End the SEC?

Well. I won't duke it out on all your points, since I'd hate to see the thread get bogged down.

I don't think the SEC could be blamed for this. There wasn't much real fraud going on. Just a bubble. We've talked about that before.

There is a legitimate need for restructuring. The Madoff issue showed that, since they were completely incapable of spotting it, even after they received a few tips warning them about. Congress was giving them the 5th degree about it awhile ago.

It might just need a little more pressure or tie ins with the relevant FBI groups. It seems to be more of a problem of the old boys network and general stiffing of the arteries from years of inactiveness.

I'd have to double check on the FBI thing. I heard some scuttlebutt that they were too busy with homeland security and that the fraud decision got gutted. That supposedly left us a little more blind than usual.

SEC is certainly in need of some new pressure. No reason to throw out the baby with the bathwater though.

myp said:

The debate on whether or not to end the SEC (Securities Exchange Commission) is starting to become a hot topic after there was some mention of it in the mainstream news. The SEC has taken a lot of scrutiny after it failed to see the housing crisis coming and many think it should just be abolished due to its failures.

Personally, I wouldn't mind seeing it gone or at least massively restructured. What I am afraid of though, is what the government tries to create in place of the SEC. I have read a couple of proposals that suggest the power should be given to the Federal Reserve, which I really don't understand, considering the Federal Reserve also failed to see the housing bubble. In fact, it even made it worse. I would much rather prefer having the SEC as a separate incompetent entity than giving the power to the incompetent, but already overly powerful Fed. The best case scenario in my opinion would be to simply end both or to end the Fed and totally restructure how the SEC works, but I doubt that will happen. Your thoughts?

Click to expand...

I hope that will not happen as I know of one example - South Africa - where the Reserve Bank is fulfilling that role. And this is how the situation is. If anyone decides to leave the country temporarily, they have to file notice with their Bank, who in return reports to the Reserve Bank. When anyone wishes to open a new banking account, then there are so many Reserve Bank rules and regulations to be followed along cross referencing purposes, including giving your Tax Reference Number to Investment Companies. I would say that the financial services industry in South Africa has total control of all the banking of individuals in that way. When individuals open accounts they have to show proof of their residency through an electricity bill. That proof is verified electronically, in other words all the accounts are integrated for cross referencing: Banks, Investment Companies, Reserve Bank, Tax authority. So this is the reality that people from the US may have to face.

The body that reports to the Reserve Bank and does the policing etc. is called FICA (Financial Intelligence Centre Act). The link below gives and indication of its heavy hand:
http://www.mcclungs.co.za/lt-fica.htm

It is very very difficult to purchase properties. There is so much documentation involved, refer the link below and list of papers that are needed. Too much control and the control becomes an obstacle that is counter-productive:
http://realestate-southafrica.net/FICA.html

FICA Website
http://www.fic.gov.za/