Regulators, Our Saviors

The Securities and Exchange Commission (SEC) is responsible for regulating the securities industry, including monitoring and enforcing the laws and regulations on insider trading.

So it is disturbing to learn that the SEC does not practice what it preaches.

In response to a recent insider trading scandal by two of its employees, the SEC has initiated new procedures that investment banking firms had long ago implemented to reduce the risk of insider trading.

Specifically, in response to this scandal, the SEC will prohibit its employees from trading in the stocks of companies under its investigation and will require employees to have copies of their brokerage accounts sent to the SEC.

For those who put their faith in greater power for regulators, this is one of many cautionary and disturbing tales.