INVESTOR ADVOCATES QUESTION APPOINTMENT OF FORMER SECURITIES INDUSTRY COLLEAGUE OF SEC CHIEF TO HEAD $52 MILLION COURT ORDERED SEC “INVESTOR EDUCATION” EFFORT
Norman, Oklahoma – April 1, 2004 – The following statement was issued today by Charles W. Austin, Jr., president of the Public Investors Arbitration Bar Association (PIABA), in response to reports that the Securities and Exchange Commission (SEC) has appointed Charles Ellis, the head of a consulting firm to the financial services industry and a former securities industry colleague of SEC Chairman William Donaldson, to oversee the utilization and distribution of $52.5 million earmarked for “investor education:”
“The fact that a lifetime member of the financial services industry and a former industry colleague of the SEC’s chairman was appointed to oversee efforts to educate the investing public is very troubling. Even as calls for corporate transparency continue to emanate from regulators and the public alike, the very agency charged with protecting the public investor chose to shield its selection process from public view.
Past SEC investor education efforts have been ineffective, at best, which may explain why the investing public continues to be victimized by the systemic fraud and abuse of Wall Street. As the result of this latest scandal, the SEC has been given yet another opportunity and an unprecedented level of funding to get it right.
It does not appear that the Commission is getting off on the right foot here. According to published reports, in designing and implementing the SEC’s investor education efforts, Mr. Ellis intends to rely on the advice of members and representatives of the very firms and industry responsible for victimizing investors in this most recent scandal – the latest in a long line of Wall Street scandals dating back to the junk bond fiasco of the 1980s.
PIABA believes that the sub rosa nature of the process which resulted in Mr. Ellis’ appointment and Mr. Ellis’ expressed intent to rely upon the advice of the securities industry in implementing the SEC’s investor education effort are sure signs that the SEC still doesn’t grasp its obligation to the investing public and that its public expressions of concern for an educated investing public are largely disingenuous.
In short, it appears that the SEC is intent not only on allowing ‘the fox to guard the henhouse,’ but on asking that it build the henhouse as well.”
PIABA is a national, non-profit bar association of over 750 members dedicated to the representation of investors in disputes with the securities industry. Questions about this release may be directed to Charles W . Austin, Jr. at 804-379-3590.