It seems this year we have forgotten about the global financial crisis from 2008. It seems that time does heal all financial wounds and memories begin to fade. The response plan to the financial crisis was created to help mitigate losses and find ways to prevent a crisis like that happening again. According to thehill.com, despite the damage caused by the crisis, financial services jobs are robust as graduating college students are looking to flock towards private equity analyst and investment banker positions.
Five Recent Intrusions On The Rights Of Investors
•Financial Institutions Systemically Important
Over just 10 years, a three-volume set of regulations and rules about bank solvency, stress testing and derivatives trading had been proposed, implemented and now forgotten. Most of the memories forgotten have been about institutions proprietary trading activities, institutions derivatives exposures and banking reserves in the capital adequacy ratios that were designed to help protect institutions against a run.
•Internal Controls
Earlier in 2019, the SEC released a new proposal that would allow many public companies to no longer need outside auditors reviewing their internal financial controls on reporting. This was done because of cited compliance burdens. The requirement is similar to the Sarbanes Oxley Act that was put into play to allow personal policies on financial reporting. For nearly two decades, the elimination of an auditor’s review has significantly lessened investor protections.
•Regulation Best Interest
The SEC discussed for decades how to fix the problem that retail investors have on mis-selling investment products. To fix these issues, the SEC created a simple adjective that would clarify who customers were dealing with and whether they were a conflicted or fiduciary salesperson.
•No-Vote and Corporate Governance Common Shares
In the United States, public markets are now able to complete a shakedown for shareholder rights that were previously championed for generations. Until now, the one-vote, one-share method had been the investors’ rights with public companies. The recent introduction of dual-class shared IPOs has reshaped what good corporate governance should include. Companies are now able to become public entities with little governance and our given preferred voting power goes to the founders instead of the public shareholders.
•Proxy Voting Advice
Recently, the Securities Exchange Commission imposed strict changes to proxy voting and the advice independently given. This was done even with the limited regulatory methods in the unanimous pleas from the proxy advisor clients. This has threatened the investors that use the advice from the proxy firms and the proxy firms themselves.
Dil Bole Oberoi
