A FEDERAL COURT HAS RULED AGAINST AN OBAMA ERA REGULATION
THAT WOULD ESSENTIALLY KEEP A CLOSE EYE ON FINANCIAL ANALYSTS
AND ENSURE THAT THEY SELL PRODUCTS THAT KEEP THE BEST
INTERESTS OF THE CONSUMER IN MIND.
THESE ARE NONFIDUCIARIES,
INDIVIDUALS WHO DO NOT HAVE ANY PARTICULAR CREDENTIALS TO BE
SELLING THESE PRODUCTS, BUT THEY ARE SALESPEOPLE WHO HAVE TITLES
SUCH AS FINANCIAL ANALYST, FINANCIAL ADVISOR, FINANCIAL
CONSULTANT, FINANCIAL PLANNER, INVESTMENT CONSULTANT, AND THEY
PREVIOUSLY, PRIOR TO THESE OBAMA ERA REGULATIONS, HAD NO
OBLIGATION, NO LEGAL OBLIGATION, TO SELL YOU PRODUCTS WITH YOUR
BEST INTERESTS IN MIND.
IN FACT OFTEN TIMES THEY WOULD SELL
RETIREMENT PRODUCTS TO CONSUMERS THAT WOULD NOT HELP THEM, BUT
WOULD GIVE THEM COMMISSION AND ALSO GIVE THEM OTHER FINANCIAL
INCENTIVES TO SELL THOSE PRODUCTS.
NOW IN 2016 OBAMA'S
ADMINISTRATION DID IMPLEMENT SOME REGULATIONS TO ENSURE THAT
THESE INDIVIDUALS WORKED IN YOUR BEST INTERESTS, AND TODAY, I'M
SORRY, YESTERDAY, A FEDERAL COURT DECIDED TO RULE AGAINST
THOSE REGULATIONS.
NOW LET ME GIVE YOU THOSE DETAILS --
I JUST WANT TO PAUSE, ANA, BECAUSE I THINK THAT IS SO
IMPORTANT.
THAT GOES TO THE HEART OF NOT JUST THIS CASE AND
THIS ISSUE BUT THE HEART OF THE PROBLEM IN OUR GOVERNMENT.
IT
WAS TWO JUDGES APPOINTED BY REPUBLICANS, AND HENCE THE
CORRUPTING OF THE JUDICIARY.
IT'S NOT THAT REPUBLICANS CAN'T
APPOINT JUDGES, OF COURSE THEY CAN, BUT THEY ARE SELECTING
JUDGES THAT ARE ONLY PRO-CORPORATE.
IN FACT NEIL
GORSUCH GOT THE SUPREME COURT NOMINATION BECAUSE HE WAS THE
ONLY JUDGE IN THE COUNTRY THAT RULED THAT A CORPORATION HAS THE
RIGHT TO ORDER ONE OF THEIR WORKERS TO FREEZE TO DEATH, AND
THEN FIRE HIM IF HE DISREGARDS THAT ORDER.
THAT'S AN AMAZING
RULING.
EVERY OTHER JUDGE WHO LOOKED AT THAT CASE SAID NO, BUT
THAT WAS GORSUCH'S WAY OF SAYING I WILL DO ANYTHING FOR
MULTINATIONAL CORPORATIONS AND THAT GAVE HIM THE SUPREME COURT
SEAT.
SO WE PRESELECTED JUDGES TO MAKE RULINGS LIKE THIS.
SO
THEY RULED IT IS UNREASONABLE TO EXPECT THAT A FINANCIAL ADVISOR
WOULD HAVE YOUR BEST INTERESTS IN MIND.
THE REASONABLE POSITION
WOULD BE FOR THEM TO ROB YOU BLIND.
SO FOR THEM TO CARE ABOUT
YOU, THEIR CUSTOMER OR THEIR CLIENT, AND FOR THE GOVERNMENT
TO PROTECT THE CITIZENS, IS TOTALLY UNREASONABLE.
AND THAT
IS THE CORPORATE POSITION, IT'S UNREASONABLE FOR US TO SACRIFICE
EVEN A PENNY OF OUR PROFITS TO LOOK OUT FOR OUR CUSTOMERS
OR CLIENTS.
LET'S HEAR FROM THE JUDGES WHO RULED AGAINST THE REGULATIONS,
ONE OF THEM WAS JUDGE EDITH JONES, WHO WAS NOMINATED BY
RONALD REAGAN, HERE IS WHAT JUDGE JONES HAD TO SAY --
I DON'T EVEN UNDERSTAND THAT ATTEMPT AT LOGIC BECAUSE THERE
WAS NO LOGIC THERE.
THESE ARE PEOPLE WHO PREVIOUSLY, PRIOR TO
THESE REGULATIONS, DIDN'T HAVE TO DISCLOSE CONFLICT OF INTEREST
WHEN SELLING CERTAIN RETIREMENT PRODUCTS, AND PUSHING FOR
CERTAIN INVESTMENTS, WHICH BY THE WAY IN A LOT OF CASES THESE
INVESTMENTS WOULD WORK AGAINST THEIR CLIENT, IT WOULD ACTUALLY
DECREASE THE AMOUNT OF MONEY THEY WOULD HAVE IN THE LONG RUN
FOR THEIR RETIREMENT, BUT THEY DIDN'T HAVE TO DISCLOSE THE
CONFLICTS OF INTEREST OR THE INCENTIVES THEY WERE GIVEN TO
SELL THOSE TERRIBLE PRODUCTS TO THESE CONSUMERS.
AND ALSO THEY
WOULD CHARGE FEES, AND THE REGULATION ESSENTIALLY TOOK CARE
OF, OR PREVENTED THEM, FROM CHARGING CERTAIN FEES THAT AGAIN
IN THE LONG RUN WOULD AMOUNT TO A CONSIDERABLE AMOUNT, THAT YOU
WOULDN'T BE ABLE TO RETIRE WITH AS MUCH AS YOU COULD HAD YOU
KNOWN WHAT WAS AT PLAY BEHIND THE SCENES.
SO IT WAS PROVIDING
OVERSIGHT, BUT MORE IMPORTANTLY IT WAS PROVIDING INFORMATION TO
THE CONSUMER SO YOU KNEW WHAT CONFLICTS OF INTEREST WERE AT
PLAY AND THE TYPES OF FEES YOU WERE BEING CHARGED.
SO THIS IS CRAZY.
I KEEP THINKING THE WHOLE POINT OF GOVERNMENT IS TO
PROTECT PEOPLE FROM THE DUPLICITOUS -- THIS ISN'T JUST
DUPLICITOUS, IT'S CRIMINAL, IT'S THE POTENTIAL TO SORT OF GRIFT
--
BUT EVEN IF IT'S JUST DUPLICITOUS --
MY PARENTS WERE BOTH DOCTORS, IF A DOCTOR COULD BE LIKE I'M
GOING TO GIVE YOU SOMETHING THAT MIGHT KILL YOU AND NOT TELL YOU
THAT IF IT WILL MAKE THE PHARMACEUTICAL COMPANY A LOT OF
PROFIT -- WELL, THAT'S KIND OF HAPPENING.
WE USED TO HAVE A LOT OF LAWS PERTAINING TO CONSUMERS, LIKE A
LEMON LAW, A CAR SALESMAN COULDN'T SELL YOU A CAR THAT HE
KNEW DIDN'T FUNCTION.
AND THAT'S JUST A CAR.
BUT YOU COULD LOSE
YOUR WHOLE SAVINGS AND CORPORATE JUDGES VIEW IT AS WHOLLY
UNREASONABLE TO EXPECT THAT THEY TELL YOU THE TRUTH ABOUT IT.
ONE
OF THE THINGS THEY DO THAT ANA WAS REFERRING TO IS EXCESSIVE
TRADING, THEY TAKE COMMISSION ON EACH TRADE, FOREIGN SAMPLE, AND
EVERY TIME YOU LOSE THAT MONEY AND THEY GAIN THAT MONEY.
SO
THEY HAVE RIGGED THAT SYSTEM SO THAT AT THE END OF THE DAY,
THANK YOU FOR INVESTING FOR US, WE NOW HAVE YOUR MONEY AND YOU
DON'T.
NOT THE WHOLE PRINCIPAL, A OBVIOUSLY, BUT IT'S A WAY OF
MILKING YOU FOR THEIR PROFIT WITHOUT TELLING YOU.
AND IF WE
CAN HAVE A LEMON LAW ABOUT CARS YOU CAN CERTAINLY HAVE IT ABOUT
YOUR RETIREMENT ACCOUNTS AND YOUR ENTIRE SAVINGS ACCOUNTS.
THING ABOUT WHO THEY PREY ON.
THEY PREY ON RETIREES.
THAT'S ABSOLUTELY RIGHT.
THE PEOPLE WHO ARE MOST VULNERABLE, IN SOME CASES MOST
GULLIBLE BECAUSE THEY AREN'T AS COMFORTABLE WITH THESE THINGS,
I'M GENERALIZING BUT THAT'S TRUE, ONE THING TO POINT OUT,
ANA, BEFORE YOU GO ON, IS THIS IS THE FIFTH CIRCUIT, IT'S A 2-1
DECISION, EARLIER THIS WEEK THEY GAVE ANOTHER 2-1 DECISION IN
FAVOR OF TEXAS AGAINST SANCTUARY CITIES.
SO YOU AREN'T IN THE
NINTH DISTRICT ANYMORE, YOU AREN'T IN THIS FAVORABLE COURT,
BUT THESE ARE BOTH 2-1 DECISIONS.
IN THE SANCTUARY
CITIES CASE IN TEXAS THEY WILL APPEAL FOR A HEARING WITH ALL
SEVEN MEMBERS, OR NINE MEMBERS, OF AN APPEALS COURT AND THEY
PROBABLY WILL WANT TO DO THAT IN THIS CASE AS WELL BECAUSE THIS
IS WHAT YOU HAVE WITH THE CIRCUIT APPEALS COURTS, WHEN
THEY KNOW THEY CAN GET A GOOD DECISION THEY GET A SMALLER
NUMBER, THEY GO TO A 2-1.
TWO THINGS I WANT TO POINT OUT, ONE IN REGARD TO WHAT CENK
MENTIONED, THE CONSTANT TRADING IS SOME THING THAT IS PUSHED
TOWARDS CONSUMERS, THEY ARE REFERRED TO AS ACTIVE MANAGEMENT
OR ACTIVE FUNDS OR ANNUITIES, AND THE WHOLE POINT IS SO THEY
DO CONSTANT TRADING, AND AGAIN THAT'S WHEN THE INDIVIDUALS
DOING THE TRAINING ON YOUR BEHALF MAKE MONEY BUT IT DOESN'T
NECESSARILY WORK TOWARD YOUR BEST INTERESTS, OR IN YOUR BEST
INTERESTS, BECAUSE YOU WILL LIKELY LOSE MONEY WHEN THERE IS
THAT MUCH ACTIVITY GOING ON.
TO YOUR POINT, MICHAEL, SOMETHING
INTERESTING DID HAPPEN.
NOW EVEN THOUGH THIS COURT RULED AGAINST
THE REGULATIONS, ANOTHER CIRCUIT COURT ALSO MADE A DECISION ON
THIS REGULATION THAT WAS COMPLETELY DIFFERENT, SO THIS IS
LIKELY TO GO TO THE SUPREME COURT, WHICH ISN'T NECESSARILY
GOOD NEWS CONSIDERING WE HAVE A CONSERVATIVE SUPREME COURT
CURRENTLY.
ANOTHER CIRCUIT COURT DECISION HAS TAKEN AN OPPOSITE
TRACK, MEANING THE CONTINUING FIGHT COULD BE HEADED TO THE
SUPREME COURT.
ANOTHER PIECE OF INFO YOU SHOULD KNOW IS THAT THE
SEC IS TRYING TO DRAFT ITS OWN VERSION OF REGULATION IN
RESPONSE TO THIS --
OBVIOUSLY WE DON'T HAVE A VERSION OF THAT REGULATION AT
THE MOMENT, BUT WE'LL SEE HOW THAT TURNS OUT.
IN FULL DISCLOSURE, EDITH JONES, THE JUDGE, NO RELATION.
SO YOU DIDN'T HAVE TO RECUSE YOURSELF.
BECAUSE WE TAKE OUR
ETHICAL RESPONSIBILITIES VERY SERIOUSLY.
ONE LAST THING, THOSE
WORDS SHE USED, EDITH JONES USED, REALLY STRUCK ME.
AND
AGAIN IT GOES TO THE HEART OF WHAT IS WRONG WITH THE SYSTEM.
SHE DEEMED THE ATTEMPT TO PROTECT CONSUMERS AS ARBITRARY
AND CAPRICIOUS.
LIKE, ALMOST A SLAP IN THE FACE, SAYING HOW
DARE YOU TRY TO STAND UP FOR THE CITIZENS?
NO, THE CORPORATIONS
RULE US ALL AND THEY CAN DO ANYTHING THEY LIKE, THEY CAN
TRICK YOU, TAKE YOUR MONEY, LIE TO YOU, AND THERE IS NOTHING YOU
CAN DO ABOUT IT, AND IF THE GOVERNMENT TRIES TO STAND UP FOR
YOU, IN THE RARE CASE IT TRIES TO STAND UP FOR YOU, WE WILL
DEEM IT ARBITRARY AND CAPRICIOUS.
HOW DARE THEY?