We commend New York State Attorney General Eliot Spitzer’s work in protecting investors.  It took courage to oppose the SEC’s “business as usual” approach to the corporate scandals that have hurt our economy.  Mr. Spitzer has thus far successfully pursued a complex securities fraud investigation without the benefit of the SEC’s larger and specialized enforcement resources.  However, we believe that the proposed settlement fails to address the real issues affecting the fairness of America’s capital markets.  

We believe that the following are essential elements in any plan to improve the freedom and fairness of U.S. capital markets: 1.) decentralize the SEC’s Enforcement authority away from its politically-appointed, Washington, D.C. based Commissioners to the Chief Enforcement Officer at its local branches; 2.) eliminate the regulatory bias against investors who oppose Wall Street’s unreasonable stock schemes (these include the up-tick restrictions, the stock borrowing requirement and the exclusion of short sellers from the protections granted to other investors under the anti-fraud provisions of securities laws); and 3.) establish listing requirements that prevent public companies from filing frivolous lawsuits against analysts, media or other public commentators who criticize its management or have opposing opinions concerning the value of its publicly traded securities.   

We believe that a primary cause of America’s current economic difficulties is the misallocation of America’s hard-earned savings through improper sales practices.  We oppose any settlement that does not contain provisions addressing these key items, which are essential to the health of America’s free enterprise capitalist system.