Thursday, October 8, 2009

The SEC as a Political Agency, Nothing More, Nothing Less

So the SEC continues to harass billionaire Mark Cuban, after Cuban and U.S. District Judge Sidney A. Fitzwater gave the SEC a major league facial in the SEC's over stretched case against Cuban.

It's clear to see that the SEC is really going after Cuban because of his in your face attitude in battling the SEC, in addition to his high profile.

Meanwhile, the SEC won't go near a case of real insider trading that appears to circle around members of Congress, where the market took off when only select few knew that Warren Buffett, in the middle of the financial crisis, was going to announce a multi-billion dollar investment in Goldman Sachs.

As ever, the SEC continues to act as the ultimate political influenced operator. They go after high profile people, such as Cuban and Martha Stewart, who do not have high powered political connections, but who have high profiles. And they go after them on extremely stretched interpretations of securities laws (Yes, I know that Stewart technically went to the can for false testimony, but the testimony was on a hyped up insider trading case) .

At the same time, this SEC harrasment goes on, the SEC has in the past, and continues, to ignore the flagrant warnings signs of fraud and insider trading by the politically connected, such as Bernie Madoff and those circling around the mysterious trading that occurred after a confidential briefing of some powerful congressional leaders.


  1. Robert

    You seem to be confusing two different activities. The congressional leaders engaged in theft by extortion by using the power of government. This is not insider trading since the congressional leaders are not experienced and knowledgeable about investment banking.

    Cuban and Stewart made a decision based on years of experience and hard work - they earned their insider information and like each of us made a decision based on all of their skills and knowledge.

    Laws banning insider trading should be abolished.

    Thieves should be jailed.

  2. Who owns Barney Frank?

    The Massachusetts Democrat, who heads the House Financial Services Committee, released a draft bill Oct. 2 that allows for no change in how standardized over-the-counter derivatives are currently traded as long as they are reported to regulators.

    “Nothing will really change” the way trades are executed under Frank’s draft proposal, said Kevin McPartland, a senior analyst in New York at TABB Group, a financial-market research and advisory firm. “There’s no reason, at least that I can see, why anybody would go to an exchange.”

  3. Well there have been studies into the "informational advantages" of being a legislator...

    (See here)

    US senators' personal stock portfolios outperformed the market by an average of 12 per cent a year in the five years to 1998, according to a new study.

    "The results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors," says the author of the report, Professor Alan Ziobrowski of the Robinson College of Business at Georgia State University.

    Whatever the stated role of the SEC, the apparent impact, is to improve the relative "informational advantages" the well connected and politically powerful have versus everyone else.