Eliot Spitzer Sex Scandal
Ah, memories. Not that I know Eliot Spitzer or anything really about sex scandals or about call girls. I do know that this is what staffers are for! Hello? Using your own phone and voice to call about illegal activities? I’m guessing most of our politicians are a little smarter than this.
No, the memories are from those years when Spitzer was AG of New York instead of Governor. Back then, Mr. Spitzer did what the SEC either couldn’t or didn’t have the political backing to do which was take on some of the shiftier practices of some mutual fund companies. Of course, after the good guys finished cleaning up, that was time for the sleazy lawyers to show up and cash in at the copy-cat lawsuit trough. Pretty much every single mutual fund company ended up getting sued and settling to avoid the big costs and negative publicity of fighting even if they weren’t really involved in any of the shady stuff. The result? The big trial lawyers got richer, the mutual fund companies added two paragraphs to their disclosures, and the customer? Well, let’s just say Mr. and Mrs. Main Street got the equivalent of buy one get one free coffee at the Waffle House. Yeah!
The real cost was born by guys like me who had to explain to pretty much all of our clients what late trading was. Finally, I had to type up my own (non-approved like anything worthwhile) sheet to give to clients so that they not only understood what I was saying, but so that they also could go look up the information for themselves. The truth is that late trading and the non-disclosure things don’t sound like a big deal, though they can be very detrimental to shareholders depending on how they go down. But, when the front page screams WALL STREET SCANDAL from the headline, people expect something a little worse. So, they thought I might be holding something back. I’m a good guy, but every once and a while, you have to prove it.
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