There is currently a movement underfoot in Congress to recompense investors in the Bernard Madoff and R. Allen Standford Ponzi scheme debacles. It is couched in the terms of people having lost their life’s savings being fairly represented and treated but is actually a disgusting reminder of how those in power control much of our government now, wheeling and dealing in the halls of Congress to enact hidden taxes on the American people. By and large, the investors in these schemes were wealthy individuals and families who enjoyed years of outstanding returns with little or no risk, something that should have immediately raised concerns for any normal investor. Instead, they are now trying to collect money from Wall Street firms based on returns they would have gotten in the schemes had they been above board.
Should this come into law, it will codify protections for imaginary gains in all kinds of investment schemes. These were investors, mostly all rich, who should have known that outlandish returns had to be highly risky. We should also realize that these investors weren’t left out in the cold like so many average Americans who have lost significant portions of their life savings over the last three years. People in these schemes were covered under the Securities Investor Protection Corp up to $500,000 towards legitimate claims. Claims that aren’t legitimate include instances where the individual withdrew more money than they paid in. These people are clamoring for imaginary gains when many of them actually made money on the schemes. This is ridiculous.
What this will turn into is a tax. If it becomes law, the brokerages will have to pay the fines but they will most certainly pass the costs on to the consumers, most of whom are average Americans who just happen to have accounts with them. To think that we have Senators who are gladly sponsoring legislation to defraud the public to reward the rich and connected is sickening. But I suppose that is exactly where we are these days. Millions of people are out of work and our elected representatives are trying to get imaginary returns granted to the already rich and wealthy. Some day, the people of America will get sick of this treatment. I have some fear that the response from them will not be quiet and civilized.