Companies, he says, "focused on the customer, not on selling products that generate profits for the firm. Now there's a lot more focus on greed, and I have a problem with that because that means you're going to disregard the public interest."
Lambiase, director of securities and business investments for Connecticut's Department of Banking, has an even bigger problem--accountability. "With the big cases, name me the individuals who were identified," Lambiase says. "The company will pay a $200 million fine, but they want to settle the case without any liability, and I think that's wrong. Prosecutors need to focus on who was guilty, even if that means less settlement and more litigation." To federal regulators who spend too much time debating yet another rule, he has this advice: "Don't just sit there for the purpose of creating rules--confront the behavior."
He believes "regulation has become a safe harbor for the big firms" and has shifted the focus away from the individual investor. Over-regulation has also made it harder for the small firms that dominate the industry. "I just don't think you need as much regulation as we have. How about this as a rule?" he suggests to company compliance officers: "Don't lie, cheat or steal--and enforce it."
Lambiase has worked in his state's securities office since 1978 and became head of the division in 1988. Before that, he worked at the Pacific Stock Exchange, where he tracked trading volume to monitor enforcement problems.
While he is light on the penalties ($538,550 in 2004), Lambiase has brought more than a few enforcement actions--69 in the same year. Just as significant is the money he got back for investors: $4.2 million in restitution. And take a look at the case involving LH Ross & Co., a Boca Raton, Fla.-based company accused of perpetrating a classic "pump and dump" scheme. After the firm ignored several administrative orders, his securities division in January imposed a fine of $420,000 and permanently revoked the broker-dealer's license.
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