Public Believes Wall Street Executives were Dishonest during Financial Meltdown and that Corporate Officers do not Provide Accurate Information in Financial Statements
WASHINGTON, Jan. 19 /PRNewswire-USNewswire/ -- Sixty-two percent of Americans believe Wall Street executives were not honest with the public during the recent financial meltdown and 59 percent of Americans do not believe corporate CEOs and financial officers provide accurate information in financial statements. And, most Americans favor additional legal rights for investors that would allow them to seek compensation for loss from any deceptive conduct by Wall Street or corporate officers -- even if it did not involve a public misstatement.
These are among the findings of a national Opinion Research Corporation (ORC) survey of public attitudes toward financial fraud and investor protection. The telephone survey, conducted December 10-13, and sponsored by the National Association of Shareholder and Consumer Attorneys (NASCAT), also found that nearly all Americans feel that those who commit fraud should be held accountable to investors who lose money as a result of the fraudulent behavior. Similarly, nearly all Americans think that those who engage in fraud but do not admit it publicly should still be held accountable to investors.
"The survey findings reveal that the public is very aware that financial and corporate officers have been engaged in conduct that is not just reckless, but that has been deceptive and dishonest before and during the financial meltdown," explained Ira Schochet, Esq., NASCAT's president. "Americans understand that Congress and the Administration must substantially increase accountability in our financial markets in order to protect investors and reduce the likelihood of another systemic crisis."
As reported by Opinion Research Corporation, some of the key findings are explained below:
-- ORC explained to survey respondents that the law allows investors to seek compensation from executives who knowingly make misrepresentations to the public. They were then asked if there was a need for additional legal rights that allow investors to sue for compensation from executives who knowingly engage in any form of deceptive conduct, even if it does not involve a public misstatement. Three-fourths (74%) agree that investors should have these additional rights. One-in-five (21%) do not.
-- Practically every respondent (94%) feels that those who commit fraud should be held accountable to investors who lose money as a result of those fraudulent actions. Only 5% do not think they should be held accountable.
-- Support is also strong for keeping executives accountable to investors when they perpetrate financial fraud even if they do not publicly admit their wrongdoing. Nine-in-ten (90%) support this idea with only 7% saying no.
-- Ninety percent of Americans believe people who participate in financial fraud – such as knowingly engaging in a sham transaction or telling others how to prepare fake financial statements or otherwise deceive investors – should be held accountable to investors. Only 7 percent oppose, while 2 percent had no opinion.
-- And, respondents were asked about the current ability of corporate managers to avoid accountability to shareholders by limiting disclosure of a wrongdoing. When asked, only a quarter (25%) agree that this should happen while 73% disagree.
Findings Support Congressional Action on Anti-Investor Court Decisions
"These findings show overwhelming public support for Congress to restore liability to investors for those who aid and abet fraud and those who can currently escape liability by manipulating public disclosures," NASCAT's Ira Schochet continued. "Congress can accomplish these goals by rolling back two radical Supreme Court decisions (Central Bank in 1994 and Stoneridge in 2008), which eliminated private liability for aiding and abetting securities fraud; and, clarifying another Court decision (Dura in 2005), which inadvertently empowered some conservative lower courts to throw out valid investor fraud claims whenever sophisticated executives and their professional advisers disguise the impact of wrongdoing by manipulating the timing and content of news releases."
Investor Demographics and Survey Methodology
About half of American adults own stock and half do not. A typical owner is older, wealthier and better educated than someone who does not own stock. Stock owners are just as likely to have the investment as a result of an employer plan as to own it on their own without any employer involvement.
These findings are from a telephone survey conducted of 1,017 adults comprising 509 men and 508 women. Interviewing for this survey was completed during the period December 10-13, 2009. The results have a margin of error of plus or minus three percentage points among the total sample. Opinion Research Corporation, based in Princeton, NJ, conducted the fieldwork.
The National Association of Shareholder and Consumer Law Attorneys is a nonprofit organization comprised of about 100 law firms representing consumers and investors - including pension funds and individuals - in cases of securities fraud and other forms of "white collar" wrongdoing and criminal activity.
SOURCE National Association of Shareholder and Consumer Attorneys