December 18, 2008

151 reasons to dump Cox

Call it a Hail Mary. With SEC credibility in the toilet, Obama looks to FINRA head Schapiro to take the reins. Pity Cox (to a point). He was a consensus builder in a position better suited to a dictator (albeit a benevolent one). He tried to restore a working relationship with the financial services industry after Donaldson's contentious watch. Being a former congressman, I thought he understood politics and wouldn't have been so na?ve. His defenders argue it's impossible for a sheriff to prevent every burglary in town. Are ... they ... serious? Madoff was far from a simple burglar, and this is another case of simply failing to connect the dots (actually, failing to connect the flashing Broadway marquees that read, "Bernie is a crook").

So what does Cox do in response to this massive regulatory oversight (forgive the pun)? He immediately passes Rule 151a, which requires indexed annuity agents to be securities licensed. From a purely competitive standpoint, it's a complete boon for independent advisors who have found a place for EIAs (FIAs, whatever) in the boomer portfolio. But whether you think it's a good thing or a bad thing to require a securities license, the desperate attempt to appear forceful (when that train left the station long ago) is so transparently lame. The Wall Street Journal has more on the Schapiro nod, as well as Rule 151a. Stay tuned.

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