|
 |
| 2002 News and Press Releases |
|
|
HEADLINE ARCHIVED:
Revenge Of The Investor -- Angry Shareholders Are Investigating Brokerage Fraud, Waging Proxy Fights, And Agitating For Securities Reform
By: Gary Weiss, with Aaron Bernstein, Michael Arndt, Emily Thornton, Mara Der Hovanesian, and Heather Timmons
BusinessWeek. December 16, 2002
_________________________________________________________________________
EXCERPT: When he saw the news on the Securities & Exchange Commission Web site, Floyd
Schneider couldn't help but gloat. He swiftly contacted his friend and colleague, Richard M. Cocchieri, whose reaction was more subdued: satisfaction and professional pride. There it was, about halfway down the SEC News Digest of Sept. 30, 2002: The SEC was launching a civil enforcement action against 17 defendants, led by a Texas brokerage named Salomon Grey Financial Corp., accusing them of engaging in a pump-and-dump stock swindle. These were the targets of their investigation--Schneider's and Cocchieri's. This was, as far as they were concerned, their enforcement action. These two men are investigators--but they don't work for the SEC or the NASD or the FBI. Cocchieri is a dentist, Schneider a mortgage broker. They are in their early forties and live in the northwest suburbs of New York City. They don't hunt corporate wrongdoers to dig up grist for lawsuits or to snag government bounties. It's not about getting money. It's about getting even. Like thousands of other investors, they became involved in the markets in the late 1990s and were disillusioned, big-time. Usually the story would have ended there, with a deflated portfolio, a pile of unopened brokerage statements, and a vow to stay away from stocks. With stocks tanking, widespread economic misery, and scandals draining portfolios--$170 billion in direct losses from the eight major corporate and accounting controversies--it's no surprise that investors are fleeing. Some $2.4 billion poured out of equity mutual funds through Aug. 31, vs. net inflows of $43.6 billion of new money in the same period last year. But amid all the frustration, a new dynamic is emerging. Many investors are taking matters into their own hands. They are fighting back--and winning. It's almost as if the Peter Lynch credo of the bygone bull market has been turned on its head. In his classic 1989 book, One Up on Wall Street, the legendary former Fidelity Magellan manager preached the virtues of self-help. That spirit is still
very much alive today, only now, instead of picking stocks, investors have turned to picking on their adversaries--stock promoters, online investment letters, and brokerages that push questionable stocks.
|
|
|
