CFA & Ethics

[njtosd]

As a starting point, there will always be people who are bad at their jobs. That’s not illegal, and a bit of inquiry will usually allow you to avoid those people (and hopefully the marketplace will eventually put the bad ones out of business). If it’s more than just lack of talent, people can always file suit for fraud, negligence, misrepresentation, and perhaps file an ethics complaint if that’s available.
IMHO, it’s not the government’s job to be looking over the shoulder of every professional. If the average joe would take appropriate steps when he/she has been the victim of something more than simply making a poor choice, a lot of the bad actors would be weeded out.

[joec]

One thing with the securities industry specifically is that if you’re barred/banned, there is a record for pretty much the rest of your life I think. I can look up folks who I worked with (used to be in that industry) and see that they filed for bankruptcy, tried to engage in some illegal co-investing, got arrested for a felony and the result of it, etc…

It’s still a ton better than what’s out there for the real estate industry.

Lastly, like all industries, there are bad apples everywhere…even in our own families

[joec]

One thing with the securities industry specifically is that if you’re barred/banned, there is a record for pretty much the rest of your life I think. I can look up folks who I worked with (used to be in that industry) and see that they filed for bankruptcy, tried to engage in some illegal co-investing, got arrested for a felony and the result of it, etc…

It’s still a ton better than what’s out there for the real estate industry.

Lastly, like all industries, there are bad apples everywhere…even in our own families

[joec]

One thing with the securities industry specifically is that if you’re barred/banned, there is a record for pretty much the rest of your life I think. I can look up folks who I worked with (used to be in that industry) and see that they filed for bankruptcy, tried to engage in some illegal co-investing, got arrested for a felony and the result of it, etc…

It’s still a ton better than what’s out there for the real estate industry.

Lastly, like all industries, there are bad apples everywhere…even in our own families

[joec]

One thing with the securities industry specifically is that if you’re barred/banned, there is a record for pretty much the rest of your life I think. I can look up folks who I worked with (used to be in that industry) and see that they filed for bankruptcy, tried to engage in some illegal co-investing, got arrested for a felony and the result of it, etc…

It’s still a ton better than what’s out there for the real estate industry.

Lastly, like all industries, there are bad apples everywhere…even in our own families

[joec]

One thing with the securities industry specifically is that if you’re barred/banned, there is a record for pretty much the rest of your life I think. I can look up folks who I worked with (used to be in that industry) and see that they filed for bankruptcy, tried to engage in some illegal co-investing, got arrested for a felony and the result of it, etc…

It’s still a ton better than what’s out there for the real estate industry.

Lastly, like all industries, there are bad apples everywhere…even in our own families

[scaredyclassic]

the pool care industry is remarkably crooked too

[scaredyclassic]

the pool care industry is remarkably crooked too

[scaredyclassic]

the pool care industry is remarkably crooked too

[scaredyclassic]

the pool care industry is remarkably crooked too

[scaredyclassic]

the pool care industry is remarkably crooked too

[equalizer]

Appears CFA Institute does believe in ethics, just can’t get anyone in charge to suport them.

“Of Credit Rating Agencies and Charlie Sheen”

“Step two was to put CRAs on notice that if they do rate securitized products, they too will be held accountable for fraud and negligence in issuing sham ratings associated with the marketing and sale of the securities. That got their attention. Even though the ABS market was as lucrative as any in history for the CRA industry, the prospect of such firms being held liable to investors for bogus ratings was like a splash of ice water. Rather than accept liability, they refused to allow their ratings to be a part of registration statements for new ABS securities — knowing that without the required ratings, issuance of new registered securities would stop dead. Quite a card to have in your hand in a time of economic stress, when securitization offers much-needed financing capacity to the economy.

Backed into a corner, the SEC chose to keep the new ABS market viable, offering assurances that it would not enforce the requirement for a rating to be part of registration statements, as detailed in a recent article by New York Times writer Gretchen Morgenson. So for now, the issuance and related credit ratings of these securities is to be encouraged, not impaired by higher liability — just like flimsy ratings still being offered on sovereign debt, all in the name of financial stability and recovery. Could the cure be worse than the disease? In the immortal words of actor Charlie Sheen, I can hear the CRAs now: “Duh, winning!”

http://blogs.cfainstitute.org/of-credit-rating-agencies-and-charlie-sheen#more

[equalizer]

Appears CFA Institute does believe in ethics, just can’t get anyone in charge to suport them.

“Of Credit Rating Agencies and Charlie Sheen”

“Step two was to put CRAs on notice that if they do rate securitized products, they too will be held accountable for fraud and negligence in issuing sham ratings associated with the marketing and sale of the securities. That got their attention. Even though the ABS market was as lucrative as any in history for the CRA industry, the prospect of such firms being held liable to investors for bogus ratings was like a splash of ice water. Rather than accept liability, they refused to allow their ratings to be a part of registration statements for new ABS securities — knowing that without the required ratings, issuance of new registered securities would stop dead. Quite a card to have in your hand in a time of economic stress, when securitization offers much-needed financing capacity to the economy.

Backed into a corner, the SEC chose to keep the new ABS market viable, offering assurances that it would not enforce the requirement for a rating to be part of registration statements, as detailed in a recent article by New York Times writer Gretchen Morgenson. So for now, the issuance and related credit ratings of these securities is to be encouraged, not impaired by higher liability — just like flimsy ratings still being offered on sovereign debt, all in the name of financial stability and recovery. Could the cure be worse than the disease? In the immortal words of actor Charlie Sheen, I can hear the CRAs now: “Duh, winning!”

http://blogs.cfainstitute.org/of-credit-rating-agencies-and-charlie-sheen#more

[equalizer]

Appears CFA Institute does believe in ethics, just can’t get anyone in charge to suport them.

“Of Credit Rating Agencies and Charlie Sheen”

“Step two was to put CRAs on notice that if they do rate securitized products, they too will be held accountable for fraud and negligence in issuing sham ratings associated with the marketing and sale of the securities. That got their attention. Even though the ABS market was as lucrative as any in history for the CRA industry, the prospect of such firms being held liable to investors for bogus ratings was like a splash of ice water. Rather than accept liability, they refused to allow their ratings to be a part of registration statements for new ABS securities — knowing that without the required ratings, issuance of new registered securities would stop dead. Quite a card to have in your hand in a time of economic stress, when securitization offers much-needed financing capacity to the economy.

Backed into a corner, the SEC chose to keep the new ABS market viable, offering assurances that it would not enforce the requirement for a rating to be part of registration statements, as detailed in a recent article by New York Times writer Gretchen Morgenson. So for now, the issuance and related credit ratings of these securities is to be encouraged, not impaired by higher liability — just like flimsy ratings still being offered on sovereign debt, all in the name of financial stability and recovery. Could the cure be worse than the disease? In the immortal words of actor Charlie Sheen, I can hear the CRAs now: “Duh, winning!”

http://blogs.cfainstitute.org/of-credit-rating-agencies-and-charlie-sheen#more

[equalizer]

Appears CFA Institute does believe in ethics, just can’t get anyone in charge to suport them.

“Of Credit Rating Agencies and Charlie Sheen”

“Step two was to put CRAs on notice that if they do rate securitized products, they too will be held accountable for fraud and negligence in issuing sham ratings associated with the marketing and sale of the securities. That got their attention. Even though the ABS market was as lucrative as any in history for the CRA industry, the prospect of such firms being held liable to investors for bogus ratings was like a splash of ice water. Rather than accept liability, they refused to allow their ratings to be a part of registration statements for new ABS securities — knowing that without the required ratings, issuance of new registered securities would stop dead. Quite a card to have in your hand in a time of economic stress, when securitization offers much-needed financing capacity to the economy.

Backed into a corner, the SEC chose to keep the new ABS market viable, offering assurances that it would not enforce the requirement for a rating to be part of registration statements, as detailed in a recent article by New York Times writer Gretchen Morgenson. So for now, the issuance and related credit ratings of these securities is to be encouraged, not impaired by higher liability — just like flimsy ratings still being offered on sovereign debt, all in the name of financial stability and recovery. Could the cure be worse than the disease? In the immortal words of actor Charlie Sheen, I can hear the CRAs now: “Duh, winning!”

http://blogs.cfainstitute.org/of-credit-rating-agencies-and-charlie-sheen#more

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