Schumer Plays It Safe Before Shareholder Activists

Senator Chuck Schumer, a Democrat from New York, could have covered a lot of ground last night, when he gave the keynote speech to attendees at a global shareholder activism conference.

Most of the people gathered for the party at the New-York Historical Society were plaintiffs' lawyers or their public-pension fund clients --- most of whom have serious problems with the way Securities and Exchange Commission Chairman Christopher Cox has not been an advocate for investors.

Or Schumer could have stirred the pot by talking about the report he wrote with New York City Mayor Michael Bloomberg recommending a move toward arbitration rather than litigation to resolve securities disputes and imposing a cap on auditors' liability.

Or he could have revisited the report's lament that London, rather than New York, was the epicenter of the largest initial public offerings Initial Public in 2005.

But this is an election year and Schumer kept the conversation light and on message for the Democratic Party. "I really do think this election could be a seminal election," he told the crowd, as the hors d'oeuvres were being passed amid a couple of historical society sentinels dressed as Colonial patriots.

Schumer told a few jokes about his father, an exterminator who in his later years retired to Florida but didn't take to golf.

The Senator also related the tale of Frank Ruggiero, a homeowner from Ozone Park, Queens, who lives in the same parish where Joe Torre's sister runs the parochial school.

Ruggierio had faithfully paid down his mortgage for 16 years when he got diabetes, needed quick cash, and decided to refinance. He took out $50,000, and from that received $5,700 in cash, while the mortgage broker walked away with $22,000 in fees. "Because the company that employed him was just like Countrywide," Schumer said.

The rub: Ruggiero had a credit score of 780. "Had he walked into a bank, he would have gotten a prime loan," Schumer said, complaining about President Bush's opposition to legislation proposed by Representative Barney Frank of Massachusetts to rein in lenders' worst practices and give some relief to homeowners facing foreclosure.

But the administration's "ideological" opposition to government involvement in markets stands in the way, he added, and that "is making this crisis far worse than it has to be."

Schumer signed off by saying that the 2008 election would have positive implications for a "strong federal government."

"I don't think we're going to have a Mr. Cox as head of the S.E.C. when that happens," he said. And with that, the attendees headed to dinner.

by Karen Donovan