The Investor Protection Act of 2009 is designed to strengthen the Securities and Exchange Commission's ("SEC") authority to protect investors from the types of abuses that Vernon Healy confronts every day in representing clients who have been victimized by broker-dealer misconduct.
In addition to giving the SEC new regulatory tools and establishing an Investor Advisory Committee to give investors a voice at the SEC, the proposed legislation would make fundamental changes in a system that traditionally has been biased against the investor. Vernon Healy views these changes as being vital to the fair treatment of investors.
First, the new law would make it clear to broker-dealers that they owe a fiduciary duty to their customers to act solely in the customer's best interest, without regard to their own profits. Many of the cases reported on this website are the result of a financial advisor and/or brokerage firm's decision to put their own financial interests first.
Second, the Act would give the SEC the authority to prohibit or limit the mandatory arbitration clauses that brokerage firms now insert in their customer agreements. As Vernon Healy has reported here, the current system penalizes investors by denying them the right to have their cases heard in court. Instead, investors are routinely forced to submit their claims to a panel of arbitrators, one of whom always represents the brokerage industry.
To read the proposed legislation, click here. To help protect investors, write to your representatives in the U.S. House and Senate and encourage them to support the Investor Protection Act of 2009.
