Michael Lewis, David Einhorn: Close Revolving Door Between SEC And Wall Street

There are...a handful of...perfectly obvious changes in the financial system to be made, to prevent some version of what has happened from happening all over again.

Close the revolving door between the S.E.C. and Wall Street. At every turn we keep coming back to an enormous barrier to reform: Wall Street's political influence. Its influence over the S.E.C. is further compromised by its ability to enrich the people who work for it. Realistically, there is only so much that can be done to fix the problem, but one measure is obvious: forbid regulators, for some meaningful amount of time after they have left the S.E.C., from accepting high-paying jobs with Wall Street firms.

But keep the door open the other way. If the S.E.C. is to restore its credibility as an investor protection agency, it should have some experienced, respected investors (which is not the same thing as investment bankers) as commissioners. President-elect Barack Obama should nominate at least one with a notable career investing capital, and another with experience uncovering corporate misconduct. As it happens, the most critical job, chief of enforcement, now has a perfect candidate, a civic-minded former investor with firsthand experience of the S.E.C.'s ineptitude: Harry Markopolos.

Read the whole story here.

Comments

[jerrypl]

Finally, the NYTs has decided to publish in the words of Mr. Einhorn and Mr. Lewis, which were written in multiply pieces by Mr. Denninger, who had been saying the same thing on his Market-ticker website for over the past 6-7 months!! (Referring to the Einhorn/Lewis companion piece---How to Repair a Broken Financial World). How long does it take for the mainstream press to finally publish what has been out there for a half a year? Denninger ( http://market-ticker.denninger.net )outlined the exact same fixes as these two authors did. Mr. Markopolos should receive a Congressional Medal of Honor for pushing to expose the Ponzi Scheme, but the Bush administration wanted to thwart his efforts to continue to perpetuate the world's biggest Ponzi Scheme--the financial sector's theft bringing down the world economic system.

It is time to point the fingers, and indict those who have been responsible. Wake up Congress and set up a grand jury investigation--now!

http://eye-on-washington.blogspot.com

[Rule Of Law]

Just as all corporate lobbying should be illegal, so should the hiring of former "public servants" by the companies they once were the watchdogs of. And if you come out of an industry like investment banking to do your country a service in the government, then you should be precluded from going back into that business for five years--a sort of non-competition clause as is commonly found in many industries now for top people.

[dadw5boys]

Stop NAKED SHORT SELLS, STOCK LOANS and no more 2 or 4 days to COVER stocks sold short for anyone. All shorts sales to be covered within 1 hour of close of the market. PERIOD !!!!!!!!

That will end the short sales control of the market and give investors who want to see a company be succussful rather than drive it out of business.

It is harder to build something than destory it.

[MontereyDean]

It's hilarious when you think about it. The notion that anyone needs to be told "regulators should regulate." 4.2 billion years of evolution, and look where we are. Perhaps the loony right is correct -- evolution, like global warming, is a hoax, a lie. We seem to be getting dumber every day.

[tomas0808]

Burn it down! Burn it all down!!!

[joebaggadonuts]

I am glad you are being published here too. Thanks for your work.