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| 2003
News and Press Releases |
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HEADLINE:
Main Street Loses $6 Trillion To Wall Street But Fights Back
By: Staff Writer
The Yearbook of Experts, Authorities and Spokespersons. August 26, 2003
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EXCERPT: Six Trillion Bucks Evaporates: Wall Street To Blame -- Unlike the crash of 1929, the recent gross malfeasance, fraud and corporate corruption hit the average Joe. "This is a '$6 trillion dollar' press release," says Paul Young, founder and CEO of the nationwide Securities Arbitration Group, Inc. "As an expert in the field of securities fraud and recovery, I've studied all the stock market scandals over the last 100 years. Today's scandals are different because the main victim today is Main Street investors-everyone from parents saving for their children's college education to the firefighter saving for retirement to the elderly who don't have time to rebuild their nest egg again. What most people don't know is that there is a way to fight back to try to recover these losses-through securities arbitration." Today's Scandals Have a Wider Impact Than Crash of 1929 -- In June, William H. Donaldson, the new chairperson of the SEC, told a group of executives that the current Wall Street fraud and abuse situation is worse than the stock market crash of 1929. Unlike the 1929 crash where the impact was more concentrated among affluent investors, the fraud and abuse by Wall Street now is more widespread--50% of all American households have been hurt and have lost $6 TRILLION in stock value. In retirement accounts alone, the SEC's Donaldson stated that "between 50 to 60 million investors lost most of the value" of these safety-by-definition accounts. How Did This Happen? "Main Street investors not only trusted corporations, but they also trusted Wall Street firms to do the right thing in underwriting, pricing, and honestly presenting new IPOs (initial public offerings of dot-coms and other companies) and the financial status of seasoned companies," says Young. "Everyone assumed that investments were being made based on sound numbers, proper foundations, fundamentals and unbiased advice. It's Wall Street's obligation to put the interests of investors ahead of their own quest for fees, commissions and investment banking business and to avoid conflicts of interest. In many instances, they did not do that. Main Street suffered horrific consequences and Wall Street must pay for its wrongs." What Can Be Done to Recover This Lost Money? "The recourse is simple," adds Young. "Securities arbitration affords the Main Street burned investor the opportunity to bring his claim (if legitimate) before a panel with the power to make an award which Wall Street must pay. And arbitration can pay off big. Arbitration awards historically are far higher than class action lawsuit amounts. And arbitration cases are increasing each year. On average, 25 new securities arbitration cases are filed each day (source: NASDR, as of 5/31/03)." And arbitration is now more important than ever with class action lawsuit dismissals by the federal court last week, experts like St. John's University law professor Michael Perino says that "This is going to be a long-term battle fought in many small skirmishes over a long period of time." This means arbitration. In the July 3rd Los Angeles Times article in which Perino is quoted, the Times additionally and properly states that "Unlike judges, arbitration panels have more leeway in making their decisions and don't have to base their decisions on strict interpretations of securities law. Arbitrators may conclude that investment banks (brokerages) are partly (or fully, says Paul Young) at fault for investor losses, particularly if the banks broke industry rules, and may be more inclined to side with investors. Therefore, the battle over Wall Street impropriety may shift from high profile legal cases to thousands of arbitration claims, experts say."
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