NOTE: This post has been moved to the top for the rest of the day to emphasize the importance of the topic.

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Those I know in the securities industry won’t agree, but I believe that the DC Court of Appeals ruling on Friday covered in this AP report by Marcy Gordon was long, long overdue:

Appeals Court Overturns SEC Broker Rule

A federal appeals court on Friday overturned a rule that allowed securities brokers to avoid some requirements faced by financial planners in advising customers, saying both groups must be held to the same standards in order to protect investors.

The 2-1 ruling by the U.S. Court of Appeals for the District of Columbia Circuit held that the Securities and Exchange Commission had overstepped its authority in adopting the rule in 2005. The Financial Planning Association had sued the SEC over the rule, saying that financial advisers and investment brokers acting as such should not be subject to two different regimes.

Brokers who charge customers a flat fee, rather than commissions on securities transactions, and act as financial advisers should – like financial planners – be required to disclose potential conflicts of interest to customers, the financial planners’ group contended.

The Consumer Federation of America, a mutual-fund watchdog group and the organization representing state securities regulators joined with the planners to challenge the SEC rule.

The two-judge majority of the appeals court panel agreed. The ruling said the law governing investment advisers was intended “to protect consumers and honest investment advisers,” and to establish standards of responsibility to act in the investor’s best interest.

“The SEC has exceeded its authority in promulgating the final rule,” said the ruling written by Appeals Court Judges Brett Kavanaugh and Judith Rogers. The agency’s legal stance on the matter “flouts six decades of consistent SEC understanding of its authority,” it said.

The regulatory overreach element of the Appeals Court’s argument appears to indicate that an appeal to the Supreme Court by the SEC would be futile. I don’t see Chief Justice Roberts or Justice Alito being receptive to the idea of the SEC taking upon itself the rewriting of professional regulations without Congress’s specific permission.

That is good.

Here’s why:

• A financial adviser/financial planner’s mission in life is to help his or her clients reach their financial goals, which, though there are sometimes others, are usually these: Establishing a reserve fund, ensuring adequate and appropriate housing, providing education those who need it (for children going to college and for adults who might need continuing or career-change education), planning for a financially adequate retirement, and (of course) having some fun. The planner helps select appropriate investment products for his or her clients that will hopefully enable them to achieve those goals.
• Stockbrokers and those who sell securities are generally good at ….. selling securities. Although they may know securities and other investment products inside out, they are often not in a position, nor do they often have the training, to help their clients achieve their goals (other than to “make money”).
• I’m oversimplifying here, but not by much — The SEC’s position, known inside the industry as the “Merrill Lynch Rule” (because that firm was most outspoken in its belief that its brokers can and should be considered financial advisers), was that those who are able to sell securities essentially need little or no further training to be able to call themselves financial advisers. That is all too often transparently NOT the case. A securities salesperson holding himself or herself out to be a financial adviser without the requisite training and background in financial planning is misleading the public.
• As to conflicts of interest (again I’m oversimplifying), there is potential for that on the part of both financial planners and securities salespersons. But, a financial planner specifically takes on a fiduciary responsibility for helping his or her clients achieve their goals, and any decisions or recommendations that compromise that fiduciary duty are crystal-clear violations of the adviser’s code(s) of ethics. Not only are the ethical strictures less present and less visible in the securities industry, it is frequently the case that the securities firms push their salespeople to emphasize products that not only may not be the best products around, but that also are sometimes sold to clients who shouldn’t be buying them, because they (the clients) shouldn’t be taking on the high level of risk involved in a given product. A client of a securities salesperson holding himself or herself out to be a financial adviser without the requisite training and credentials is more likely to let his or her guard down and to be misled by the salesperson.

The Court ruled that the SEC was wrong. The Court is absolutely correct.

That would be “expansion” — not by much, but expansion nonetheless.

Memo to the New York Times (since I don’t see in this Times search where the original claim of a manufacturing recession has been retracted or corrected): Manufacturing is NOT in a recession, and the current ISM report is the second in a row showing expansion since your bogus report was called out (February’s ISM report with a 52.3% reading is here).

This, is, ridiculous — Don Surber (HT Instapundit) catches a Formerly Mainstream Media trend — What was once Republican-majority “pork” is now Democrat-majority “pet projects.”

One word: Bull-oney.

I do not anticipate that Porkopolis will be changing his name to PetProject-opolis any time soon.

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Stay with me on this (HT Techdirt) — “Surprise: Study Finds Online Users Finish More Stories Than Print Readers.” I’m not surprised.

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This is delusional. A one-word response: Ireland.

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Investors Business Daily thinks the Fed should cut interest rates, and that recession may be a bigger danger than inflation. Bill Conerly thinks the recession odds are about 10% – 20%.

Don Luskin says “no way” to a rate cut:

….. the whole reason the subprime market got out of hand in the first place was because the Federal Reserve has kept interest rates too low for too long, thus flooding the global markets with excess money. All that money had to go somewhere, and apparently a lot of it went into bad real estate loans.

And a lot of it went into everything else, too. That’s inflation — when the Fed prints too much money, and eventually all the goods and services in the economy re-price higher until all that money is used up. Since inflation measured by the core Consumer Price Index hit its lows in December 2003 at an annual growth rate of about 1%, it’s now risen to about 2.7%. That’s well above the Fed’s avowed “comfort zone.”So the Fed has raised interest rates, to lessen the inflationary impulses in the economy. But they still haven’t raised them enough to keep inflation from rising. By any conventional measure, inflation remains in its uptrend from late 2003.

I think Luskin has made the right call.

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The Latest from Venezuela You Won’t See in Old Media Reports –

“….. this isn’t about law or the public interest anymore, this is about bloodthirsty mob rule“

It always has been (HT Michelle Malkin)

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This is the strangest combination of topics I’ve seen in one sentence in quite a while — from a CNN/Money e-mail I received last Friday:

Personal income, spending up 0.6% in February; USDA says 2007 planned corn plantings highest in 63 years, Reuters reports.

As usual with the One Man Global Content Provider, the whole column in Sunday’s Chicago Sun-Times is excellent and should be read in full.

These paras stand out. They include a factoid (in bold) about UN authorization that the Formerly Mainstream Media seems to have conveniently overlooked:

OK, well, how about the United Nations? Those student demonstrators want the execution of “British aggressors.” In fact, they’re U.N. aggressors. HMS Cornwall is the base for multinational marine security patrols in the Gulf: a mission authorized by the United Nations. So what’s the U.N. doing about this affront to its authority and (in the public humiliation of the captives) of the Geneva Conventions?

Short answer: Nothing.

Slightly longer answer: The British ambassador to the U.N. had wanted the Security Council to pass a resolution ”deploring” Iran’s conduct. But the Russians objected to all this hotheaded inflammatory lingo about ”deploring,” and so the Security Council instead expressed its ”grave concern” about the situation. That and $4.95 will get you a decaf latte. Ask the folks in Darfur what they’ve got to show for years of the U.N.’s “grave concerns” — heavy on the graves, less so on the concern.

It goes back to June of last year, and it appears to have gone unnoticed and unreported:

Munitions Found in Iraq Meet WMD Criteria, Official Says

WASHINGTON, June 29, 2006 — The 500 munitions discovered throughout Iraq since 2003 and discussed in a National Ground Intelligence Center report meet the criteria of weapons of mass destruction, the center’s commander said here today.

“These are chemical weapons as defined under the Chemical Weapons Convention, and yes … they do constitute weapons of mass destruction,” Army Col. John Chu told the House Armed Services Committee.

The Chemical Weapons Convention is an arms control agreement which outlaws the production, stockpiling and use of chemical weapons. It was signed in 1993 and entered into force in 1997.

The munitions found contain sarin and mustard gases, Army Lt. Gen. Michael D. Maples, director of the Defense Intelligence Agency, said. Sarin attacks the neurological system and is potentially lethal.

Pretty remarkable, considering that it’s a supposed article of faith that “there were no WMDs found in Iraq.”

Readers of this blog already know better.

For those who wish to whine that the items under immediate discussion at the link are from the 1980s and may be of dubious effectiveness, and that they therefore don’t “count” (with the whiners pretending to be more expert than the witness quoted), my response is “YOU are the ones who got sloppy and said there were NO WMDs, with no exceptions, and no redefinitions. Therefore, YOU were, and are, WRONG.”

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UPDATE, April 19 (actually entered in early June based on seeing this entry at Atlas Shrugs): Melanie Phillips on Dave Gaubatz — “I Found Saddam’s WMD Bunkers”

UPDATE 2, June 16: More on Gaubatz (saved to host hard drive) at “Iraqi WMD: A Deadly Cover-Up?” by Gerald Flurry –

Gaubatz later found out from Iraqi, cia and British intelligence that the wmd had been excavated by Iraqis and Syrians, with Russia’s help, and transferred to Syria. “The worst-case scenario has now come about,” the Spectator wrote. “Saddam’s nuclear, biological and chemical material is in the hands of a rogue terrorist state — and one with close links to Iran.”

From Boston.com and the Boston Globe:

MIT looks to reach an epic milestone soon: By the end of the year, its entire curriculum should be available online for free.

Scholars – and amateur scholars – are coming in droves; this month, the site could receive 1.5 million visits.
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“It’s exceeded our expectations,” said Anne Margulies, the official at the Massachusetts Institute of Technology who heads up the online curriculum program called OpenCourseWare.

MIT began putting courses online in 2001; more than 1,500 are already available, and all of its 1,800 courses should be posted by the end of this year.

So far, the most popular online course has been an introduction to electrical engineering, Margulies said, but visitors to the site can also school themselves on such subjects as cell-matrix mechanics, holographic imaging, hip-hop, and “How to Make (Almost) Anything.”

Courses that include video presentations tend to draw online crowds, and popular courses include Linear Algebra, Physics I, and Principles of Macroeconomics.

MIT students use the site to take practice exams and to help them determine which courses to take next semester.

Even so, roughly 60 percent of visitors to the site come from outside of North America, and about half are what MIT calls “self-learners” – folks who are neither students nor educators but are presumably drawn to MIT by the sheer joy of learning.

Other US universities are putting some of their courses online; many offer what might be deemed a “Greatest Hits” approach to the online curriculum; but to Margulies’ knowledge, MIT is one of only a handful of universities on the planet that seeks to make its entire catalogue of courses available on the Internet.