Comments on: How to fix the SEC Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: Big Al Sat, 13 Jun 2009 19:55:09 +0000 Reforming the SEC is a laudable goal, but “reform” carries different meanings for different constituencies of the SEC. Prior to deciding what actions we need to start effecting, we need to restate the mission of the SEC.

The stated mission of the SEC is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. We can’t protect the greedy or naive from making bad decisions although these people the mission of the SEC is to do so. We can’t facilitate efficient markets without financial innovation, although innovation often has unexpected costs.

The first step in reforming the SEC has to be to convene a congressional hearing to obtain a commitment of the Congress to support legislative changes to reduce political interference that has restricted the SEC in the past.

The next step would be to hold a series of public hearings before an appointed panel of industry and political representatives charged with delivering a report to be submitted to Congress that would outline changed needed in the SEC.

Having set forth the mission statement for the SEC, we would then need to discuss what the SEC does well and what functions the SEC does not do well.

Finally, we would need to agree on jurisdictional limitations of the SEC, the CFTC, FINRA and FERC such that the changed effected in the SEC compliment needed changes in the overall regulatory structure of the financial and commodity markets.

Anyone who thinks one or two tweaks in the SEC will bring about material or substantive changes is sadly mistaken. The problems within the SEC and the regulatory structure of our nation’s financial markets are too broad and too complex to be solved with a few cosmetic changes.

By: Ben R. Rodriguez MS Fri, 12 Jun 2009 21:39:29 +0000 Math as used for equation models, requires logical variables and limits. Same with theory of numbers as was presented by Dr. Fermat long time ago. Same happen for Differential Equations, some has singular solutions.
All I know, that these persons are trying to pin the frauds, to mathematical truth we understand.

By: MDF Fri, 12 Jun 2009 21:14:20 +0000 Goldstein’s points are nice, but don’t reflect much on reality. Most SEC enforcement work in Washington is trial-related. Not sure how moving those guys out to the burbs will necessarily help them prepare for trials in Washington or New York. On the other hand, the SEC inspections people actually are stationed in the SEC’s regional offices. (Are you confusing the two?)

Bank of America is regulated by the Fed, not by the SEC. Not sure why they would want to open an office in Charlotte. In fact, I think most SEC offices are in places where there are stock markets (Miami maybe being the exception).

And given that the SEC never tells anyone they are under investigation until they are hit by an SEC suit, how exactly would a company disclose they are under investigation? If you are a brokerage firm and get hit by a subpoena, that may only mean that your client is under investigation.

Fundamentally, your criticisms (along with those of a lot of other people outside of the law business) confuse what the SEC does. The SEC “investigates” fraud the way a prosecutor’s office does. It doesn’t investigate like the FBI does. As any securities lawyer knows, SEC “enforcement” is just a civil word for what on the criminal side of things is called “prosecutions”.

That said, the SEC does have an inspections arm, which is rather pathetic. But most of that is the result of funding. When the firms you regulate are numbered in the tens of thousands, and your examiners number in the hundreds, you’re going to have problems. In the UK, this problem is handled by the FSA providing the simple statement that if the firm isn’t in the top 15% according to size, they aren’t going to get looked at and any investor should be on notice.

By: David Fri, 12 Jun 2009 15:00:28 +0000 While I believe reporters play a significant role in monitoring government, from what I see reported on in the media (especially TV) is laughable.

I can think of 10 issues off the top of my head that have to do with fraud, waste,gross abuse or flaws in our system of government which need to be addressed, yet the media focuses on Ms. California, the latest IPod, or other such nonsense.

So while the SEC has its problems, so does the media.

By: Ian Kemmish Fri, 12 Jun 2009 14:20:25 +0000 How would talking to a mathematician convinced of the veracity, accuracy and robustness of his model have averted any of the recent brouhaha?

By: willie Fri, 12 Jun 2009 14:18:43 +0000 The SEC is a piece of garbage… — WorldCom, Tyco, Enron, Adelphia, — then they fired the guy in the mailroom (martha stewart) — what a joke… Now we have Madoff, Stanford, SEC lawyers trading on inside information; Bank of America’s ken lewis making millions trading on inside info (govt. will prop up BAC; not let it fail; guarantee its obligations, etc.) … Crooked Timmy and Helicopter Ben giving away billions of taxpayer dollars to their rich buddies so fast it makes the head spin… CEOs so greedy that it is mind-boggling… Completely dysfunctional Congress… President in bed with the richies… Our country has been turned into a third-world banana republic…

By: John P. Crowley Fri, 12 Jun 2009 14:16:18 +0000 Having spent 37 years in the securties industry working in some facet of compliance, your recommendation rings true. I have represented groups of investors in arbitration as well as filed formal compliants on their behalf with the SEC. Particular to the SEC, is there a pattern of concern at Enforcement as to whether or not any of the petitioners have friends in high places. It is a total disgrace and a waste of taxpayer funds, as the SEC seems committed to protectting the larger invetment firms and their illegal practices.

I for one, can’t wait to see the agency streamlined, then sent on the mission of enforcing the laws so brilliiantly crafted by Joe Kennedy. If the old man had a legacy to the public, it was his ingenious crafting of the Acts of 1933 and 1934. Lets begin to enforce them!!