While the industry said the law would cut down on frivolous securities lawsuits, many say the new law would make it easier to commit securities fraud on unsuspecting investors and more difficult for the victims of fraud to recover their losses. The National Securities Market Improvement Act, another bill that Dodd fought earnestly for, was supposed to provide oversight of the mutual fund and securities industry. While it contained some good consumer provisions, it ultimately weakened oversight that would have protected investors. And, in October of last year, Dodd lined up as a cosponsor of the Securities Litigation Uniform Standards Act, an extension of the earlier securities litigation legislation. Even trial lawyers who opposed such securities litigation legislation, and heavy givers in their own right, especially to Democrats, could not compete with the industry's donations or lobbying efforts.
Most investors lack a basic understanding of financial terms and how investments work.
Meanwhile, securities fraud is on the rise. Public Campaign's Golden Leash Award focuses public attention on politicians who do particularly egregious favors for their cash constituents, highlighting their captivity to special interests at the expense of average voters, taxpayers and the public at large. Representative Bill McCollum of Florida was the first recipient of the Golden Leash last month. Senator William Proxmire is a member of Public Campaign's National Advisory Board and has bequeathed to us his legendary Golden Fleece Award.