by: Dan Martin (c)copyright 2010

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Fiduciary, schmiduciary – let ‘em eat cake.

During the Senate hearings yesterday (April 27, 2010), this was said:

“A Republican member, Senator Susan M. Collins of Maine, turned from one witness to the next as she asked repeatedly whether they felt a duty to act in the best interest of their clients. Only one of the four witnesses she questioned seemed to affirm such a duty outright.” (NY Times)

WHAT! In the six plus years I was employed as a registered representative of an investment firm, the surest way to be summarily fired was to forget our fiduciary responsibility to our clients.

Remember, I bring only sandbox economics to this discussion. I have no wallpaper beyond my Insurance Agent License and my Registered Representative Licensure. I am not aware if the rules are different for investment banks, but I doubt it.

Common sense tells us that a market that condones deceit and rewards greed is bound to fail eventually, and the people who “made that market” (not unlike a Ponzi Scheme) will not be the ones who pay the price for that failure.

The posture adopted by the Goldman Sachs executives in the hearing is no mystery. Anything they say can be used against them in later proceedings; they do not want to go to prison.

Although we can never recover the immense wealth that has been lost, particularly in our retirement funds, they should be made to pay, nonetheless. Those responsible for the actions leading to this collapse should be facing incarceration in Danville if not, more appropriately, Leavenworth.

If I had chosen for an instant to ignore the best interests of my clients, that is from where I would be writing this.