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Survey: Americans Want Wall Street Held Accountable

Posted by Larry Doyle on January 22, 2010 12:42 PM |

America is pissed off. Tremendous grasp of the obvious, right? Well just how pissed off is America?

Thank you to a new friend of Sense on Cents for sharing a recent survey taken by the Opinion Research Corporation addressing America’s general lack of trust with Wall Street and corporate officers.

Pretty sorry state of affairs when a large percentage of America thinks our financial and corporate executives are a pack of liars. No surprise that America wants greater protection from this deception and deceit.

Keep coming to Sense on Cents to get armed and protected as we collectively navigate the economic landscape. On that note, let’s look deeper at what America is saying:

MOST AMERICANS SUPPORT HOLDING WALL STREET AND CORPORATE WRONGDOERS MORE ACCOUNTABLE TO INVESTORS BY BOLSTERING INVESTORS’ LEGAL RIGHTS, AN OPINION RESEARCH CORPORATION SURVEY FINDS.

Public Believes Wall Street Executives were Dishonest during Financial Meltdown and that Corporate Officers do not Provide Accurate Information in Financial Statements

WASHINGTON, DC, JANUARY 21 — Sixty-two percent of Americans believe Wall Street executives were not honest with the public during the recent financial meltdown and 59 percent of Americans do not believe corporate CEOs and financial officers provide accurate information in financial statements.  And, most Americans favor additional legal rights for investors that would allow them to seek compensation for loss from any deceptive conduct by Wall Street or corporate officers — even if it did not involve a public misstatement.

These are among the findings of a national Opinion Research Corporation (ORC) survey of public attitudes toward financial fraud and investor protection.  The telephone survey, conducted December 10-13, and sponsored by the National Association of Shareholder and Consumer Attorneys (NASCAT), also found that nearly all Americans feel that those who commit fraud should be held accountable to investors who lose money as a result of the fraudulent behavior.  Similarly, nearly all Americans think that those who engage in fraud but do not admit it publicly should still be held accountable to investors.

“The survey findings reveal that the public is very aware that financial and corporate officers have been engaged in conduct that is not just reckless, but that has been deceptive and dishonest before and during the financial meltdown,” explained Ira Schochet, Esq., NASCAT’s president.  “Americans understand that Congress and the Administration must substantially increase accountability in our financial markets in order to protect investors and reduce the likelihood of another systemic crisis.”

As reported by Opinion Research Corporation, some of the key findings are explained below:

— ORC explained to survey respondents that the law allows investors to seek compensation from executives who knowingly make misrepresentations to the public.  They were then asked if there was a need for additional legal rights that allow investors to sue for compensation from executives who knowingly engage in any form of deceptive conduct, even if it does not involve a public misstatement.  Three-fourths (74%) agree that investors should have these additional rights   One-in-five (21%) do not.

— Practically every respondent (94%) feels that those who commit fraud should be held accountable to investors who lose money as a result of those fraudulent actions. Only 5% do not think they should be held accountable.

— Support is also strong for keeping executives accountable to investors when they   perpetrate financial fraud even if they do not publicly admit their wrong doing.  Nine-in-ten (90%) support this idea with only 7% saying no.

— Ninety percent of Americans believe people who participate in financial fraud – such as knowingly engaging in a sham transaction or telling others how to prepare fake financial statements or otherwise deceive investors – should be held accountable to investors.  Only 7 percent oppose, while 2 percent had no opinion.

— And, respondents were asked about the current ability of corporate managers to avoid accountability to shareholders by limiting disclosure of a wrong doing.  When asked, only a quarter (25%) agree that this should happen while 73% disagree.

Findings Support Congressional Action on Anti-Investor Court Decisions

“These findings show overwhelming public support for Congress to restore liability to investors for those who aid and abet fraud and those who can currently escape liability by manipulating public disclosures,” NASCAT’s Ira Schochet continued.  “Congress can accomplish these goals by rolling back two radical Supreme Court decisions (Central Bank in 1994 and Stoneridge in 2008), which eliminated private liability for aiding and abetting securities fraud; and,  clarifying another Court decision (Dura in 2005), which inadvertently empowered some conservative lower courts to throw out valid investor fraud claims whenever sophisticated executives and their professional advisers disguise the impact of wrongdoing by manipulating the timing and content of news releases.”

Investor Demographics and Survey Methodology

About half of American adults own stock and half do not.  A typical owner is older, wealthier and better educated than someone who does not own stock.  Stock owners are just as likely to have the investment as a result of an employer plan as to own it on their own without any employer involvement.

These findings are from a telephone survey conducted of 1,017 adults comprising 509 men and 508 women.  Interviewing for this survey was completed during the period December 10-13, 2009.  The results have a margin of error of plus or minus three percentage points among the total sample.  Opinion Research Corporation, based in Princeton, NJ, conducted the fieldwork.

The National Association of Shareholder and Consumer Law Attorneys is a nonprofit organization comprised of about 100 law firms representing consumers and investors – including pension funds and individuals – in cases of securities fraud and other forms of “white collar” wrongdoing and criminal activity.

I regularly address a wide array of issues which will help you more fully understand developments on Wall Street, in Washington, and our global financial landscape.  I can’t change the behaviors of these executives, but I welcome highlighting them.

LD

  • Mark

    Although this survey may be current, do you truly think these sorts of shenanigans have not been going on for ages.

    Only when the rug gets pulled do you really see all the dirt. ..and then Uncle Sam comes along and tries to cover it all up.

    All the dirt is still there.

  • Bill

    A good first step would be to outlaw adhesion contracts requiring binding arbitration in brokerage contracts. Barring that, arbitration should be administered by a reputable authority, which by definition would be someone other than FINRA. Also, arbitration discovery rules should be modified such that investors seeking arbitration are not subjected to a financial autopsy.

  • TML

    Why haven’t Jimmy Cayne, Dick Fuld, Stan O’Neal, Angelo Mozilo, Chuck Prince and others faced the music. Did they sign off on fictitious quarterly earnings reports? Did they withhold information? Were these guys merely arrogant, incompetent, and stupid or something more than that.

    These guys should be forced to take the stand.

    Oh sorry, I forgot the AIG dope, Joe Cassano.

    Is our government so incapable of formatting a case against this crowd or will the case reflect the fact that Uncle Sam greased the skids for these guys.

  • Carol

    The first step in holding these crooks accountable is to take all your cards off the table. I’ve closed every single account I have — my IRAs, etc. Yes, I’ve paid the taxes I deferred. So what? Tax rates will have to go up to pay for the bank bailout, so who knows what I would have been paying had I held the accounts until retirement. I’m also reading stories that say that we will be forced to put our funds into Treasuries/annuities. I’m out of that mess, away from the crooks.

    If they won’t play fair, I’m not playing. Simple.

    I don’t have any debt, and I’m looking for a house to buy with cash. Good investment — a place to live in and own outright.

  • John Lawrence Allen got me more money back from brokerage houses than I could believe – http://www.senseoncents.com/2010/01/survey-americans-want-wall-street-held-accountable/






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