Recent analysis from The New York City comptroller’s office finds that five city pensions have paid $2 billion in fees to Wall Street firms in exchange for $40 million in investment returns.
Talk about bad timing; news of the “heist” broke roughly a month after the Obama Administration announced it would back the Department of Labor’s bid to implement a fiduciary rule—which of course deals with excessive fees. Pandemonium ensued, but whatever objections the industry was planning to mount are now dead on arrival.
Coincidence? Binging on “House of Cards” has us intimately familiar with the concept of a false-flag operation, and after watching a former secretary of state muddle through a pretty serious email scandal we’re game for any theories, however paranoid. But it won’t lessen the impact.
Point-of sale-disclosure, 12b-1s, you name it; if it’s in anyway associated with fees, get ready for a tsunami of scrutiny, more so than ever before. And we haven’t even mentioned litigation, which is a whole other topic.