Wall Street and small business Main Street are praising Pres. Trump’s plans to reduce and scrutinize government regulations. Actor Johnny Depp’s finances are a perfect fit for the President’s actions.
Government regulation is not all bad. The enjoyment of clean drinking water and access for the handicapped/disabled population are tied to regulation. Similarly, none of us would feel safe if we saw an airplane pilot bring a bottle of vodka into the cockpit.
But government regulations can metastasize into a bloated burden with little public benefit. One recent example was the rule requiring financial advisors charging commissions to put their client’s “best interests” first when giving advice on retirement investments, a rule that could blossom into an attorney’s dream. (“I lost money while my neighbor made money. I’m going to sue!”)
I’m not saying there are not some shady financial “professionals,” but they will be behind bars or won’t profit long from their greed if customers pay attention. And that brings us to the Johnny Depp case.
The actor has earned an estimated $650 million in the past 30 years, according to a New York Times analysis. Yet he is now faced with foreclosure on several of his homes and may need to sell a major asset – a small French village – to cover his debts. He also paid more than $5 million in interest on overdue taxes.
Depp blames his financial advisors. In a lawsuit, Depp says the advisory group he hired never paid his taxes on time for 16 consecutive years. In a countersuit, the advisors point the finger at Depp, saying he overspent (up to $2 million per month) on items like 14 homes, a chain of islands in the Bahamas, $30,000 per month on wine, and $3 million to blast the ashes of his favorite author from a custom-made cannon.
The advisors claim they told Depp to cut back on his spending, including the impulsive purchase of an entire French town, but that Depp responded to such pleas with excuses like “I need to give my kiddies and family as good a Christmas as possible.”
And here’s the real issue: Depp admits in his lawsuit that he was not paying attention to his finances or the investments of this financial advisory group.
Apparently, Johnny Depp is a better pirate than a normal human being. Depp refuses to accept that men and women should be accountable for their financial failings. If his financial advisors were tardy in paying his taxes after a few years, he should have fired them and hired someone who noticed deadlines. And if he wouldn’t adhere to their advice that he watch his spending more closely, he should have hired someone who didn’t annoy him.
If there is no evidence that the financial advisors lied to him or committed purposeful fraud, then Depp is the problem, not the victim. It was his right to spend foolishly and toss his “mad money” into projects that interested him. But when his finances turned sour, he should have looked in the mirror, not hire a lawyer.
If my financial advisor’s recommendations led to my losing money on a regular basis, I would quickly seek a new advisor. To be successful, a financial advisor must have satisfied clients who recommend him or her to their friends and business associates. It’s a simple concept; if you bought two Chevrolets which broke down soon after purchase, I doubt you would buy a third Chevy.
Last week, Pres. Trump asked the Labor Department to delay the rule regarding financial advisors. He wants to review it more closely. I don’t believe he needs any insight from Johnny Depp.