Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, September 26, 1995                   TAG: 9509260068
SECTION: EDITORIAL                    PAGE: A-4   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

PROTECTION

We're not talking about how industry lobbyists were invited to rewrite federal regulatory reform legislation. The GOP also has some explaining to do on legislation, introduced by the chairman of the House Telecommunications and Finance subcommittee, that supposedly would "reform" securities regulation.

Introduced by Rep. Jack Fields Jr., R-Texas, the bill is so strongly anti-regulatory that Wall Street executives, whose interests it was designed to serve, are themselves worried that it would remove investor protections which have built worldwide confidence in the U.S. securities markets. To undermine that confidence is to risk destroying an enviable position in the global money marketplace.

Chief among the bill's sins is that it would greatly reduce the power of state securities regulators, leaving them little more authority than to enforce looser federal laws and standards. States, though, often are the first to see investor rip-offs and unfair practices, and many respond quickly to protect investors.

The almost-worthless limited partnerships sold by Prudential Securities in the '80s, for example, were exposed by state regulators, who have returned $768 million to investors, Money magazine reports. Only after these state cases revealed a nationwide pattern of deceptive practices and investor losses did federal regulators take note and investigate.

Almost one-third of American families invest their savings in stocks, bonds and mutual funds. If there is any doubt who offers the greater protection of their interests and the financial security of their families, consider: The federal Securities and Exchange Commission opened 497 enforcement cases last year. States opened 6,379.

There are other faults in the bill, as well - so many, in fact, that the alarms sounding from Wall Street have caused Fields to back off. He told the Los Angeles Times this month that he never intended for the bill to pass as written, but only to get debate going on revising securities laws.

Yet Money reported that the measure is the centerpiece of what Rep. Thomas Bliley Jr., R-Va., chairman of the House Commerce Committee, called "a fourfold effort in the securities area to lower costs for capital formation."

Since becoming the top-ranking Republican on the telecommunications subcommittee in 1993, the magazine reports, Fields has received more than $220,000 in political action committee contributions from securities, banking and insurance groups. Bliley has received more than $125,000.

Regulatory reform, health-care reform, litigation reform, securities reform ... maybe the best thing for all these would be to start with another reform: of campaign finances.