Let's go back to financial crisis. Do you remember that it was the rating agencies that gave AAA ratings to a slew of investments that turned out to be worthless. This created a panic in world markets. Trading in derivatives came to a virtual standstill and the world was on the verge of collapse. Do you remember this?
The Securities and Exchange Commission (SEC) was asleep at the switch when all this happened and did nothing. Instead of doing the right thing and shutting all these rating agencies down, The SEC is forming a new group to investigate potential fraud cases.
Now the SEC is scrambling to cover their mistakes. Since January the agency has opened 439 investigations compared to 385 last year, It has issued 224 formal orders of investigation compared to 93 for the same period last year. Where are all the convictions?
Ms. Schapiro, head of the SEC, will also discuss ways to strengthen regulation of money market funds, strengthen shareholder rights, including the ability to nominate directors and rules against abusive short selling. Notice that the word "discuss" was used. Why not just do it?
What should the SEC do next?
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Reader Comments (Page 1 of 1)
7-15-2009 @ 9:31AM
kpinvest said...
If you've ever read the consumerist, many corporations have a saying when dealing with customers: "we're taking it seriously".
It sounds like the same kind of answer from the SEC. Discussions are great, but like any other Government agency, it will just lead to delays.