SEC intends to go after small fry, and leave the big boys alone

[eridani]

http://readersupportednews.org/opinion2/279-82/11696-sec-prefers-whaling-on-little-guys

Experience teaches us, for example, that fraud tends to proliferate in smaller entities that may lack highly developed compliance programs. It also means thinking carefully about what we might, borrowing again from the world of sports, call “shot selection.” It can be tempting to tangle with prominent institutions. But chasing headlines and solving problems are two different things. The question is what will do most good – where our focus should be. And the record seems to suggest that we can do most to protect smaller, unsophisticated investors by focusing more attention on smaller entities...

Just so we’re clear about what we’re talking about here: the S.E.C., rather than go after serial violators like Bank of America and Chase, proposes that the best place to find crime is in small-cap companies, because that’s where fraud “proliferates.”

In the last year or so I’ve heard from several attorneys who represent smaller clients who tell me they’re flabbergasted, watching the S.E.C. give the Chases, Goldmans, and Citigroups free ride after free ride while their pockmarked little clients at fledgling public companies get served the whole regulatory meal for minor disclosure violations – even cases that simply involve bad paperwork, where money isn’t even stolen. If you’re a little tech startup and there’s a $100,000 problem in your books, you can expect the full Princess Bride torture machine treatment, with multiple agents assigned to your case, serious criminal penalties, asset seizures, etc.

Want an example of the S.E.C.’s idea of “shot selection”? Every year, a parade of itty-bitty failed public companies lets their paperwork lapse. Dead little companies sitting in the bureaucratic atmosphere doing nothing at all are a major threat to national security, of course, so the S.E.C. flies in to the rescue and feverishly revokes their registrations.

[Art_from_Ark]

1. That reminds me of a Will Rogers satire of Calvin Coolidge

Rogers (imitating President Coolidge): "I'm going to appoint a committee to stop all that small graft. It's grown to such proportions that it's interfering with large graft."

[JDPriestly]

2. Precisely what is happening in my opinion.

[Lionessa]

3. They are accurate though, big guys get lawyers and spend more in defense and it drags out forever,

then just about the time they might lose, Congress passes a retro-active law that makes what the big guys' do/did legal.

With the little guys, the cost to defend is out of bounds for most, at least any defense that might actually work, so ultimately they pay up. Costs the SEC less in court and legal costs as well as time, and are more likely to actually win the case.

However, just because I understand the logic, doesn't make it right or correct or proper.

[dougolat]

4. Come on, the big guys fight back!

They spend more on lawyers than taxes, even when they "lose" they win.
And they know more ways to make your life miserable than a moose has ticks.

[Skittles]

5. PLUTOCRACY

[banned from Kos]

6. Pure innuendo. There are no examples of what the "big guys" get by with

In fact, Goldman got the largest fine ever at $550 million by the SEC and one of their former Board members is in jail.

NOT IMPRESSED.

I am tired of shitty journalism like this (reminds me of yellow journalist Matt Taibbi)

[Po_d Mainiac]

7. The same SEC that seen nuttin with Moody's, S&P, Fitch

But sent the troops after Egan-Jones?

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a Moral code that glorifies it."

- Frederic Bastiat.