Posted by
robjh1 on Friday, March 13, 2009 12:00:00 AM
The SEC (Security Exchange Commission) was created in 1934 to restore the public's confidence in the stock market after the Great Depression in 1929. Its mission statement: to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
Since its formation, nearly 74 years ago, a few things have been consistent. Among them the SEC has steadily grown in bueaurcracy and has done little to nothing in keeping the markets clean and stable. Every decade since the SEC's birth there has been scandal after scandal after scandal. Each scandal has gotten larger and more sophisticated than the last. To name a few of the recent scandals: WorldCom, Enron, Andersen, Aldephia, Xerox, Tyco, Global Crossing, Drexel Burnham (Ivan Boesky), Kidder Peabody and now Bernie Madoff. The list is still growing as this piece is being written and read.
One of the biggest problems with the SEC is its management. The guys running the show are former Wall Streeters, who know the tricks of the trade. They leave Wall Street to work in government _ helping to create laws to regulate the Streets. Next these guys re-enter the public sector to make money; all the while being fully equipped with the know how on how far to push the buttons without getting caught by the laws they helped create. (A new meaning of the fox guarding the hen house).
These guys, not to mention while working in government, give each other passes on really monitoring their friends companies on Wall Street, unless of course the friend becomes an enemy.
So with all this going on why do we have the SEC?