Ethics and the Stock Market- can they co-exist?

I feel a bit like Kerry Bradshaw sitting writing this column- bringing up questions of ethics in a world dominated by greed and fear – it seems as complicated and non- answerable as some of her dating questions.

I have been in this business for over twenty five years and think I have “seen it all” until yet another dishonorable or inept member of the human race proves me wrong.
It’s been my experience over the years , that failures and resulting losses in the stock market are a combination of : lack of character, lack of ability, lack of execution and lack of funding on the part of all players from the investor to the CEO, and to firms like mine caught somewhere in the middle.

I have heard every lie, every excuse and every reason for ignorance imaginable. I once had a fund manager complain about a client we dealt with years ago, when their stock was spiraling downward. I asked him if the read the SEC filings referencing the convertible debt on the books – with no “floor”. His responded indignantly he did not read SEC filings! So there is one example ( out of many I could expound upon) of investors trusting a fund manager that did no due diligence, a company that entered into a bad deal to satisfy funding needs at the time , and my firm caught in the middle of a pile of crap at the end.

So maybe I should do more due diligence and pick better clients? With the recent onslaught of corporate SEC investigation and hedge fund investigations, there have been SEC filings/ charges against some of the previously most respected and well thought of companies and individuals in the investment community.

Would I have taken on Martha Stewarts Company on as a client pre-SEC? Yes – and I would now as well.

I think we all have to take a closer look at the reasons we participate in the investment community at any level and own our answers for ourselves. If we wanted to be purists we could volunteer for a Church or a non- profit…. Like there is NEVER ANY SCANDAL OR WRONG DOING THERE………

I think we should add disclaimers to news releases and filings for public companies and investing in general that are more in line with the requirements of the pharmaceutical industry …
Warning, investing in this company or fund may cause head aches, nausea, impotence and diarrhea!

So just like Kerry Bradshaw would wonder - If all men are dogs – why do we keep putting ourselves out in the dating world???- then comparably if the investment community is plagued with a lack of ethics and brains – why do we continue?... Because just like Kerry – we are looking for “Mr. Big”