The SEC should include a strong enforcement mechanism by allowing investors to sue advisers who scam them. When someone is cheated by their doctor or lawyer, they can go to court. There's no reason that families shouldn't have the same option when their life savings are at stake. (Photo: Diego M. Radzinschi/ALM)

(Bloomberg Opinion) –Your lawyer can't take money from your opponent to give you bad legal advice. If you're on Medicare, your doctor can't take kickbacks from drug manufacturers for prescribing their drugs. But, under current law, your broker-dealer can receive monetary rewards and other perks for recommending certain investment products, even if those products aren't in your best interest.

Each year, Americans lose billions of dollars because of brokers who are looking out for their own financial interests instead of their clients'. The Securities and Exchange Commission recently proposed a new set of rules, supposedly to address this problem — but the SEC has fallen far short of giving American families the protection they need and deserve.

The SEC's proposal claims to address the broker conflict-of-interest problem by stating that brokers must act in the “best interest” of their clients. But the proposal doesn't define what that means, creating confusion for investors and brokers and leaving the possibility that judges and corporate lawyers will chip away at the standard over time.