This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Financial Reform Leaves Vile Law Intact

The court pointed out that the closest the plaintiff came to showing "scienter"--knowledge of wrongdoing--was when a former employee allegedly "heard that Impac's president overrode an underwriter's recommendation to reject a bulk loan purchase in April or May 2006 and caused the loan pool to be purchased." The problem, the court found, is that "there is no allegation that this override necessarily occurred during the class period and in any event [the plaintiff] provides no specific information about how the underwriting guidelines were violated. Even crediting this allegation in full, it is 'not so indicative of fraudulent intent that it carries the weight of the entire . . . complaint.'" So the court ruled, citing yet another sage decision in another investor-castration case.

So out went the case. Despite those five ex-employees, the plaintiffs weren't able to conduct any discovery, thanks to Congress's gift to the shareholders of America.

I'm not pleading the cause of class action lawyers here, folks. Melvyn Weiss (no relation, thank God), the king of class action lawyers, was sent to prison a couple of years ago for illegal client kickbacks, and even before that scandal the class-action bar was rife with issues, chief among them was that they get paid too much and investors get paid too little. But in an era in which the SEC proves every day that it's simply not up to the task of enforcing the securities laws, securities fraud suits are one of the few ways private citizens can get some measure of justice.

The PSLRA needs to go, and a real reform measure needs to take its place. It's not happening, but that doesn't make it any less necessary.

More on FinReg
GE Capital Could Feel Reform Sting
Gary Weiss has covered Wall Street wrongdoing for nearly two decades. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, "The Mob on Wall Street," that exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Conde Nast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book Born to Steal (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. Wall Street Versus America (Portfolio: 2006) was a hard-hitting account of investor rip-offs. He blogs at
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.36 -2.80%
C $45.50 -2.50%
BX $26.89 -2.70%
IMH $13.96 -0.64%
JPM $62.17 -2.50%


Chart of I:DJI
DOW 17,733.58 -157.58 -0.88%
S&P 500 2,059.67 -21.76 -1.05%
NASDAQ 4,762.1030 -55.4910 -1.15%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs