I've long contended that the SEC is criminally useless, and in many ways even aids and abets corporate fraud. If you agree then you'll enjoy the following exchange between Matt Taibbi and Elliot Spitzer where Taibbi lays out a number of cases that have been handed to the SEC on a silver platter and the Commission has done less than nothing to see justice served.
But they're more than happy to spend their time and resources closing defunct penny stock shell companies to give the appearance that they're actually doing something. When is America going to wake up and demand that some heads roll?
The video isn't working for me
works for me fine
The SEC is the local police of the financial industry. They (ineffectively) enforce insider trading laws and disclosure requirements...even then, the odds of getting caught are miniscule. But if the issue is at the national level, don't expect them to get involved.
The system doesn't collapse due to insider trading. Raj could have carried on for decades and nobody would be the wiser. Even Madoff-ian frauds are not a serious threat to financial stability. But these are the things the SEC actually enforces.
You had me at the title. Throw in the PCAOB.
the smart employees of the SEC are angling for exit ops at BBs, not at penny stock boiler room rackets. in that light everything they do (and don't do) makes perfect sense.
America tends to wait for a disaster before making real systemic changes, it's just how we roll. Strange part is that after the last couple of years, nothing has really changed...it's almost like they WANT a collapse. Point in case: why has not a single party involved in the whole financial blowout gone to prison, let alone been prosecuted??? The gov't can pretend that its doing its job, but this is only going to lead to another blowout.
I think melvvvar put it well as young people can learn a lot about financial servies working at a government or government-sponsored agency and then effectively parlay that into a nice private sector career or entrance into a good business school. Quite a few of the people who I went to B-School with worked for Fannie, Freddie, OCC, Treasury, SEC, FDA, etcetera for a few years, went back to school and now work somewhere in private-sector finance, many in IB or equity research.
Having spent so much time in the military, I can tell you that governement people are held much less accountable than those in the private sector. In terms of the financial crisis, there were many causal factors across many institutions but I find it interesting that the governement agencies involved seem to take much less than their fair share of the blame. Multiple private sector entities went down or were bailed out and many of our friends and colleagues lost their jobs, so where are all the heads that should have rolled out of FNMA and the SEC???
As UFOinsider said, government people are great at pretending to do their job.
^ SBs for both of you
So I guess it's time for me to found a private sector regulatory agency. There's a new sheriff in town, bitches.
at least we have a good rating agency: Egan-Jones. and based on how many times they have been raided by the italian police for retaliation purposes, i'd say they are doing a good job.
I think Harry Markopolo's book, No One Would Listen drives it home with how useless the SEC is. I love how he had no shame in name dropping some of the degenerates that were handed the Madoff case and did nothing with it.
Why even depend on ratings agencies for the determination of what is Tier 1/2/etc capital? Why not just index it to a bps spread over LIBOR or treasuries? So, if the bond markets are trading securites in certain bands then that would determine their relative quality.
How rediculous is it that the US is not considered AAA by some ratings agency, yet the bond market trades them at what could end up being negative real returns (depending of course on inflation).....
Here's Matt Taibbi's article for those who can't see the video... http://www.rollingstone.com/politics/blogs/taibblog/sec-taking-on-big-f…
Reminds me of that "Infectious Greed" book from a few years ago (pre-Lehman).
I agree with all that's been said about the ratings agencies. The day the S&P downgraded US debt last summer, Warren Buffet outspokenly (and correctly) derided the ratings agencies, calling them useless, uninformed, etc...the next day, unsurprisingly, S&P downgraded Berkshire. It also just so happens that Buffet was named the most effective CEO in terms of share price appreciation today. Ha. I have a hunch the ratings agencies are full of chumps who couldn't get into IB / any useful aspect of finance.
The government could do us all a favor by shedding non-essential functions and letting the private sector do it properly. Anyone think the private sector could do a better job than the gov't does with the DMV? Of course, S&P et al aren't the best ambassadors... But we'd probably be even worse off if gov'ts ran credit ratings.
You guys think the private sector will do a better job at running the SEC? They run it now, isn't that the problem!
Oooohhh...I see what you did there.
Ratings agency only matter because the market trades on their meaningless determinations. Thats it. They downgrade X, you see the markets move accordingly. Beyond that, no one that knows anything pays the least bit of attention.
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