Newspaper article St Louis Post-Dispatch (MO)

Wall Street's Senator Brokerages like D'amato's Rise

Newspaper article St Louis Post-Dispatch (MO)

Wall Street's Senator Brokerages like D'amato's Rise

Article excerpt

Wall Street loves Sen. Alfonse M. D'Amato, R-N.Y., the new chairman of the Senate Banking Committee, and it's not hard to see why.

Not only does D'Amato talk like an aggressive bond trader, but by his own admission he also pushes the securities industry's interests.

"I make no apologies for that," says D'Amato, who Thursday began began two days of hearings on financial "derivatives," the potent and sometimes risky investments that helped bankrupt Orange County, Calif. "I look upon the securities industry as important to the country and New York."

As new head of the committee - which oversees not only securities firms but also commercial banks, thrifts and insurers - D'Amato suddenly finds himself in a powerful position to help refashion the entire financial and regulatory landscape. He has close ties to Wall Street's largest firms, whose members have been big contributors to his campaigns for years. And many now expect him to reward those faithful supporters.

One Wall Street backer says of the New York Republican: "The old joke is: D'Amato's loyalties are to his constituents, himself and his country, in that order. That is not far from the truth."

D'Amato insists that as head of the banking committee, he will balance Wall Street's self-interest with the needs of customers, competitors and taxpayers. But his agenda is in large measure Wall Street's. For example:

While he would encourage regulators to tackle the Orange County problem - by prohibiting such taxpayer-supported investment funds from speculating in risky bets like derivatives - he opposes legislation that would hold the dealers who sell the derivatives accountable for shoddy sales practices.

While he would protect the rights of customers to sue brokerages if they have been "legitimately damaged," he wants to limit "frivolous lawsuits" by attorneys for such customers.

While he favors allowing banks into the lucrative securities business, he would but not let them use taxpayer-insured deposits to fund the new activities.

While he wants the Securities and Exchange Commission to get tough with unscrupulous brokers, he is also creating a special subcommittee to ease the "regulatory burdens" imposed on the industry by Washington. …

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