Mr. Chairman, ranking member Sarbanes, this hearing is of obvious import as evidenced by the terrific witnesses you've assembled. It's more important because of the urgent need to restore investor confidence in our markets, and the fundamental fairness redressing the wrongs revealed in this investigation.
It goes without saying that we are deeply appreciative of the focus and effort that they, and their staffs, put into developing this Global Settlement and resulting enforcement actions.
Each of the regulatory bodies represented here today - the SEC, the NYSE, the NASD, the State securities regulators, as well as the New York State Attorney General office, are to be commended for the serious, responsible manner with which they sought to address the failure of market participants to properly manage and disclose conflicts of interest by research analysts. A failure that led some to engage in deceptive business practices that worked to the serious detriment of investors.
Regrettably, firms and individuals in the investment banking industry - an industry where I spent the better part of my professional life - allowed themselves to step onto the slippery slope of "irrational exuberance."
Ultimately, that slope led down a path where business reflected "infectious greed" as much, if not more so, than the interest of the client.
In my life I have met and worked with thousands of men and women employed in our financial markets, and I have no doubt that the vast majority are honorable, hard-working individuals who add value to our markets, our economy and to our nation.
Regrettably, this hearing is about individuals and organizations that chose the wrong path. Those who abused the public trust. Those whose missteps undermined the integrity of our markets and caused harm to unsuspecting investors.
This hearing is appropriately about the vigilance of federal, state and other regulators who sought to bring an end to egregious conflicts and the penalties for those who engaged in them. And it's about the redressing the financial loss of those who were harmed.
This settlement is a very significant step in redressing the banking and securities industry's missteps of the late 1990's and restoring public investor confidence. It's an acknowledgement that investors were harmed by undisclosed conflicts and mismatches of published versus actual opinion.
Investors should be aware of the honest risks of investing - the market risks of true valuations, corrections and business dips. They do not and should not be forced to accept the risks of a stacked deck.
Thank you, Mr. Chairman.