Voices: Let’s not forget — Bernie Madoff was a fiduciary
November 11, 2018 by John Taft
Ten years ago next month, Dec. 11, 2008, the FBI arrested financier Bernard L. Madoff for securities fraud. Soon after, thousands of investors learned they were victims of a nearly $65 billion Ponzi scheme and what would eventually be revealed as one of the largest investment frauds in U.S. history.
Not long after Madoff was jailed, I testified before Chairman Barney Frank (D–MA) and the House of Representatives Financial Services Committee in support of heightened protections for individual investors.
The majority of questions that day related to what would become Section 913 of the Dodd Frank Act, which gives authority to the SEC to impose a fiduciary standard of care on financial advisors providing wealth management services to individuals. This standard would have required these advisors to put their clients’ interests ahead of their own.
As committee members strolled in and out of the hearing room, I recall being asked the same specific question at least a half a dozen times: “Will this prevent another Madoff?”
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