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

DATE: SUNDAY, March 27, 1994                   TAG: 9403250207
SECTION: BUSINESS                    PAGE: F-4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

SEC, WALL STREET ASK THE LITTLE GUY'S ADVICE

The Wall Street watchdog agency is making a fundamental change in its focus "to make the SEC more consumer friendly," chairman Arthur Levitt Jr. said earlier this month. A dozen securities regulators and exchanges, including the SEC, have begun a concerted effort to educate investors as a way of protecting them from fraud. The agency also plans to solicit investors' advice on their concerns.

"In a very real sense, we are first and foremost a consumer protection agency," Levitt said in remarks prepared for a speech to the Consumer Federation of America.

Levitt announced the public awareness campaign, which included:

Creation of a 15-member advisory committee to assist the SEC in determining individual investor concerns and helping to resolve their complaints.

Distribution of a free brochure, "Invest Wisely," aimed at giving candid advice to investors and outlining the fundamentals they need to know before they hand over their money to a broker;

Reorganization of the SEC's traditionally low-key Office of Consumer Affairs and elevating its status within the SEC hierarchy.

Levitt told reporters the initiative "symbolizes fundamental changes in emphasis" at the SEC, which was created by Congress in the years after the 1929 stock market crash to ensure the markets operate fairly and openly.

Levitt has advocated a more consumer-oriented SEC since taking its helm last summer. But the changes also come as attention shifts from the Wall Street buccaneers of the 1980s to scandals involving employees at big-name firms accused of illegal or unethical practices.

Prudential Securities last fall agreed to pay $41 million in fines and set up a $330 million fund for investors who claim they were misled about investment risks by the firm's predecessor, Prudential Bache Securities, in the 1980s.

And Kemper Financial Services agreed to pay $10 million to settle regulators' lawsuits concerning the management of two mutual funds.

"The individual in our markets is also a consumer," said Levitt, adding: "It's the consumer that's our ultimate purpose."

The advisory committee includes representatives from consumer groups, investor organizations, universities and the financial industry. Among the members are former star mutual fund portfolio manager Peter S. Lynch; Helen Boosalis, a board member of the American Association of Retired Persons and Barbara Roper, director of investor protection for the Consumer Federation of America.

The 12-page pamphlet, with advice such as "Never invest in a financial product that you don't fully understand," also contains the names and phone numbers of state, federal and industry regulators consumers can call with complaints.

\ ADVICE FOR INVESTORS HERE ARE TIPS FROM "INVEST WISELY," A BROCHURE OFFERED BY THE FINANCIAL INDUSTRY AND THE SECURITIES AND EXCHANGE COMMISSION: Never invest in a financial product that you don't fully understand.

\ Never send money to purchase an investment based solely on a telephone sales pitch.

\ Remember securities investments, including mutual funds, are not federally insured against a loss in market value.

\ Be wary of recommendations from a sales person who says he has `inside information.' If this were true it would probably be illegal.

\ Stay clear of guarantees that you will not lose money or that your money is going to double in six months.

\ Read your account statement carefully. An excessive number of trades could mean your broker is trying to make extra commissions at your expense.