My definition of "Fiduciary" never reached beyond that of responsibility as a member of a board of directors of a small non-profit organization. This included my duty to act in a respectable manner and refrain from asking for reimbursement on alcohol I drank while traveling for the association. As an investor, I never considered that the board of directors of a fund management company would lose my money. In fact, I always chucked the election by proxy forms I received from fund companies that held my humble savings. Since the major financial fallout, I have been rethinking, like everyone, about who holds my money.
The Macbook Dictionary opens my eyes to a more succinct definition of fiduciary as much more than just a trustee, but someone who holds your money. A fiduciary has a duty (called "fiduciary duty", and I am not talking about bio-poo), to invest or hold that money as directed and in the interest of the investor. This is big, like Enron big.
Great examples include recent, although, not the most recent of giants to fall, Lehman Brothers Holdings, Inc. In fact, they are such a hot target, legal websites have already popped up to lure potential victims for a class action suit against Lehman. Victims are people who trusted Lehman with their 401k and pension plans, and who can prove that Lehman violated its fiduciary duty. Proving this will be a no brainer as Lehman's (fiduciary) CEO is already appearing in front of congress having explain what he did with every one's money. Basically, the claim is that Lehman shucked its responsibility by putting Lehman's interests (big pay checks) ahead of their investors' interests (our life savings).
The sad part is, as this modest blog moves forward, so does the next CEO brainiac with a new innovative way of investing for higher returns, higher commissions and faster growth, all with someone else's money, and unregulated. We are definitely not experiencing the first breach of our wallets, and it will not be the last. Maybe each family unit should build their own compound with their own governments, schools and banks. Oh wait, I think the pilgrims already tried this.
Unfortunately, no one has come up with a new hair-brained resolution to solve the worlds problems. And although the Lehman Brothers debacle seems small compared the giant roller coaster free fall the stock market just took us on, I truly believe that we will be okay. Even better, while we are all starving because we cannot afford groceries, we will solve the latest plague recognized by the government as obesity!
As a side note, sorry for the late blog. Next week, I blog about Family Guy??? Check out my favorite blogs and click on Zen to find some peace for your life.
2 comments:
There's a fine line between a CEO being compensated and a corporate raider... a line that's clearly crossed when, as in the case of Lehman's CEO, we're talking over $200 million dollars!
There's a fine line between employee compensation and theft... a line that's clearly crossed when, as in the case of Lehman's CEO, we're talking about over $200 million dollars!
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