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Former SEC Chairman Confirms That Anyone Relying On The SEC To Do Its Job Is "Making A Huge Mistake"
A very invigorated and activist Michelle Caruso-Cabrera points out what Zero Hedge has been claiming for some time: that the SEC should be disbanded post haste (although it appears Michelle's gripe is more with the lack of individual responsibility by the American citizen...alas that is arguably the mootest point in the history of the universe- exhibit A: McDonalds desert wrappers that claim "contents may be hot," to avoid frivolous multimillion dollar lawsuits from idiot customers). At least the former SEC Chairman Harvey Pitt confirms that the SEC (and the Rating Agencies) has been an abysmal failures in detecting and preventing any form of market abuse, and frankly, does not deserve a one cent budget, let alone $900 million:
Those who sit back and think that they can rely either on the government or rating agencies or even third party experts, are making a huge mistake.
Thank you Harvey, we could not have said it any clearer ourselves. As a former Chairman of the agency you should know.
Yet Pitt is correct in the following:
"I think the most important thing for the government to be doing is getting a constant flow of significant data from everyone who takes money from the investing public and then analyze that information, and disseminate it back to the markets. We are not seeing that and therefore our markets are not transparent."
Start immediately with those who now effectively run the markets.
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If this were a football game, Harvey Pitt would be flagged for a personal foul for piling on after the whistle. Were was he on WorldCom (post-Enron)? And Sarbannes-Oxley? You've got to be kidding me.
exactly. and the monitoring all hedge funds idea is more deflection of attention away from the obvious criminal activity conducted 24/7 by the big banks/broker dealers. Piss off Harvey.
The list grows of folks with ever increased potential realization, pre or post that there may well be a monster that needs to be corralled.
Ghost, I think you are the compiler of the list of traitors that the mob will take care of during the revolution.
Is Harvey on the list?
We need our playing cards with all the financial scumbags, politicians and enablers like the troops had in iraq with the top leaders.
Who is our king of spades?
What are Ben's and Hank's cards?
Cheers,
Pigpen
I would like to see the list
Yours for only $7.95:
http://www.financialcrisiscards.com/
One would think, that there are enough Crooks that have come to light since the last deck, That a second Deck of cards must be in the making. A Volume 2 perhaps? Now get to work....
They must be in demand because I bought a couple of decks 2 months ago for $5.95 each plus shipping from the same web site.
I put one deck away for history and I brought the other deck to the firing range. Needed to sight in my new rifle. They were very popular on the range and I left them there for the other guys and gals to defile.
if Jamie's the Queen of Diamonds, we're buying a handful of these.
The thing is, what deck of cards has 534 for congress and another couple hundred CEOs, regulators, etc?
Canasta? Or should we start a new game like po-ke-man that has a bazillion cards?
: )
Anyone who plays the market deserves the screwing imo.
Great find, better post. You are so funny I often cry at what you find and present for our consideration.
I imagine that the many Ivy League employee's of such an esteemed agency must garner a great deal of respect and admiration at the parties and gala's of the velvet ilk with proud Mothers and Fathers that proudly announce that their son or daughter is an assistant deputy director at the SEC.
Who would want such people in private employment?
It's like when you find a family of attorneys. There's always that one son who is an insurance agent.
Mr. Pittman, the outside experts are named to your right under the "The Zero Hedge Team."
You're welcome.
I for one hate the SEC and any and all Federal Agencies.
They are worthless 99% of the time. As are politicians.
But I will say this--
The SEC has started an investigation into a Penny Stock Company by the name of Spongetech Delivery Systems Inc. as they were asked to do by many many many people.
We will see soon enough whether or not they are serious about cleaning up their image.
I for one hope they are.
Thank You-
Moe Speeks the Truth
Why didn't I think of that, all we need is for these guys to have a LICENSE. That will prevent fraud and corruption. Purrrrrffect. These people are so dumb. Last I checked, fraud was already against the law.
Let´s be frank....
Seems to me Pitt is/was part of the problem....
In that Pitt is the perfectt example of what the
SEC has been made famous for....
Govt./Corp. crossovers which is fraught with
conflicts....
The solution for the markets is simple....
De-fragment them....make them fully electronic....
make short selling finite by float by electronic tag....
Make entrants boilerplate....get rid of legal largess wasteful fees....
Make the market first come first served....all
public securities must discover price on the exchange....
No dark pools....entries one second min...
This is so easy to fix....
The SEC has to be replaced by an electronic watchdog
in a fully open electronic marketplace....
The technology is here today and already has proven itself....
People like this have an absolute MORAL obligation to use every connection they ahve to get into the Executive branch and Congress and shake people by the collar and tell them that these agencies are doing nothing.
Blabbing as a pundit doesn't cut it. If Harvey Pitt feels this way, he has a moral obligation to get this message across and not rest until he's tried everything he can think of.
It's time we start talking about the moral implications of powerful people in government and Wall Street seeing major problems that are still looming and not taking personal responsibility and action to try to help avoid them.
Talking on CNBC does not count.
Zerohedge should invoice the SEC for roughly 10% of this year's budget, and 20% of next year's if they don't show any material improvement.
what the hell happened to MCC's lips?
personal responsibility - hahahaha.
Utter Jive.
Additionally, that MCC bitch was yelling all day...and no I can't change the station, can't explain why here.
But she would be required to work the Letterman show as punishment, if I had my way.
+1.
The SEC has also started looking into Pre-paid legal Services. Several years late, but in SEC time, ony a little late. I figure it takes them 6 months to a year to figure out whether they will be stepping on any big toes before they start an investigation.
Perhaps the SEC will take courage from numbers. Both the Division of Enforcement and the Division of Corp. Finance are investigating Prepaid Legal, as is the FTC. Add in a healthy assortment of lawsuits by former sales associates, former customers and state attorney generals... With all those on the hunt, the SEC might just do the right thing.
Given the macro situation, the precarious nature of US equities, and the obvious shadiness of PPD's operation, this might be the perfect short. Still a lot of meat left on the bone. The company is a zero regardless... all this regulatory scrutiny will just accellerate the descent.
Does anyone know what other countries have more transparency and effective regulation/enforcement in their equity markets? I would like to know how the United States stacks up...
that is a really loaded question. it epends on what you mean by those three words. We might have more transparency here but we are mostly transparent about intitutionalizing fraud. We may have more regulation, but it is of the wrong things. its mostly a race to the bottom in terms of these things.
Sorry not to give you a straightforward answer, I just dont know; but in the end it mostly a question of who has any of legitimacy left, and not which country has the most.
Hey there TD... that question just popped into my mind and I wondered if people felt the equity markets were manipulated in the United States... could they trade on an exchange in another country? And if they could, which ones would be better than the United States.
In other words another way for investment capital and money flow to exit the United States...
Hey... I think most people realize that the stock markets in other countries can be, and are, manipulated as well. HFT may be the big thing to spur such an outflow though. When important indicators such as volume are fudged, it pisses off a big chunk of the market participants, including myself. Which is why I've begun to completely disregard volume in my latest analysis, but mostly I have considered playing the other markets since I feel like, even though they are gamed, they are gamed more blantantly and openly than the NYSE and NASDAQ. But thats just my take.
Im actually going to be moving to asia soon anyways, so I might as well give their markets a shot regardless.
If I hear the word transparency one more time I'm gonna puke. How about FULL DISCLOSURE? Ooops, gotta go clean up.
" ...Shapiro is doing a great job." AT WHAT !!!
At What? Imagine yourself in her positon? Let's see what my not to do list from GS is today!!!!
Harvey Pitt is a hack and fired from SEC. The government is looking for the SEC to bring in more lobby money from Hedge Funds.
His comment about Mary Shapiro doing a fine job, is typical of why he was fired!
What fucking benefit would the private sector to do the investigations, it will just end up in the shredder and closed with no action, just like what they did with Madoff...these people are criminals!!!
Preventing fraud like Madoff is not possible???
Individuals have to take more responsibility to monitor the money they manage? Right, like due diligence, my broker is screwing me, who do I call Finra??? Please don't post anything from CNBC...it just pisses me off to no end!!
The game is up. Now the average Joe understands the whole system is rigged. SEC watching out for the little guy what a joke. GS upgrading the banking sector yesterday??? On what fundamentals? The government is allowing the banks to price the value of their own toxic assets on their balance sheets and all of a sudden everything is fine??? What about the trillions of derivative liabilities still out there? Am I living in Wonderland? Altogether now down the rabbit hole....
Yes, you are living in wonderland.
Everything is wonderfull here.
This is as good as it is going to get.
Soon it will all come tumbeling down.
Then the days of wonder will be over, and the age of darknes wil comence.
Yes, you are living in wonderland.
Everything is wonderfull here.
This is as good as it is going to get.
Soon it will all come tumbeling down.
Then the days of wonder will be over, and the age of darknes wil comence.
Is it me or is that guy a really annoying little bitch?
It was just a matter of a few weeks ago that he was saying what a great job the SEC were doing....
Go figure....On nationwide TV at that....
The only way to keep people honest is to make it painful to defraud. Suing the officers of a company personally to the point of poverty should suffice. The possible penalty of pulling them out of the Hamptons and putting them in an Appalachian trailer park next to the jerry springerites would likely instill instant morals.
I take exception to Exhibit A being the fault of the American people. The reason that products have stupid labels on them (contents may be hot) is the fault of - first of all, judges who take stupid cases - like the case of the woman who spilled hot coffee in her crotch while driving. (TOO BAD!) And then the insurance companies who lobby for regulatory changes to control their customers and customers of customers behavior. The American people are the victims of institutional stupidity that they are powerless to do anything about.
Yes, and the public should perform due diligence on structural soundness of the bridges they drive on and the aircraft they fly on. Which makes perfect sense particularly when public access to aircraft and bridges is forbidden for security reasons.
Pitt said it all about November 2007. The Rx for honest markets.
They know what's needed to level the decks.
They just ignore it because the money-- ununrelenting, unlawful and inhumane in its singular quest for profit-- has control of the game.
Former SEC chairman Harvey Pitt's ten requirements for a level playing field:
http://www.stopphantomshortselling.org/UpcomingEvents.html
http://pointers.audiovideoweb.com/stcasx/avwebnjwin9536/nov16/event_clip.wmv/play.asx
"First, SROs and the SEC need actively to pursue ongoing chronic and serial short selling infractions.
Next. Meaningful penalties have to be imposed for violations of existing Reg SHO requirements.
Third, the SEC should define and punish as fraud, abusive naked short selling practices.
Next. The SEC should act quickly and forcefully, otherwise, state regulation is more likely. And as I've already said, I don't think that's the best way to go. Our capital markets work because they're governed by uniform rules from Portland, Maine to Portland, Oregon. State regulation means fragmented requirements, practices, and procedures, and could cause loss of our competitive edge.
Next. The SEC should eliminate the option market maker exception. It isn't demonstrably of any value, and it risks facilitating illegal activity.
Next. Reg SHO should impose firm locate requirements as a condition precedent to all short sales.
Next. Reg SHO should cover securities that are also traded in the pink sheets. Naked shorts occur in the shares of small, thinly traded issuers, and those are likely to trade in the pink sheets.
Next. Chronic and unjustified violations of T+3 settlement rules should be punished.
Next. Before brokers are allowed to borrow margin shares, they should make clear disclosure and give investors the opportunity to opt out.
Next. Securities lending should occur openly and transparently at arm's-length prices, enhancing returns, increasing efficiency, promotion valid short selling, and curbing abuses.
Next. The NSCC should allow members to settle borrowing and lending activity through these facilities that I've just mentioned so accurate accounting and data is available to market participants and regulators.
Next. Shady activities thrive in shadowy market corners. Exchanges in other markets should be required to report the securities on daily threshold lists and aggregate daily volume of fails for each such security.
And, finally, Form 13F institutional investor reports should disclose both short and long positions. That would provide issuers and investors with a better understanding of trading activity."
Without the imposition of most of Pitt's list, our entire financial system will remain rooted in unpunished fraud and deception.
Private attorney general law a la Qui Tam.
Let the public be the watchdog.
A super-Qui Tam for financial fraud that has criminal penalties.
A whole bunch of unemployed lawyers will be looking for a plaintiff.
OK, now considering what we know about the total lack of transparency, resulting in our total inability to objectively value ANY paper asset, just exactly what was Mr. Pitt trying to tell us?
{cough} shiny rocks {cough}
Anytime the government is charged with regulating anything there is necessarily moral hazard that is created concomitantly with that authority to regulate. Whenever a singular authority is given the power to control a field by force, those who operate in that field cannot help but act as if that authority actually controls the field. Of course, we all know that often the government does nothing or, worse, only acts to protect special interests while screwing the public.
End the government, end the corruption.
There's always going to be a suggestion that the SEC lacks the funding to do its job.
Based on the Madoff situation does the SEC provide a false sense of security? Yes, I think it does, and people feel protected because it's there whether or not it does anything of value.
Would we be better off without the SEC, forcing people to be more responsible for their actions? Good question, don't know, but we have to look at the presence of the SEC as an influence on behavior or better said, as a kind of interventionism.
The laws and regulations are there, it was and continues to be an inforcement issue. And although I believe that there are holes in the Regs that need to be corrected, like the naked short selling issue, and the return of Glass Steagall, new regulations won't help if the same (lack of) enforcement is in place.
Reverse the greed, the SEC could self fund with recovered fines. Might even make them rabid....
I think we should create at least 250,000 gov. jobs to oversee the hedge funds. ACORN crowd would be more than happy to oblige.
I just walked in from watching Capitalism by Micheal Moore.
I think everybody should see this film. It will make them standup and do something to stop the continued fleecing of our country. ZH has provided an excellent public forum to expose the corruption in government and total control of that government by Goldman Sachs.
I heard people just gasp! One guy cursed the screen when Paulson and Dodd were shown. The average Joe in this country should see this film. It will give them incentive to demonstrate against "The Axis of Evil" in our own country!!! Our military should come home and take our country back and hunt these banksters!
Michael Moore is a corpulent liar. He can go to hell.
americans have like a dozen guns each, the fuck you need the army for?
you are all capable of executing some bankers and insurance executives your selfs.
Oh sure. The Finnish make the .338 lapua magnum and the entire line of Sako rifles and WE'RE the gun crazy ones!!
Harvey Pitt sucks Chris Cox.....
The most fundamental problem with the SEC is that Congress established it after the 29 crash. Federal policy drafted in the wake of a crisis is always flawed. Of the many wrongs committed back then the most severe was the "walling off" of securities from Congress itself. Nothing in the federal system enjoys so little real Congressional scrutiny. Members and Senators are the canaries in the federal mineshaft so to speak with the exception of securities and certain super secret intelligence agencies. Its no wonder our legislators understand so little about financial markets...deplorable really. What surprises me is that Ron Paul has had remarkable success with his "audit the Fed" bill, yet no similar effort has been suggested for the SEC. In many ways the SEC is just as opaque as the Fed. Sunshine is desperately needed at both institutions.
The most fundamental problem with the SEC is that Congress established it after the 29 crash. Federal policy drafted in the wake of a crisis is always flawed. Of the many wrongs committed back then the most severe was "walling off" of securities from the Congress itself. Nothing in the federal system enjoys so little real Congressional scrutiny. Members and Senators are the canaries in the federal mineshaft so to speak with the exception of securities and certain super secret intelligence agencies. Its no wonder our legislators understand so little about financial markets...deplorable really. What surprises me is that Ron Paul has had remarkable success with his "audit the Fed" bill, yet no similar effort has been suggested for the SEC. In many ways the SEC is just as opaque as the Fed. Sunshine is desperately needed at both institutions.
Harvey Pitt's record as chairman of the SEC and his choice of William Webster to over see the accounting industry was beyond embarrassing. Pitt knew Webster sat on the board of at least one accounting firm that was accused of fraud. And still he appointed Webster.........the hypocrisy is not to be believed! http://www.usatoday.com/money/companies/regulation/2002-11-05-pitt-resig... live him little room to speak.
The next bubble...same people, same rules, yet a different outcome?
http://www.q1publishing.com/blog/index/page/2
Harvy's been there, done that for many years. He knows whereof he speaks, unlike others who sputter pro and con about government regulation, from the Hill on down, and know zip about it.
both guests were talking their book. if the regulations were passed as Pitt suggested, who would be the companies coming in to do the 'independent oversight'?
take one look at who both gentlemen work for to find your answer.
the black hole just gets deeper and deeper and deeper...