Be responsible and expect others to be also…

Be responsible and expect others to be also…



by Jim Toes

Over the years, the STA has encouraged those in the financial industry to conduct their affairs with integrity. We have mentioned that being best actors, leading by example and setting the bar on ethical behavior will go a long way toward improving the perception of our industry and investor confidence. I’d like to carry that message forward a bit by addressing a particular behavior that has been around for a long time, in varying degrees. That behavior is recklessly criticizing our chief regulator, the SEC. Criticizing the SEC is not a new phenomenon and at times is warranted, but what about those times when it is not? We as individuals need to take a moment to reflect on whether the criticism we are voicing and hearing is accurate and based on facts. In addition, we – again as individuals – need to decide how to respond when we encounter unsubstantiated criticism of the SEC by our peers. This self-reflection is more than just “think before you speak” – it is also about challenging those who criticize irresponsibly, regardless of whether they do it intentionally for the good of their business model or because it is just the popular thing to do. To be clear, I am not claiming that all is good at the SEC, I am simply asking that we be aware of the impact that criticism or reports of inadequacies has on investor confidence.


“By being responsible in our opinions, and challenging those people who are not in theirs, we can do our industry and the investors we serve a great service.”

In 2010, the STA in a letter to the Commission wrote:

Investor confidence is damaged by every report of discovered fraud and manipulation but not as much as it is damaged by reports of inadequate surveillance and enforcement of existing regulations by the SEC.

We talk so much about investor confidence and we all are looking for ways to improve it. Unwarranted, unsubstantiated and uneducated criticism or reports of inadequacies at the SEC is one area where we as individuals can make a difference. By being responsible in our opinions, and challenging those people who are not in theirs we can do our industry and the investors we serve a great service. We are all guardians of the markets and we owe it to our country to safeguard them while they are in our possession and leave them better for the next generation.

Did you see our April Newsletter? Here