According to a June 7th Businsessweek article, one hedge fund group has spent $1.4 million lobbying congress in the first quarter of 2010. That’s a lot of lobbying.
They are not alone. Managed Funds Association, an industry trade association, whose members include Bank of America Merill Lynch, Bank of New York, Barclays Capital, Citi, Goldman Sachs & Co., JP Morgan Chase & Co., and many more have increased its spending by over half a million dollars from the same quarter last year. Why?
Surely not to protect consumers; nor to put more strident controls and oversight on a financial services industry that brought us within an eyelash of a worldwide depression.
No. Their singular goal is to stop reform that Main Street so desperately needs. The newly passed Senate and House financial reform bills, presently in reconciliation proceedings, signal the beginning of a material shift towards proper regulation of the casino, Wall Street has become. These reforms include a new Consumer Financial protection Agency, increased rewards for whistleblowers, and the end of predatory lending practices like zero-down sub-prime mortgages. Wall Street wants none of that reform.
As we’ve reported before, Wall Street doesn’t get it – or perhaps more correctly – they do get it. They realize memories are short and lobbying dollars can make a difference. A big difference; so they are playing the game. And playing it well.
The only way Main Street can complete must be through their role as the collective customers and shareholders of Citibank, Bank of America and Goldman Sachs. They must vote with their feet and demand that management of these firms limit spending on lobbying and finally recognize the need for regulation and stability in the financial markets. Proxy battles, sharp attention to management spending and accountability can be a very
And the government must step up enforcement under current regulations and rules. They can no longer take a laissez faire approach to the Captain’s of Wall Street. It’s time for Eric Holder, Mary Shapiro and Sheila Baird (check FDIC) to roll up their sleeves and go after every single violation. Zero tolerance. That’s what Wall Street might understand. That’s what will begin to foster change, stability and growth.
Assisted by Zachary Kady