“An investor’s life savings should not be caught up in a contest to win a trip or other award,” Galvin said.
Galvin pointed to real-life examples of investors who have lost billions of dollars as a result of conflicted investment advice by listing numerous enforcement actions his office has taken. Massachusetts has recovered millions of dollars in losses for investors, caused by brokers making conflicted investment recommendations, promoting high-fee and high-commission products and making fraudulent representations in order to induce investors to stay in poorly performing investments, he said.
Galvin urged the SEC to replace the current proposal with a meaningful one that will put brokers on equal footing with investment advisors.
“As a regulator, I have seen the grievous harm suffered by Main Street investors who mistakenly trusted and relied on conflicted investment advice. The commission now has the opportunity of a generation to protect them. If they fail to do so, it will be left to the states,” Galvin said.