New SEC investor advocate says he has investor-protection genes

NASAA's Rick A. Fleming says he's the man for the job, to flag retail investor concerns

Feb 12, 2014 @ 3:43 pm

By Mark Schoeff Jr.

SEC, investor advocate, rick a. fleming, nasaa
+ Zoom
Rick A. Fleming, the SEC's first investor advocate

Rick A. Fleming is confident he’s a perfect fit as the Securities and Exchange Commission’s first investor advocate, a job to which he was appointed Wednesday.

Mr. Fleming will head an office that is responsible for ensuring that the concerns of retail investors are elevated at the commission, as well as at self-regulatory organizations such as the Financial Industry Regulatory Authority Inc. He will identify problems investors are having with financial firms and products and make recommendations on how rules and regulations can better protect them.

The position was mandated by the Dodd-Frank financial reform law. Mr. Fleming, 45, will report to SEC Chairman Mary Jo White and file two annual reports to Congress on the activities of his office.

“This is right up my alley,” said Mr. Fleming, a former general counsel for the Kansas securities commissioner and currently deputy general counsel of the North American Securities Administrators Association Inc. “Investor protection has been in my DNA for a very long time.”

He still vividly recalls the first securities fraud case he prosecuted in Kansas, where he worked from 1996 to 2011. It involved a scheme in which a retired Kansas farm couple lost $70,000.

“I can remember how angry I was that these people had stolen money from this couple that worked to save it,” said Mr. Fleming, who is married and has six children, including five daughters. “That’s where my passion for this job comes from — just seeing up close and personal when a scam artist preys on the weak. It’s experiences like that that have made me passionate about investor protection.”

Mr. Fleming will need that attitude to make his presence felt at the SEC, according to Barbara Roper, director of investor protection at the Consumer Federation of America. She said that the investor advocate position has remained unfilled in the nearly four years since the Dodd-Frank law passed, in part because of internal ambivalence at the SEC, which sees itself generally as an investor advocate.

“The person in that job is likely to encounter resistance from the SEC staff,” Ms. Roper said. “It will be up to Rick to get past any such resistance and make it work.”

In his conversations with SEC commissioners and staff, Mr. Fleming said that he has received a positive reception.

“I can play a constructive role,” he said. “But I don’t go into it with an ax to grind or feeling that the SEC staff is the opposition. Investor protection is part of [the commission’s] mission. I won’t be the only one there in the business of protecting investors.”

In his role, Mr. Fleming also will be part of the SEC Investor Advisory Committee, which also was created by Dodd-Frank to bring investor concerns to the agency’s attention. Ms. Roper, who is also a member of that committee, asserts that the SEC has not adequately addressed investor protection in recent rule making, such as a regulation that allows public advertising of private-securities offerings.

“We look forward to working with Rick to see if we can do a better job of ensuring that investor concerns are better reflected in the commission’s rules and in the setting of the [SEC] agenda,” Ms. Roper said.

Mr. Fleming anticipates that he will be involved every step of the way.

“My expectation is that I will be able to participate early on in the policy making process,” Mr. Fleming said.

A SEC spokesman was not immediately available for comment.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Apr 30

Conference

Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video

Events

How to redesign, rebrand and recast your practice

Redesigning and reshaping your practice is a tough pill to swallow for advisers. But what got you here won't get you there, says John Kozuch, a Chicago financial adviser.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

How does your advisory firm stack up?

Comparing a firm's pay to the competition can point out vast flaws.

10 signs your client is cheating on you

Sure signs that clients may be on the way out the door.

Morgan Stanley sees slower fee-based asset flows on fiduciary rule delay

Flows to advisory accounts, while still higher than the start of 2016, dropped off more than 20% from Q2 and were the lowest in a year.

How adviser salaries stack up to other jobs

Median compensation hovers just under $100,000 on the low end and reaches nearly $300,000 for bosses.

Finra ranking brokers in effort to crack down on industry's bad apples

All 634.403 reps have been ranked based on factors such as prior regulatory disclosures, disciplinary actions and employment history.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print