Are Retail Investors Better Off Today?

Abstract:     
In recent years, investors' attitudes towards the securities industry plummeted, in reaction to both the conflicted research and the mutual fund scandals. In both instances, Congress and the regulators responded by asserting the need for reforms to restore the confidence of the retail investor.

This paper first reconsiders the importance of investor confidence and argues that, in an era where adults are required to invest in the markets, the government has a moral obligation to assure that investor confidence in the markets is warranted. This paper examines the SEC's reforms, as well as its investor education initiatives, through the lens of morality and assesses whether they have improved the environment for retail investors. It concludes that the most optimistic assessment is that the SEC has plenty of unfinished business to attend to.

Keywords: Securities Law

JEL Classifications: K22

Accepted Paper Series