The SEC desire to self-fund, revealed in an interview of SEC chairman Mary Shaprio in an interview with the Financial Times, is a far bigger deal than it might appear. One of the reasons for the agency’s less than impressive performance in pursuing fraud is that Congress kept it starved. For instance, Arthur Levitt, SEC chairman from 1993 to 2001, has been criticized, correctly, for having been far too friendly to the industry as far as derivatives regulation was concerned. And that was not simply his joining in hte assault against Brooksley Born’s efforts to regulate credit default swaps. Frank Partnoy tells in gory detail in Infectious Greed that Levitt also fought reform measures in 1995, when a wave of widespread derivatives losses (of which Orange County was on of many examples). Yet in his memoir, Take On the Street, Levitt describes how he was beaten back aggressively by members of Congress, particularly Joe Lieberman, on efforts to improve the transparency of accounting and analyst objectivity. Their weapon of choice? Cutting his budget.
Given the SEC’s de facto politicized role, it has to pursue cases that fit within an enforcement budget that is smaller than it should or could be, given the fees the SEC collects, and also forces it to justify the expenditures it does make. That means the SEC winds up pursuing cases that are easy to prosecute and have high headline value. Complex frauds do not fit that template, for they are resource intensive.
From the Financial Times:
The US Securities and Exchange Commission should fund itself directly from industry fees, a system that would allow it to tackle more complex investigations and invest more in technology and skilled people, Mary Schapiro, its chairman, told the Financial Times.
The SEC rakes in more than $1bn annually in registration and transaction fees but, unlike other US financial regulators, cannot spend any of it without going to Congress each year to have its budget approved. That has made it difficult to plan ahead and invest in multi-year information technology projects…
“Self-funding will help us to avoid periods of drought,” Ms Schapiro said. “Think about what the markets were doing in terms of growth and innovation at the same time the SEC was in a hiring freeze.”
US banking regulators, including the Federal Deposit Insurance Corporation and the Federal Reserve, can use what they collect in fees, deposit insurance premiums and interest income. The UK Financial Services Authority is entirely self-funded.
The SEC expects to collect $1.3bn in 2009 but may spend only the $960m authorised by Congress. For 2010, the administration has asked for a budget of $1.026bn, though the SEC expects to collect $1.5bn in fees.
Senior Democrats in Congress are divided on the regulator’s future funding.
Yves: I am firmly against any law enforcement agency being self-funded. Even if I agreed with your desecription of the outcome, poor enforcement, we at least can hold elected legislators to blame. With a self-funded law enforcement agency they WILL become oriented to those actions most likely to provide revenue and will become independent of legislative oversight.
How would you control the FBI if it was self-funded from its actions?
I agree firmly with redst8r on his rationale.
Moreover, just how good was the self-funded UK in regulating their jurisdiction? How effective has the nominally Fed been in its role to date?
There've been more than enough stupid and ineffective proposals thus far. We really don't need more of them
Yes, keeping the SEC's budget small hampers what they can do – no question. But when Markopolos proposed rewarding SEC fraud-hunters with some kind of bounty arrangement in his congressional testimony about Madoff to congress, I was uneasy. I'm sure at first we'd get more prosecutions of criminal investment firms. But in the end I fear it will become a white-collar version of the confiscation policies for drug crimes that lets law enforcement seize assets like houses and cars.
Incentivize something, and you'll get more of it. Look at something as relatively innocuous as small town speed traps funding their 2 officer police departments. Now imagine this writ large in an already highly corrupt and out of control regulatory and enforcement environment. Yikes.
So redst8r, your counter-proposal is . . . ? It seems evident that we need more efficacious financial regulation. That will not come from Congress: they are too compromised, i.e. bought into office. Yes, if self-funded the SEC might go where it chose. It's only up from where we are, any intervention would be an improvement. If the public then feels that regulation is not evenhanded, the argument would be to go back to the Legislature and ask for more comprehensive investigations. We have an ocean of misfeasance and outright criminality; time to give someone a bucket and get to work, methinks.
redst8r and Anon of 12:44 AM,
I suggest you educate yourselves about the authority of the SEC. First, it is not a "law enforcement agency." It cannot issue warrants or arrest people Second, it cannot even bring criminal cases on its own, it needs the support of the Department of Justice. Third, this is a country of law, at least nominally. Civil and criminal cases are subject to judicial due processes.
Is anyone aside from Markapolos advocating bounty hunters? That's a straw man. That is not what Shaprio is taking about. As for the FSA, the UK was engaged in trying to out-compete the US on the lax regulation front. Having said that, they didn't seem to spawn any Madoffs or Sanfords, so I am not so certain that the case against the FSA is as convincing as you suggest. The big collective failure was to let the financial system get so levered, and in the UK, that was more in the Bank of England's turf than the FSA's.
Agreed that the SEC has no law enforcement power. However, the people they take on will nonetheless be the ones that are easiest and cheapest to fine. This would not be GS or JPM or anybody else who can afford to have a team of lawyers on staff. For God's sake, you're talking about an organization that can't be bothered to even get a company to admit wrongdoing in the most egregious of cases!!
This leads to the incredibly bizarre case of Madoff, who should have been caught a long time ago. Having said that, it's absurd (no offense intended) to claim that the SEC didn't go after Madoff because they were worried about their budget. Nobody in Congress (or anywhere else, for that matter) would have threatened to cut SEC funding for discovering Madoff earlier–especially after being tipped off. In fact, the SEC, ever interested in getting cheap fawning headlines, would have fallen over themselves to claim credit for this were it not for their sheer ineptitude. You can argue that it had to do with lack of political will from the SEC's political masters who appointed them–fine. But that political will would have not been there even if the SEC could grab a fine. I don't recall SEC informing Justice about Madoff before 2008 either, for that matter.
As for the UK trying to out-compete the US–please explain how that would have been any different had the SEC been self-funding.
"The big collective failure was to let the financial system get so levered, and in the UK, that was more in the Bank of England's turf than the FSA's."
Is the Bank of England not reasonably independent? Was the US Federal Reserve also not reasonably independent of political oversight (senators were kissing Greenspan's ass for over a decade, for crying out loud!!Bernanke has claimed with little repercussion that taxpayers shouldn't be allowed to see how blatantly he has been F!@#ing them over!!)? If so, why didn't they put a stop to all that leverage? If they F!@#ed up, why would the SEC do any better in their own back yard with more direct funding?
I wouldn't be too sure about the UK not spawning an Madoff's–I'd wait for the second major crash to hit before jumping to such conclusions.
who will hopefully not be the reason you start to restrict people from posting anonymously again
Anon of 12:44 AM,
With all due respect, your argument does not hold up.
Funding is a necessary but not sufficient condition for enforcement. Agreed there has to be political will too, but saying that people did not have the guts prior to 2007 is not a valid basis for making arguments about the environment now. Even Shapiro, who most had deemed to be industry friendly, is singing a very different tune, And as I pointed out, Levitt, who in retrospect has been deemed to have sided with the industry on some key issues, wanted to be far more aggressive in the SEC's traditional arena, and was stymied BY HAVING HIS BUGDET THREATENED BY THE SENATOR FROM HEDGISTAN.
The Markapolis matter points precisely to the types of matters the SEC intends to address. First, i can understand why they did not take his letter seriously. It come in over the transom. The guy was not able to get anyone with any connections to call the SEC and say, "Hey, I think you need to have a look. If he is right about this, it will prove hugely embarrassing to you." Letters from unknown parties are assumed to be people with a personal axe to grind,
Second, it was a dog's breakfast, some serious warning sign mixed in with stuff that was dubious. He would have done better to put his most serious issues forward, no more than 6, and stop. That is the mistake the 9/11 type make. They make a really big pile of factoids they find troubling and say, "See this is a huge pile! Something must be amiss!" The problem is a lot of that stuff is noise and is easy to discredit.
With Markapolos, some of his "proofs" came from options pricing and strategies, if I recall correctly. That is not an area of SEC expertise or supervision. That is the sort of thing they would beef up with more funding.
"but saying that people did not have the guts prior to 2007 is not a valid basis for making arguments about the environment now. Even Shapiro, who most had deemed to be industry friendly, is singing a very different tune, And as I pointed out, Levitt, who in retrospect has been deemed to have sided with the industry on some key issues, wanted to be far more aggressive in the SEC's traditional arena, and was stymied BY HAVING HIS BUGDET THREATENED BY THE SENATOR FROM HEDGISTAN."
OK, but saying that the Senate threatened to cut the SEC budget prior to 2007 is now equally irrelevant, as no Senator will currently be stupid enough to make such a threat over similar circumstances. The point is that should circumstances change and they're self-funded, they *again* won't have the guts to do anything. So why bother?
"First, i can understand why they did not take his letter seriously."
OK, so given the number of shady things that were going on by then, what did they do instead with their time?
The SEC is unlikely to beef up anything with more funding to sufficient degree that they can compete with private sector jobs. That's inevitable. You must know this. Surely you know that the SEC will not pursue JPM or GS or WFC under any circumstances. After CONSTANT criticism to the point of ridicule, they've sort of decided to maybe look at flash trading. (look here for a prize of a PR presentation: http://www.zerohedge.com/article/schapiro-opens-mouth-confirms-rumors-utter-cluelessness)
After BAC fiasco, they agreed to fine a company a laughably paltry amount of cash–just enough to get a headline, and yet nothing substantitive. After GE's been F!@#ing with their books–blatantly–for years, they get fined just enough after a long enough time frame to convince every other company that they should've done the same thing.
And yet they're gun-ho about chasing after–of all thing in this market–naked short sellers? Like, WTF??? Are these people leveraged 30:1 and threatening to destroy the financial system if they don't get multi-million dollar bonuses every year?
These people are blundering idiots, and giving them more $ and less accountability with how they use that $ is like giving a teenager a porsche and a bottle of scotch and telling him that it's better if his father can't influence him.
Sorry, Yves, but I just can't agree with you on this one. This agency has been incompetent for as far back as I've been following markets, and to only claim now, after a major crash and right before the next one, that everything would be all right if they had more funding doesn't wash.
In any case, this is all moot–the market's going to take care of this without the SEC, and there's not going to be a bull market in anything under the SEC's jurisdiction for a bloody long time.
Anon of 12:44,
You repeatedly set up straw men. Shapiro never said all would have been fine had she had more of a budget.
Moreover, the idea that a more stable, less beleagured SEC could not be more effective is simply counterfactual. Look at what Eliot Spitzer got done from a no-prestige, until he took it over, office. Look what Pecora, a mere no-name Italian immigrant, did. If you have discovery powers and keep digging, in the vast majority of cases you do not need expertise yourself, you need access to experts who will educate you. And plenty of people leave Wall Street mid career to do other stuff. For every Michael Lewis and Frank Partnoy, there are dozens of others who leave the industry, Yours truly is another. You don't need people who were MDs in these jobs, you need people with three to six years of experience to provide insight and guidance, and they don't need to be on staff, although some would clearly be preferable. so they'd be sensitive as to what to watch for. I know of some world class people who are giving input into investigations for free.
You have a very Wall Street centric view, , that everyone can be bought. Federal judges make far less than they would if they were in the private sector. Ditto State department employees, and there are some very good sections in the State department.
And contrary to your assertion, Goldman is being investigated.
In the Great Depression, it took four years to get durable reforms. We are only one year and a half past the fall of Bear, which is when I deem the crsis to have been undeniable. The lack of real reform at this stage is predictable. Not all the shoes have dropped. It is made worse by the fact that Obama is turning out to be a Herbert Hoover. Wait till the denial and market goosing stops working. They can't keep all the plates in the air that much longer.
Yves said: "You have a very Wall Street centric view, , that everyone can be bought."
Isn't this concept–that "everyone can be bought"–the linchpin of neoclassic economic theory?
As Amitai Etzioni points out in The Moral Dimension, Adam Smith was conflicted on this issue:
In "The Theory of Moral Sentiments" he observes that people act out of a conscience and are related to one another not merely via a market–in exchange relations, trying to maximize their interest–but also as people whose psychic well being is deeply denendent on the approval of others, which in turn is based on acting morally, not on enhancing wealth. "How selfish so ever man may be supposed, there are evidently some principles in his naure, which interest him in the fortune of others, and render their happiness necessary to him."
The fact that the position Smith in "Moral Sentiments" is not easily reconcilable with the one he took in "The Wealth of Nations" has genrated a small industry of writings interpreting the differences and generating ways to solve what has become know as Das Smith Problem.
Over the past few decades, however, these ambiguities were purged from orthodox economic theory. As Etzioni goes on to observe, "the fact is that neoclassists have labored long and hard to show that practically all behavior is driven by pleasure and self-interest." And in this endeavor, especially over the past 30 years, the neoclassists have had almost total success.
The neoclassicists of course had powerful Wall Street allies in achieving this triumph over classical economics. As Robert Heilbroner explains in The Worldly Philosophers:
But in Smith's panegyric of a free and unfettered market the rising industrialists found the theoretical justification they needed to block the first government attempts to remedy the scandalous conditions of the times. For Smith's theory does unquesitonably lead to a doctrine of laissez-faire. To Adam Smith the least government is certainly the best: goverments are spendthrift, irresponsible, and unproductive. And yet Adam Smith is not necessarily opposed–as his posthumous admires made him out to be–to all government action that has its end the promotion of the general welfare.
Marx believed as the neoclassicists did–that money explains it all.
The Frankfurt School offered some nice pushback to the neoclassicists, and to Marx. Robert Hughes writes in The Culture of Complaint:
Their (left-wing academe's) response to this trauma was to shift away from classical Marxism, with its emphasis on economic and class struggle in the real world, and embrace the more diffuse and paranoia-driven theories of the Frankfurt school—Theodor Adorno, Herbert Marcuse.
For these theorists, all human life was ruled by repressive mechanisms embedded, not in manifest politics, but in language, education, entertainment—the whole structure of social communication…
I don't know that all the members of the Frankfurt School believed that "all human life was ruled" by non-monetary factors. Certainly every school, every movement has its zealots and extremists. Daniel Yankelovich in Coming to Public Judgment gives a far less severe appraisal:
The guiding spirits…were…Max Horkheimer, along with Theodor Adorno, Herbert Marcuse, Erich Fromm, Leo Lowenthall and others, and after the war, Jurgen Habermas.
This group of seminal thinkers drew upon the insights of Kant, Hegel, Marx, Lukacs, and Freud for their social theory. From Kant and earlier thinkers they used the concept of critique to indicate rational analysis as opposed to religious revelation. Following Hegel they added the connotation that critique should conern itself with a broader set of constraints than those relating solely to knowledge. They also incorporated Marx's concept of critique as reflected in his "Critique of Political Economy." In this work, Marx focused on unmasking the constraints imposed by class relations and elaborated his theory that much of the ideological thinking of his era mirrored the special insterests of the dominant social classes. Freud's insights made the Frankfurt theorists realize that Marx's orientation was overly restrictive. Freud convinced them that the critique of ideology should also examine unconscious motivations unrelated to the clashing economic interests of social classes.
Culture warriors like Henry Louis Gates, Jr. and James Dobson want to make it all about the unconscious motivations. Economic warriors like Ayn Rand and Marx want to make it all about money. The truth of course lies somewhere in between.
@Richard Kline: my counter proposal is … work through the legislative process to improve the funding if that is the desired outcome. That is supposedly how our democratic republic works.
@Yves Smith: it isn't necessary for me to have alphabetic understanding of the vast expanse of the US government. I oppose – despite your cogent arguments to the contrary – the principle of any law enforcement / investigative agency / regulatory body / et. al. being self-funded.
It is the responsibility of the legislative branch to provide the appropriate funding for all aspects of the government. If we don't get the funding as a majority desires then it is our obligation to change the legislature. I am opposed to the numerous attempts (many successful) to self-fund, isolate funding (SSA trust funds, transportation, etc.) that simply decide the legislative process is faulty therefore, ipso facto, we must craft a political work around.
When do we stand up and simply say, the legislators are wrong in their decisions, we must change the legislators? Yes, it is hard, probably won't change much or fast but that is (or is supposed to be) our system.
Yep, I'm naive and ignorant about the real world inside the beltway. Sorry. But look at California if you want to see the end game of all these work arounds. It ain't pretty.
Yves: "Is anyone aside from Markapolos advocating bounty hunters? That's a straw man."
I went back and re-read the article. You're absolutely right, "registration and transaction fees" are a long, long way from bounties or asset seizures. I had not meant to be advancing a straw man argument – I was just looking ahead to possible extreme scenarios and worrying about their outcome, taking my cue from the commenters who responded before me. I am still concerned about introducing privateer-type incentives, and I fear abuse of the kind I suggested. I agree Shapiro is not talking about these.
Yves: "so I am not so certain that the case against the FSA is as convincing as you suggest."
I re-read my comment a few times to make sure, but I did not mention the FSA – I think you were moving fast and confused my comment with the one above mine. (To be perfectly honest, I had to look up what the FSA is.)
Yves: "The Markapolis matter points precisely to the types of matters the SEC intends to address. First, i can understand why they did not take his letter seriously. It come in over the transom. The guy was not able to get anyone with any connections to call the SEC and say, "Hey, I think you need to have a look. If he is right about this, it will prove hugely embarrassing to you." Letters from unknown parties are assumed to be people with a personal axe to grind,"
I'm not in the SEC, so I can't say with authority why he was ignored – yours is certainly a reasonable sounding explanation. But if you read Markopolis' story about approaching the SEC (and reapproaching, and re-re-approaching) he claims he repeatedly felt he was getting not just interest, but traction and comprehension, at which point the SEC person he was talking to would say something along the lines of "This is very interesting, let me run this by my boss." After that, silence.
This silence to me is better explained by a regulatory culture that is some combination of coginitive capture and corruption, the exact nature of it varying from staffer to staffer, but the final institutional culture undeniably compromised and ineffective.
Yves: "Second, it was a dog's breakfast, some serious warning sign mixed in with stuff that was dubious. He would have done better to put his most serious issues forward, no more than 6, and stop. That is the mistake the 9/11 type make. They make a really big pile of factoids they find troubling and say, 'See this is a huge pile! Something must be amiss!' The problem is a lot of that stuff is noise and is easy to discredit."
I refuse to blame Markopolis for trying to exhaustively prove his point, presenting the circumstantial with the damning. And I disagree that this strategy is what's keeping the 911 truth movement from making their points effectively. David Ray Griffin's book _911 Contradictions_ is just the sort of effort you are advocating, a tightly focused subset of his larger arguments, focusing exclusively on the major contradictions in facts in the official story. It's a good book, but it's one of his weaker ones on the topic, because while the major arguments of the 911 truth movement are very solid, reading the raft of circumstantial evidence as well buttresses the main arguments and gives context and detail that can't be adequately explained away by claiming coincidence.
For example: Considered alone, it is merely interesting and suggestive that the SEC had offices in WTC building 7, and that many active cases were closed when the building suddenly collapsed at 5:20 PM in the afternoon on 9/11. Similarly, it is interesting that there was a very high volume of put options placed on only American and United airlines in the days before 9/11, originating from Alex Brown, the investment bank head at one time by CIA Executive Director Buzzy Krongard. The SEC's failure to investigate these put options because Alex Brown can't possibly be a terrorist organization reveals a troubling circular argument. Interesting, but not damning or utterly convincing.
But when you review the footage of WTC 7 collapsing in a manner precisely that of a controlled demolition, AND the forensic evidence of thermite, AND consider the utter failure of to investigate this in anything like an honest and open fashion, AND continue through innumerable other disturbing and troubling facts, it becomes extremely hard to stomach the official story. The circumstantial evidence is not sufficient on its own, but it reinforces and gives nuance and shading to the principal arguments.
Further reading: New Pearl Harbor, New Pearl Harbor Revisited, Debunking 911 Debunking. Further viewing: Loose Change Final Cut, 911 Mysteries Part 1 – Demolitions.
Lotta noise here.
Did the SEC write referrals to the Justice Department? What does the Justice Department require that a referral enumerate?
Now if the SEC is going to raise a billion plus in fees, but the Congress says it can only spend $.9 billion is that a real problem. How much does it cost to develop and write a referral? All this noise smells like a turf war and the hogs are more numerous than the trough is long.
Before we give the SEC more money and/or the priviledge of being self funding we had better get an accounting as to why referrals were not written. And if referrals were written why did the Justice Department not pursue them?
Yves: Look at what Eliot Spitzer got done from a no-prestige, until he took it over, office.
Spitzer, like Giuliani before him, used his office as a way to get the political clout required to ascend to higher office. Is this what the SEC is to become? I guess it'd be a hell of a lot better than what they currently are.
Yves: I know of some world class people who are giving input into investigations for free.
Where were they a few years ago?
Let's get back to the SEC: these regulators have basically said that they are not competent enough to do their jobs with their existing resources. So now they want to grab money from people they fine. Now who are they more likely to investigate? Someone they can get quick money from, or someone with the resources to threaten a long, protracted fight with an uncertain outcome?
If resources and independence from Congress works, then the Fed should've done a brilliant job. They didn't (to put it mildly). But hey, if all they want is $ and independence from Congressional interference, why not join the Fed or Treasury departments? (the last one being a rhetorical question)
I do not agree with self-funding for the SEC. Perhaps if the SEC had an established tradition of doing its job and doing it well, there might be a rationale. But spending a billion dollars a year on an agency not to do its job is a waste.
So if the SEC wants to show that it is worth a billion dollars a year, it should show some results. We are certainly living in a target rich environment. However if the $15 million fine levied against Hank Greenberg for cooking AIG's books is any indication, it is still very much business as usual there. And that should come as no surprise. It is what most of us thought when we heard that Obama had nominated the unaggressive, business friendly Mary Schapiro as its chairperson.
In short, an adequate budget for the SEC should only be part of an overall reform of the SEC. Without such reform, we are simply throwing good money after bad. And to be honest, I do not see this type of reform taking place in an Obama Presidency.
The analysis above, I must say, is not based in fact or knowledge of what it takes to do in investigations.
First, an SEC commissioner who was keenly interested in certain types of enforcement was blocked by Congress and had his budget cut repeatedly. Bush SEC commissioners were BY DESIGN not pro enforcement. Resources were inadequate even under Levitt and have been frozen more or less since then. The SEC's failure to do much has been BY DEISGN due to its budgets being kept low by Congress.
Spitzer was very effective, but had also had two weapons the SEC lacks: the ability to bring crininal prosecutions, which is a huge weapon, and the Martin Act, which makes it easier for him to bring and win cases than any SEC legislation.
All the SEC can bring is civil cases. The Justice Department has to bring criminal cases. That isn't simply the matter of a mere referral; the DoJ has to decide it wants to commit resources. Complex frauds are very hard to prosecute.
In a civil case. a cash rich defendant can simply engage in enormous pit bull obstruction tactics. The usual weapon of the plaintiff is to get as much damaging information as possible in discovery. But that is very resource intensive. That means, for example, going through voluminous e-mail records, recordings, correspondence, and connecting the dots, as well as deposing people. You do not understand the resources required. And in a civil case, how do you prove the monetary harm causes, say by BofA not reporting that Merrill was deteriorating? You just get into duelling expert witnesses.
I suggest you contemplate what it takes to "prove" misconduct in a court setting.
AS for the Fed, it isn't a germane example, its statutory duties all relate to monetary matters, not enforcement, and given that that industry members have significant influence on its governance, it's no wonder it has been toothless. People who know DC like Chris Whalen say the FDIC is the most competent of the financial regulators, and it is self-funded.
First, an SEC commissioner who was keenly interested in certain types of enforcement was blocked by Congress and had his budget cut repeatedly
OK, so then what did he do after that? He still had a budget, and he presumably could have at the very least looked for things that would *not* have resulted in budget cuts.
So what worthwhile results did they produce?
and given that that industry members have significant influence on its governance, it's no wonder it has been toothless.
Why would a new SEC be any different?
This is like arguing with my girlfriend–you're both clearly much brighter than me (and correct more often than not), but I can't see how in this instance your arguments support the conclusion (in this case, SEC being self-funding).
People who know DC like Chris Whalen say the FDIC is the most competent of the financial regulators, and it is self-funded.
1) That's a post hoc ergo propter hoc argument (LOL–sorry, I couldn't resist using the only Latin I ever learned in high school, although I may have used it incorrectly). One doesn't imply the other.
And why did they not shut down Colonial? How about STI, PNC, and ZION? They too are, by and large, only chasing bit players and therefore, for all intents and purposes, pretty useless in the grander scehem of things.
While I am very reluctant to make the SEC self funding, the argument here is symtomatic of american politics and the two party BS that happens all day on TV.
Conservative: It has never and will never work, starve the beast off.
Liberal: it needs to be bigger, we need more money.
I hate both of the boxed views, but the conservative one more than the liberal.
The conservative honestly believes that there is no need for any of this stuff to begin with, they are supposedly morally opposed to regulation of any kind.
If you don't want it, and don't think that it can work, why on earth do you have an opinion on how to run a regulator?
Its like asking a vegetarian to recomend a steak house. Thanks for the help.
Can the SEC issue a supoena? If it can then it can bury an enterprise in supoenas, demand discovery and cause irreparable harm to an enterprise. On the other hand if the enterprise is intent on violating the law it can stonewall and hope that the SEC gives up. If the SEC is following an efficient market hypothesis and chooses not to investigate then you get what we have. As much as the agency may need a larger budget, it needs the direction and will to do and honor the full intent of the legislation that created it. Now I grant that that intent has not been present for the better part of 20 years. Saying the budget was inadequate is more a cop-out than a reality.