July 22, 2004
File No. S7-25-99, Certain Broker-Dealers Deemed Not To Be Investment Advisers
Hello.
I reading about this proposed rule, it seems to me that you are allowing a Broker-Dealer to suggest or advise that I purchase a particular stock or mutual fund when that purchase may not be in my best interest. And the Broker-Dealer does not have to disclose any financial incentive they are receiving for convincing me to make the purchase.
So, the Broker-Dealer is getting paid by somebody else to give me advice to make a purchase that may not be what I really need.
Doesn't seem very fair. Does seem like a situation ripe for litigation where the consumer will be saying that the Broker-Dealer crossed the line.
Does seem to me that I really shouldn't be using a Broker-Dealer for any suggestions. I should get advice from people I pay to give me advice and then find the least expensive means possible to make any trades.
There have been too many scandals on Wall Street from Grasso's pay to front running of mutual funds to attempts to manipulate the Treasury market. You need to take steps that will assure me that I can trust you. This ruling is going in the wrong direction. This ruling means that I will have to check out everything that you say with another source.
This ruling and the other problems that you are having will force the government to look at whether or not you really should continue to be allowed to operate independently from the government with a monopoly on the markets.
Brian Havekost