I have written about the dismal performance of the SEC a couple of time, most recently to suggest that the world of finance will be a better place if the SEC is doing consumer protection and serious regulation of firms is left to the Federal Reserve.
But I didn’t know the inside details, and now Scot Paltrow has come through with a bunch of damning detail in the October issue of Portfolio.
Cox, a Republican Congressman from California, was a light-touch regulatory sort of guy.

Apparently a light-weight as well. Or, to give him credit for a three-digit IQ, perhaps a tool of the industry he was supposed to monitor and control.

Paltrow shows that Cox, President Bush, and Republican commissioners undermined SEC regulation, stalled investigations, slowed down replacement of Democrats on the bipartisan board, left key jobs vacant for years, and were so bad at their jobs that many of the best people quit.

“Cox also cut back on the SEC’s new risk assessment office, created under Donaldson to help the agency do a better job of anticipating financial upheavals.”

Yup, that worked out well.

The SEC has curtailed investigations and watered down penalties when firms were caught.
Cox was part of the Bush regime of deregulation – self-regulation, no regulation. The price to be paid is very high indeed.

Portfolio’s reporting is impressive…looks like this mag is going onto my must-read list.

Perhaps it should go on yours as well.

Filed under: Technology