The SEC is unsalvageable

By Felix Salmon
May 7, 2009

This is one of the driest pieces of prose you’ve ever seen: a 64-page report from the Government Accountability Office on the subject of the SEC, entitled “Greater Attention Needed to Enhance Communication and Utilization of Resources in the Division of Enforcement”. The “Results in Brief” spreads over six pages and is full of stuff like this:

While Enforcement had demonstrated success in carrying out its law enforcement mission, significant limitations in the division’s management processes and information systems hampered its ability to operate at maximum effectiveness and to use limited resources efficiently, and may have contributed to delays in Fair Fund distributions.

In other words, you’d have to be bonkers to try to read the whole thing.

All hail, then, the mighty Moe Tkacik, who has not only read the report but has distilled from it a picture of such utter dysfunction and managerial incompetence that her blog entry should be required reading for anybody who thinks that the SEC can conceivably be turned into an effective regulatory institution.

What’s entirely clear from Moe’s report is that you’d have to be a masochist of the highest order to work at the SEC. Since we don’t really want our capital markets run by masochists of the highest order, there’s a massive problem here. And I don’t think that there’s any feasible solution.

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