Given the total nightmare that the securities markets have become over the past few years, you would think that the SEC chairman would be a little bit ashamed of his tenure. At the very least, he wouldn't have the cajones to go on the record as being proud of his accomplishments, would he?

If his name is Chris Cox, yes he would. In his first interview responding to the well-deserved criticism that has been tossed at him, Cox said that "What we have done in this current turmoil is stay calm, which has been our greatest contribution -- not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants."

Holy crap. This is the equivalent of Nero saying that he takes considerable pride in his measured, prudent response to the burning of Rome: "At least I didn't panic!"

He referred to the Madoff affair as a "big asterisk" on an otherwise good record. Right: the largest Ponzi scheme in history was an asterisk. So other than that Mrs. Lincoln, how was the show? Notably, Cox did admit that the ban on short selling of financial stocks was a mistake. Of course, we already knew that, and most intelligent commentators said all along that the SEC was barking up the wrong tree in going after short sellers.

By any objective measure, Chris Cox's tenure as SEC chairman was a pathetic failure. But watching him to try to defend it is sort of fun.

SEC Chairman Chris Cox, who has been off battling the imaginary dragon of naked short selling as actual securities fraud continues to be as easy as ever to get away with, has a message for you about the recently-expired naked-short selling rule.

He said that failures to deliver in the 19 financial stocks affected "were reduced substantially" and added that "It was a very effective order from that standpoint." Fair enough. But then he dropped this bomb shell: "We expected and intended to have no impact whatsoever on the direction of prices. That's not the purpose of regulations."

Uh-oh. That takes quite a bit of the wind out of the sails of the naked shore-selling conspiracy theorists -- if naked short selling was an evil scheme driving down share prices, then wouldn't regulation designed to curb it be expected to impact the direction of share prices? That statement from Mr. Cox would seem to be an admission that failures to deliver are a procedural issue, not some conspiracy to drive down stocks involving crooked journalists and a "sith lord" as Overstock (NASDAQ: OSTK) CEO Patrick Byrne infamously suggested.

For a summary of the commentary on this mess, check out this post from Gary Weiss.

The Wall Street Journal recently reported (subscription required) that the Securities & Exchange Commission wants more money from Congress to invest in the oversight of investment banks and credit-rating agencies. Given all the problems that have emerged there, it seems like it might be necessary.

But the problem is that many of the Chris Cox-led SEC's failures have not been a result of a lack of funding, but rather a lack of a political will to stand up to the Business Roundtable that no amount of additional funding can compensate for.

In a glaring betrayal of the investing public back in December, Cox and the GOP-controlled Commission took steps to insulate poorly performing directors from dissident shareholders.

Separately, investigative journalist Gary Weiss charges that, rather than cracking down on serious problems in the securities markets like the rating agencies and investment banks, Cox has devoted an inordinate amount of time to the topic of naked short selling. Weiss asked the question "Why is naked short selling the only `fraud' that has no victims and no perpetrators, only a bunch of crackpots yammering about conspiracies?"

Maybe the SEC does need more funding to protect the interests of investors. But it could do a lot more without any additional money if Cox and company actually took their duty to the American people seriously.

In honor of the tenth anniversary of blogging, The Wall Street Journal interview a handful of noteworthy minds on the impact of blogging on society. For investors, the most interesting comments came from SEC Chairman Chris Cox:

As investors strive to make sense of the ever-higher mountains of data that we're buried under, the services of bloggers, whom we can imagine sitting at home in their pajamas trolling the Internet for us, free of charge, are likely to be an increasingly consequential addition to the investor's tool kit...

Do bloggers portend more lasting ramifications for the securities world? But of course. Shareholders are on the move, and technology has given them a cheaper and more-effective means to communicate. From improved price discovery to better corporate governance, investors, markets, managements and boards will never be the same.

It's encouraging to see that Chairman of the SEC recognizes the positive impact that blogs can have on financial markets, and all of us at BloggingStocks are thrilled to be "sitting at home in pajamas trolling the internet for you, free of charge."

His comment that bloggers can lead to "better corporate governance" is particularly interesting. Bloggers have the space to rant about executives in a way that few print publications to do. In the past, I've used BloggingStocks to try my hand at shareholder activism involving a company I own shares of, and I plan on doing more of that in the not too distant future.

Bloggers like Gary Weiss have used the internet to expose fraud and corporate shenanigans.

There's no question that blogging has already made a big impact on the investment world and, as it gains acceptance (The SEC chairman endorsing blogging!), I would look for that influence to increase.

SEC Chairman Chris Cox called on the mutual fund industry to join him in the "war on complexity." Cox discussed the difficulties that investors have in comparing mutual funds using the SEC's Edgar Database. He also called for more disclosures about 401(k) fees and performance, saying that "We will continue to purge all the legalese and convert it to plain English. But getting rid of the gobbledygook is no easy task. But we want to give every investor the info to achieve sound investment decisions."

I'm highly skeptical about the odds of mutual funds making it easier for investors to compare expenses and performance because, if they did, most people wouldn't buy most mutual funds. If people had a solid understanding of mutual funds and the factors impacting their performance, pretty much everyone would buy the lowest cost index fund they could find. Needless to say, that wouldn't be good news for most investment management companies.

However, instead of complex disclosures and spreadsheets that 99% of individual investors really don't care about, I have a plan. Every mailing/advertisement/prospectus discussing a mutual fund should be required to contain a red piece of paper with the following:

DEAR INVESTOR:

Most likely, the mutual fund that is soliciting your business brags about its track record and its management team's expertise. As an investor, there's something you need to know: None of that matters.

Past performance, Ivy League credentials, and colorful promotional literature have very little impact on a fund's future performance. Here's what matters: The expense ratio. By keeping your costs as low as possible, you will beat more than 80% of actively managed funds.

Investment legends including Warren Buffett, John Bogle, and Burton Malkiel (to say nothing of Ben Stein and Suze Orman) have all said that most investors should stick with passively managed, low-cost index mutual funds. If the fund being advertised here does not fit that description, we strongly advise you to toss the mailing into your recycling bin.

Best of luck in your pursuit of wealth.

Your Friends at the Securities and Exchange Commission