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Attention laid-off financial journalists: The SEC is interested in your services.After realizing that untrained reporters straight out of journalism school are better at hunting down financial crimes in progress than its own crew of expert lawyers and accountants, SEC chief Mary Schapiro told the Reuters Global Financial Regulation Summit that "Investigative journalism actually would be a pretty interesting skill set for us to have. We've talked about financial analysis, we've talked about forensic accounting being skill sets that we really need -- understanding of complex trading, strategies and systems, but it's one of the things the SEC has to do. It has to really broaden its horizons and bring in people who think about things a little differently than it has historically."
When Portfolio recently shut its doors, it left some really, really talented and knowledgeable financial journalists jobless (although most were top-tier enough that they'll find more work quickly and won't be tempted by a job with a government bureaucracy -- the top financial journalists I know would, I'm sure, never dream of working for the SEC), this would seem to be an ideal time for the SEC to experiment with hiring journalists who have track records of cracking securities fraud cases outside of the regulatory bodies.
Schapiro is onto something with this: Financial journalists slave over their work, putting in long hours uncovering cases of corporate malfeasance and deception and the only thanks they usually get is the threat of issuer retaliation and nasty emails from angry investors convinced that they're in cahoots with short-sellers in an effort to drive down stock prices.
The question is whether financial journalists are better at uncovering crime than regulators because they're smarter and harder working or because they aren't part of the bureaucracy of the SEC. It's probably a little bit of both, but I doubt that people like Bethany McClean and Herb Greenberg would have been able to do the work they've done -- or helped investors as much as they have -- from inside the SEC.
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