Financial firms like TD Ameritrade Fidelity, and New York Mellon Corporation, among many others, have been operating under the guise of being a fiduciary, but have instead been taking advantage of retirement investors. They are making a killing off of investors by knowingly pushing them into bad 401k investments peppered with ridiculous fees.
In recent years, regulatory groups have taken notice of the egregious and unethical behavior of these Wall Street brokers who hammer investors with tons of fees and use CDOs (which are designed to ensure payouts to investors) to clip pieces of a customer’s 401k. Towards the end of 2012, the U.S. Department of Labor started to push regulations that would force the firms to inform workers what they were charging for their services. But the Wall Street brokers and opponents of bank regulation sought to block the proposed regulations.
Over 75 businesspeople went to Capitol Hill last week to lobby against rules that would protect investors from shady bank deals and crooked bankers that could damage their best interests. By convincing older investors to put their money into certain funds that are “like CDs,” brokers are able to use these risky investments to further line their own pockets.
While on the Hill, the brokers actually requested to be no longer known as a fiduciary. “In other words, they want total immunity from civil responsibility and criminal responsibility when they intentionally place your 401k money in investments that they clearly know will lose money for you and make big investment fees for them,” said Ring of Fire host Mike Papantonio.
The companies want to shirk their responsibility of providing sound financial advice in favor of profits and personal gain. These scammers have the freedom to take the money given to them, and move it around into whatever shoddy investment they want with impunity. To them, it makes no difference as long as they get a cut.
Joshua de Leon is a writer and researcher with Ring of Fire.