To The SEC: Why It Is Necessary to Change Public Reporting Requirements on Stockbrokers

Recently, Shepherd Smith Edwards & Kantas LTD LLP Founder and Securities Fraud Attorney William Shepherd wrote a letter to the Securities and Exchange Commission voicing his support for needed changes to the public reporting requirements on stockbrokers. His letter was published on the SEC’s Web site and included a number of key facts and statistics, including:
 
·      The # of registered US brokers: Over 500,000 brokers · The # of investors: More than 50 million, and nearly all of them have recently lost money on their investments · The # of US securities fraud claims filed in arbitration: About 5,000 claims ·      The # of investors that file for recovery: 1 out of every 10,000 investors
·      The # of investors that contact Shepherd Smith Edwards & Kantas LTD LLP each year about a possible stockbroker fraud case: About 5,000 investors ·      The # of stockbroker fraud cases our securities fraud law firm takes on each year: About 150 cases  
Why public reporting requirements on stockbrokers must change:
 ·      Currently, investors with complaints must write a letter to the investment firm.
·      Yet these investors often prejudice their potential case without speaking to a securities fraud lawyer first while dealing with the firm’s attorney on their own.
·      Many investment firms take months to respond to these letters. In the meantime, the time that an investor has to file a securities fraud lawsuit or an arbitration claim is running out.
·      When fulfilling reporting requirements, investment firms rely on skilled wordplay to avoid reporting about certain details, such as the identity of the broker involved in the potential case.
·      Firms have been known to disregard reporting requirements, and in many instances, regulators allow them to do so without imposing consequences.
 
Attorney Shepherd notes that while securities industry spokespersons often point to “rogue brokers” -and not the securities firms-as prime culprits of stockbroker fraud, the industry seems bent on preventing the public and regulators from identifying these “few bad apples.” He is also astounded at how much in “angst” the securities industry is in about allowing the public a “look under the curtain.”
 
Mr. Shepherd says that the truth is that investor complaints to investment firms are seldom reported. Rather, these complaints are “noted,” while the firms get to publish the “spin” that they believe will exonerate them in the readers’ eyes.
 
Attorney Shepherd is calling on the SEC to do its job, which is to protect investors.

Related Web Resources:
Read Mr. Shepherd’s letter to the SEC

US Securities and Exchange Commission

Shepherd Smith Edwards & Kantas, LLP