Friday, June 23, 2006

A Horror Story of Co-opted Regulators

See the New York Times front-page article today. If true -- and this is all very much in the "allegedly" stage -- it would be one of the most awful stories in memory of the Securities and Exchange Commission being co-opted by the people it is supposed to regulate.

If he had any role in the firing of the SEC whistleblower described in the piece, SEC chairman Christopher Cox has got to go. Ditto if he stopped the agency from issuing a subpoena to Morgan Stanley's CEO John Mack.

As I described in Wall Street Versus America, the SEC and the self-regulatory "pyramid" are hopeless. Investors need to watch out for themselves against the Street's greed.

UPDATE: Houston Chronicle journalist Loren Steffy, in his blog, equates the above, with all its horrific implications, with Cox's previous decision to pull back on idiotic subpoeanas to journalists who fell afoul of blame-shifting CEOs. I wrote about that some months ago, here. I'm not sure that he entirely appreciates the difference between the two situations.

Anyway, we haven't heard much of the dumb journo subpoenas, and hopefully Loren will join me in seeing to it that they remains forever deep-sixed.

© 2006 Gary Weiss. All rights reserved.

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Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

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