Friday, August 21, 2009

Ready, Aim, Misfire!-2

"The [SEC] accused two options traders and the brokerages for which they worked of violating short-selling rules, in what the agency billed as the first case of its kind. The people and companies settled the cases with the SEC and paid fines without admitting or denying wrongdoing, the commission said Wednesday. ... Since last year, the SEC has tightened short-selling rules. ... In one of the settlements, the SEC alleges that Steven Hazan, 31 years old and owner of Hazan Capital Management in New York, from 2005-2007 used a series of 'sham' transactions to avoid complying with trade-completion requirements. During that time, the firm improperly made at least $3 million, the SEC said. ... The SEC also thanked the [FINRA], the securities industry's regulatory body, for its assistance. ... In a separate case, regulators charged Michael Benson, a trader with Chicago trading shop TJM Proprietary Trading LLC, with naked short selling. ... TJM agreed to pay back $541,000 it made from improper gains", my emphasis, Kara Scannell at the WSJ, 6 August 2009, link:

I expect the SEC to rarely do anything useful. These two cases together do not meet my Blankfein Test. Why bother? Whose ox was gored here? It's nice to see Mary Schapiro (MS) pat herself on the back for a useless job well done. Wasn't MS FINRA's head before she went to the SEC? It doesn't seem to matter who heads the SEC. It's useless. See my 19 July 2008 post:


Anonymous said...

If the SEC is an enforcement agancy for the securities industry you would think they would have brought some substantial cases of wrongdoing from this financial crisis. Soooo...

1. They are still developing cases.
2. Regulatory capture is complete.
3. Treasury and Fed say "don't rock the boat" systemic stability.
4. They are incompetent.

I don't know. If these measly cases are all they can show from the largest financial crisis in America's history they should all go home.

Conflicted or incompetent?

Either is a pity.

Jr Deputy Accountant said...

I love when you get angry at the SEC.

Even if they COULD enforce at some point they are absolutely helpless now. It's every man for himself, Schapiro should hope everyone plays their part.

Can you imagine what they've missed? As if Madoff would pacify us?

Bread and circuses? "Here, watch us doing our job." we don't even get a show :(