Fiduciary and investment banks
On the heels of allegations that Goldman Sachs took advantage of clients during the mortgage-market collapse, Congress reportedly is considering new legal standards for investment banks when they deal with customers. Law Professor Tamar Frankel, an authority on securities law and author of “Trust and Honesty: America’s Business Culture at a Crossroad,” says slapping fiduciary duties on investment bankers would prevent them from acting for their own benefit at the expense of the investors.
“The result may be that brokers and investment bankers will innovate less for their own benefit and might even, God forbid, earn less. But the financial system will be less subject to bubbles and crashes, so investors might earn less but they’ll also lose less.”
Contact Tamar Frankel, 617-353-3773, firstname.lastname@example.org