Another player in the Bernie Madoff saga has fallen. His longtime auditor, David Friehling, pleaded guilty in federal court on Tuesday to charges of securities fraud, investment adviser fraud, making false filings with the SEC, and obstructing or impeding the administration of the Internal Revenue laws (among others).

Despite the plea, Friehling still told U.S. District Judge Alvin K. Hellerstein, "At no time was I ever aware Bernard Madoff was engaged in a Ponzi scheme."

Investors are calling for an inquiry into mutual fund fees, but the Supreme Court is reminding them that it isn't beholden to public opinion. The mutual fund industry is being accused of charging "excessive" fees, which could be particularly harsh on individual investors who use these tools as their primary way to access the market. Currently, the mutual fund industry has more than $10 trillion in assets under management, some of it through retirement and 529 college savings plans.

The Court doesn't seem inclined to step into the fray, saying that regulatory agencies are better equipped to address the situation. Chief Justice John Roberts, for example, said during arguments that "It makes a lot more sense to have the SEC regulate rates than to have courts do it, doesn't it?"

So, I was flipping through some articles in Rolling Stone, when I found a very interesting economic story - yes, in Rolling Stone. The article, "Wall Street's Naked Swindle," takes a look at what happened in the options pits leading up to the death of Bear Stearns and Lehman Brothers. According to the article, an unknown option buyer made "one of the craziest bets Wall Street has ever seen," by shorting Bear Stearns. The unknown trader felt that Bear Stearns would lose "more than half" of its value in nine days or less, a bet that one financial analyst likened to buying 1.7 million lottery tickets.

What is crazy is that this bet paid off, leading to only one conclusion: insider trading (cue dramatic music). When Bear Stearns dropped from roughly $63 to $2 per share on March 17th (just six days later), the person purchasing the options made roughly $270 million. Senator Chris Dodd from the Senate Banking Committee thought that something wasn't on the up and up with this trade, and the Securities and Exchange Commission (SEC) promised it would look into the trade. Of course, nothing has happened since.

Two New York investors have filed a lawsuit against the Securities & Exchange Commission, accusing the SEC of a "pattern of incompetence" in failing to detect and put a stop to Bernie Madoff's Ponzi Scheme.

"Had the SEC carried out its functions with even a minimum of reasonable due care, many, if not most, of Madoff's victims would have been spared the financial ruin they face today," the complaint said.

USA Today's Matt Krantz reports that shares of some companies bankrupted by the financial crisis have posted huge gains in recent months: "Lehman and WaMu, for instance, were booted from stock exchanges and filed for bankruptcy protection. Yet on the lightly regulated Pink Sheets markets, this year their stocks are up 500% and 1,050%, respectively."

The problem is that shares of companies like Lehman and WaMu are completely worthless with no prospect for recovery for shareholders. Ownership of the company's assets is no longer held by the common stock -- and with creditors taking losses, there is no chance that shareholders will receive a nickel.

The Securities & Exchange Commission is appealing a judge's dismissal of the commissions insider trading lawsuit filed against billionaire Mark Cuban.

Bloomberg reports that "The SEC today filed a notice of appeal at U.S. District Court in Dallas without indicating what arguments it may make. A judge had dismissed the agency's lawsuit in July, saying Cuban's alleged promise to keep information confidential about Mamma.com Inc. didn't bar him from trading the company's stock."

Sam Antar, formerly the CFO of Crazy Eddie, known in the New York area for over-the-top commercials that scared the hell out of kids (well, me at least), knows his way around a questionable balance sheet. For 15 years, he was the executive chef of book-cooking, ultimately taking a guilty plea to conspiracy and obstruction of justice charges. He stayed out of the clink by taking the stand on the government's side at a 1993 trial, ultimately sending his cousin, Eddie Antar to prison for seven years or so.

Crooks make the best cops, so to speak, and Antar is putting his skills to work. He's out hunting for accounting fraud and sending his analyses off to the SEC. On his blog, the former CFO laid out what he called a "bulletproof case" against Overstock.com (NASDAQ: OSTK) – a company that the SEC had been investigating since 2006. The inquiry has been reopened.

Autumn has arrived and the quarter winds down this week. The Dow has been inching toward 10,000 for a while now, though it closed lower in the past three sessions. Can it make it to 10,000 for the start of the third quarter? If so, what will push it higher? If not, what will drag it down further?

• Monday is Yom Kippur, the most solemn of the Jewish holidays; trading likely will be lighter than usual. In the evening, the FDIC meets to discuss how to rebuild the Bank Deposit Insurance Fund.
• Tuesday, the Consumer Confidence Index for September is due and the SEC holds a public meeting to consider more short sale actions.

A lot of people I talked with during the financial crisis thought that something seemed amiss as brokerages and credit-ratings services were issuing, what I liked to call, "happy thoughts" about the economy even though it sure seemed that we were headed over the falls in a thimble.

Among the upbeat outlooks were the ratings of complex debt securities, which quickly deteriorated and led to billions of dollars of investor losses. According to The Wall Street Journal and former Moody's analyst, Eric Kolchinsky, Moody's gave high ratings to complicated debt security in 2009 with knowledge that it would downgrade assets that backed the securities.

Bank of America (NYSE: BAC) CEO Ken Lewis has managed to survive a massive decline in shareholder value, two government bailouts, a raft of shareholder lawsuits, SEC investigations, civil fraud charges, and a wave of populist angst about the company's business practices.

But now CNBC reports that experts are questioning whether Lewis will be able to hang on as investigations of the company's acquisition of Merrill Lynch intensify. The FBI is reportedly taking a look, which suggests that criminal charges could follow.

Overstock.com (NASDAQ: OSTK) announced on Thursday that it received a notice from the SEC stating that the company was under investigation concerning its "previously-announced restatements of its financial statements in 2006 and 2008 and other matters."

CEO Patrick Byrne noted in the press release that "All of the matters that are the subject of the subpoena have been thoroughly disclosed and we are disappointed, given the extensive public disclosures Overstock has previously made, that the SEC, given all of the challenges it faces, has apparently chosen to expend time and resources on another investigation of Overstock. Rest assured, I will continue to speak out as I have on the shortcomings of our financial regulatory system."

TheStreet.com's Jim Cramer says the SEC moved fast to rein in flash trading, an issue, quite frankly, that doesn't matter.

So now we see what the Securities and Exchange Commission can act with alacrity on: flash. Yeah, something, frankly, as insignificant as flash. Yet they moved with lightning speed on it. The irony of it.

In my 30 years of writing and trading, I have seen the individual investor been abused nine ways to Sunday, carrion for the little guys, the sharpsters, the gamers, the bookies, everyone who can wring a commission or a gross credit out of the guy. From front-running -- and I mean real front-running, where you can make money -- to cherry-picking, I have watched the individual be gaffed and prayed the SEC would take action.

The conspiracy theorists have been arguing for month that aggressive short-selling and illegal naked short selling played a significant role in the financial collapse.

Bad news: The data just doesn't back that up.

Let's dive into the world of breaking news here, as the New York Attorney General's office has decided to mark the one-year anniversary of the financial meltdown by preparing charges against some Bank of America (NYSE: BAC) executives. Reportedly, the charges stem from the failure to disclose details about the company's acquisition of Merrill Lynch.

The Attorney General (Andrew Cuomo) is likely to file charges against the executives because of their failure to alert shareholders to mounting losses and accelerated bonus payments at Merrill. Earlier, a federal district judge rejected a $33-million settlement between BAC and the SEC over the same executive bonuses. This settlement was in relation to the fact that BAC did not inform shareholders of an agreement to pay Merrill Lynch execs billions of dollars worth of bonuses, the deal was struck before BAC acquired Merrill.

If you've worked as a broker you know the game. The house sets quotas. You must meet the quotas or its good-bye.

As a broker, your first and foremost obligation is to the client. You can make recommendations, but in the last analysis, the decision to buy or sell a security rests with the client. Brokers, however, are often under the gun by management to tout certain securities to their clients that may not be in their best interests.