Investors Beware

Published: November 6, 2009

Things turned Orwellian in the House Financial Services Committee this week when members — with the backing of the White House — passed an investor protection bill that would make it all too easy for thousands of publicly traded companies to cook their books.

While the bill offers investors important protections — including imposing a fiduciary duty on brokers who give investment advice — an amendment was added to permanently exempt smaller public companies (worth less than $75 million) from a post-Enron auditing requirement. It passed with votes from 28 of the committee’s 29 Republicans (one was absent) and 9 Democrats. All clearly were more interested in pleasing corporate constituents than protecting investors who, last time we checked, are also constituents.