Saying no and yes

The Chairman of the US Securities and Exchange Commission, Mr Arthur Levitt, has held a series of investor meetings over his 10-year tenure, offering down-to-earth advice to investors. These are edited extracts from his last Investors Town Hall Meeting held at Philadelphia, Pennsylvania. Mr Levitt remits office this month.

Say no to companies that play games with their earnings, who practice balance sheet cosmetology.

Say no to option grants in the dead of night to executives; to executives who treat their companies as their personal playthings; to mutual funds deceptively named or promoted; to fund managers who surreptitiously inflate returns through portfolio pumping; to trading systems or practices that favour brokers instead of their customers.

Say no to Internet fraudsters, high-pressure sales tactics, get-quick-rich schemes, and those who prey on the elderly by hawking high-risk securities; to analysts that never met a stock that they didn't like; to regulators who take their eyes off the interests of investors, and politicians who care more about corporate interests than individual investors.

Say yes to lawmakers who take the time to understand what makes our markets work. Say yes to brokers and mutual funds who care about your long-term trust rather than short-term dazzle.

Say yes to companies who don't let their financial reporting bend to the tune of Wall Street's quarterly dance. Say yes to management who understand they work for shareholders. And above all, say yes to informed, careful, realistic, sceptical and long-term investing.

(Source: www.sec.gov)