On October 10, 2006, Bloomberg ran a long and important story about how insider trading was endemic in the CDS market. Now, 31 months later, the SEC has finally brought its first insider-trading case involving CDS, and it’s a rather small and unimpressive case at that. What’s more, the SEC still doesn’t seem to have nailed down jurisdiction in these issues.

I know that regulatory agencies move slowly, but this only serves to underline the fact that the SEC should emphatically not be the main regulatory agency charged with overseeing the functioning of the financial markets.

Update: The WSJ got there even earlier than Bloomberg, in August 2006.