "Honest Broker" amendment to financial reform legislation now under consideration, calling it "the single most significant wide-ranging protection that can be enacted for the protection of investors."

In letters sent today to Sens. Robert P. Casey, Jr., and Arlen Specter, emphasized that support for the amendment sponsored by Sens. Daniel Akaka of Hawaii, Robert Menendez of New Jersey and Richard Durbin of Illinois would be a "necessary first step in providing much needed authority to curb abuses and protect investors in Pennsylvania and throughout the nation."

Signed by Robert Lam, acting chairman, and commissioners Thomas Michlovic and Steven Irwin, the letter said the need for the amendment was made evident by hearings involving Goldman Sachs which "showed how that firm repeatedly put its own interests and profits ahead of the interests of its clients."

The commissioners noted that hearing testimony showed not only a need for such protections for small investors but "also demonstrated that institutional investors, pension plans, mutual and money market funds, school boards and municipalities now considered to be 'too sophisticated' are also in need of increased protection that would be afforded by the imposition of a fiduciary standard."

In urging support of the requirement that brokers and securities salesmen only recommend transactions that are in the best financial interests of their customers, the commissioners concluded that all investors "must be given the assurance that whether investing directly in the market or indirectly through pensions and investment vehicles, or as taxpayers, they are not subject to a rule of [let the buyer beware] in which the more knowledgeable have a right to prey on the less knowledgeable even where the less knowledgeable may be characterized as 'sophisticated.'"

Concerned citizens may contact the Pennsylvania Securities Commission, toll-free, at 1-800-600-0007, during normal business hours or on the web at www.psc.state.pa.us.

SOURCE Pennsylvania Securities Commission