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The absurdity is astounding.
Really.
From today's WSJ:
"A blue-ribbon committee on financial regulation has called for better protection of auditors, company employees and outside directors from prosecutors and lawsuits, and less-detailed rule-making and lower-key investigations.
The Committee on Capital Markets Regulation's report, to be released publicly today, is one of the most high-profile efforts to date to address concerns that excessive regulation -- much of it a response to recent corporate scandals -- is adding to corporate costs, stifling the public securities markets and causing the U.S. markets to lose business to foreign competitors.
"The United States is losing its leading competitive position," the 148-page report says. One reason is "the growth of U.S. regulatory compliance costs and liability risk."
The committee is directed by Harvard law professor Hal Scott and co-chaired by former White House adviser Glenn Hubbard, now dean of Columbia University's business school, and John Thornton, former president at Goldman Sachs Group Inc. and now chairman of the Brookings Institution. The group's recommendations for the most part either parallel efforts already under way or would require a different implementation of existing laws, primarily by the Securities and Exchange Commission. Only a few would require new legislation.
Treasury Secretary Henry Paulson is likely to welcome the report; the former chief executive of Goldman Sachs already is advocating many of its recommendations and recently called for a broad re-examination of regulations and laws."
Yeah. Uh huh. I'll just bet.
What that means is that the Wall Street alumni, now working on the policy side, want to further rid the system of those annoying rules and regulations passed in 1934 after the Pecora hearings revealed to a nation that Wall Street was systematically robbing the country blind.
How unexpected.
We have the SIA spreadsheets showing the delivery failure crisis is at least 10 times larger than anyone would admit, we have an environment where companies are racing each other to do IPOs anywhere but the US, we have petitions with thousands of signatures, we have case studies of companies manipulated in an overt and flagrant manner, day after day, we have retirees and pensioners losing their life savings due to pure theft by the miscreants running the system, we have a captured NY press that refuses to acknowledge things like the aforementioned spreadsheet and the proof of the size of the crisis....and the solution is to take more cops off the beat, and free things up for the criminals.
And this gets top billing in the WSJ.
"It suggests the SEC act more like federal banking regulators, such as the Federal Reserve, which concentrate on the soundness of the financial system and less on individual acts of wrongdoing, "with less publicity surrounding enforcement actions." That would encourage securities firms to step forward when they find problems, it says."
Sure it would. Maybe if we decriminalized crack cocaine and merely used peer pressure on the dealers, that would encourage them to come forward and share their feelings with us rather than going on bloody drive-by rampages. Brought to you by the representatives of the Cali Economic Forum on Change.
Here's how Floyd Norris covered it. Note not much difference. Although he does bother to throw it the quote from the Columbia Law Professor who basically said it would set law enforcement back substantially. No kidding.
Somebody should ask Floyd why he has devoted so much space to this, and yet completely ignores the SIA spreadsheet that shows a massive delivery failure crisis of at least $63 billion (larger than anyone admitted, and likely far, far larger). Let me guess. "It isn't news?" Or maybe, "The numbers aren't conclusive?"
Yesterday, we saw a major step toward making one SRO under "Gangsta" Shelby's ex-hatchet woman, thereby eliminating any chance that the industry would seriously self-regulate; a laughable notion in the first place, but at least on the surface better than nothing. As Bud Burrell noted in his blog, this is setting a brick on the accelerator as we head toward the cliff, and climbing into the back seat to party while it lasts.
Today we have a self-serving bit of fiction from this Committee, recommending that the SEC be even further gutted.
Not that it would matter, given its complete and utter failure as a regulator, its co-opting by Wall Street, and the farce that is its history dealing with participant misconduct. Might as well leave the town drunk in charge of the liquor store.
It seems to me like we are entering some sort of an end-game. It's like the crooks have decided that they have nothing to lose or to fear, and have decided to go for broke, and just grab everything they can get their hands on. Get rid of the SROs ( a joke anyway) and the SEC as any sort of an enforcer (an even bigger joke), ignore the numbers they've lied about so long, and just get a brick, break the window, and steal the car, in full view of everyone.
Who's going to do anything about it? I mean, Cox is sitting, watching them knock out the windshield with the brick, but won't acknowledge it other than considering some rules to close possible car vandalism loopholes, in a very theoretical sense, of course. Congress is now in possession of data that shows the SEC to be compromised to the point of being part of the gang they are supposed to be policing, and has done nothing. The numbers now show that delivery failures are out of control, and large enough to threaten the very integrity of our markets (where have we been hearing the words "systemic risk" for years now?) and yet everyone is pretending that they can't hear the air raid sirens going off, or hear the carpet bombs shrieking toward us.
WTF is going on?
The Fed is an advisory group that ostensibly directs the private corporation that acts as our central bank. They are not a police force. The 1934 Act was not passed as a way to improve the efficiency of the stock brokerage business, or to protect the profitability of Wall Street. It was passed because an entire nation was outraged, after hearing in the Pecora hearings about every manner of theft, corruption, ethical violation, manipulation, larceny and dishonesty, and wanted someone to stop Wall Street from ripping off the country. A massive global depression had been triggered by the events of 1929, and the revelations from the hearings sparked a demand for major reforms.
What is being proposed now is to convert the police force, which has been gutted from within for the last few decades, into a rubber stamp system for the same crooks that pay fines on a weekly basis for, you guessed it, ripping off investors. They haven't stopped. If anything, they've picked up the pace. And as an aside, the SEC can't even be sure they even pay the fines. Their accounting and reporting is so bad they just can't be sure.
Wall Street scam artists are not genteel bankers or white-glove money changers. They are voracious sharks who view us as their food. They know no bounds to their dishonesty and greed. They would steal grandma's SS check if they thought it was worth the trouble, and laugh about it to one another afterwards.
And now, even as we discover that my most pessimistic and alarmist takes on the situation were actually naively positive when contrasted against reality, the bought-and-paid-for machine is soldiering forward to break down the last barriers between the barbarians at the gates, and us. The food. Defenseless, sold out by our protectors, and looking pretty succulent to the hungry hoard.
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In related news, Senator Grassley indicated that the info he's gotten to date confirms Aguirre's accusations that the SEC, rather than policing and investigating Wall Street bigwigs, instead acts as a personal concierge service for them, ensuring that their stay here is a pleasant one and that they aren't disturbed by things like insider trading investigations.
Here's the language Businessweek uses:
"Sen. Charles Grassley, R-Iowa, said in an interview that "we're expecting early next year to have all of this wrapped up." He said the evidence turned up so far in the investigation into SEC's probe of Pequot Capital Management was generally "supportive" of accusations by a former SEC enforcement attorney."
Generally supportive? Huh? Is that like saying it shows he was telling the truth, and the SEC was lying? In the way that gravity is "generally supportive" of things falling down, or footage of the killing fields in Cambodia is "generally supportive" of genocide?
Fortunately for the SEC, nobody seems to care that the rot is now bursting forth in pustules of corruption, for all to see. A new, bought and paid for Democratic Congress will replace the bought and paid for Republican majority, and business will continue as usual. How do I know?
Show me one article on the SIA spreadsheets. The one showing NYSE member firms' fails totaling over $63 billion, after pre-netting conceals a ton, and not counting any of the international clearing and netting.
You won't be able to. There aren't any. And Wall Street's solution to being caught red-handed stealing hundreds of billions is to recommend doing away with that nasty old SEC acting as a cop, and instead have them act as the policy-setting Federal Reserve Board, which oversees the one of the largest private corporations in the world - The Federal Reserve Banking System. How nice. So the SEC, which was set up to stop the crooks from ripping off investors, should behave more like the steering committee for our private central bank than as a police force chartered with stopping the crooks from brutalizing the country.
Maybe equip them with Nerf bats and have them swat errant billionaire brigands as they drive by in their Maybachs? That would show them.
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FOIA data is now available for Pegasus, Taser, and Inhibitex. Thanks again to Dave Patch, whose tireless work to ferret out the truth has again yielded gold. You can see it in the FOIA Data section of this website.
What do you think that data shows?
Take a guess. Really. Just go out on a limb, reach and stretch for this one.
And the SEC can't seem to find any evidence that SHO is a massive failure, and that companies and shareholders are being robbed blind by the system.
Wow. If only there was some sort of telltale sign, like FOIA data or SIA spreadsheets or something....
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Dealflowmedia will be hosting a seminar that will include discussion of Reg SHO. Seems like a worthwhile event. Check out the topics and the speakers.