The SEC Could Learn A Thing Or Two From Puerto Rico

Thousands of Puerto Rico residents have filed investment fraud cases against UBS, Santander, Banco Popular and Oriental. Given the pain those investors are suffering in the aftermath of the collapse of Puerto Rico’s bond market, it’s hard to believe, but Puerto Rico could teach the Securities and Exchange Commission about protecting investors. Indeed, the island commonwealth has its own tough fiduciary duty rule to protect investors from predatory brokers, like those who sold disastrous bonds and bond funds. But the SEC, under the current Republican administration, is unwilling to extend such a high standard of care to mainland investors. Instead, the SEC earlier this year put out a tepid “best interest rule” that – admittedly – does not define what the best interest standard even means for investors! The SEC rule also does not provide a legal remedy for defrauded investors to sue their brokers. A report last month from CBS Money…

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