Your SEC: “Massive Fraud? $50,000,000,000? Huh. How Did We Miss That for, Like, TWENTY Years?”

Ever since reading a biography of Joseph Kennedy about 10 years ago, I’ve always wondered just how much protection is actually provided by the Securities and Exchange Commission.

This is because Kennedy, who made his initial fortune on Wall Street via insider trading (which wasn’t yet illegal), was the first Chairman of the SEC. His appointment by FDR was regarded by some as the fox guarding the hen house, but there is also some logic to that, if the fox in question decides to become suddenly scrupulous.

Whatever else we can say about him, Joseph Kennedy was not scrupulous. But contrary to type, at least according to Business Week, he did a very good job at SEC, and cleaned it up, by striking a fine balance between “force and persuasion”.

Well, maybe the SEC could use his help once again.

When a few business journalists can uncover an obvious scam in a day or two, by looking at client statements and checking them against market activity for a given day, one may well ask, what exactly is the SEC doing?  Hanging out on Facebook all day?


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