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The OP references an analysis from Seeking Alpha in 2021, but it turns out that there's yet another article from Seeking Alpha[0], published all the way back in

• altacc 4y ago
  I think most people grossly overestimate the ability of government to act on fraud, scams and crime, even when there is information available. I see this with other scams & ponzi schemes. A common sentiment from both victims and con-artists is "if this is a scam, why haven't the police/government/etc... closed it down". All our governments are dysfunctional & ineffective to some degree and there just aren't enough resources to cope with everything and the burden of proof for action is high. Normally some political will is needed to prioritise an investigation into a particular company. Regulators are underfunded and outgunned by those whose massive profits rely on outsmarting them.
  • folbec 4y ago
    "Regulators are underfunded and outgunned by those whose massive profits rely on outsmarting them." That's a feature, not a bug, and generally true in any country. If regulators were correctly funded and staffed, they would have time to look into the shady dealings of the rich and powerfull. That will not do.
    • altacc 4y ago
      Indeed. Corruption takes many forms and in most Western countries that like to think they don't have corruption, allowing the rich to set the rules, decide the referee and how to hobble them is a very popular and effective form of corruption.
      • creakingstairs 4y ago
        > Corruption takes many forms and in most Western countries that like to think they don't have corruption Yes. Most of the corruption stats are measuring “perception” of corruption and they are also using the traditional, blatant meaning of corruption where money is exchanged for favours. But corruption in the West have evolved to be much more subtle and essentially impossible to catch (at least without major reforms). And as you said, they hold the power to fix this :)
        • justinclift 4y ago
          It's not really subtle at all though. It's just that it's been entrenched into "how things are done" to the point where most people don't take a step back to view things objectively, and realise.
          • hramrach 4y ago
            Isn't it the same in the countries that are looked down at because they have the 'overt' type of corruption? It's just the way things are done there, and it's so entrenched that people cannot step back and see it rationally. Unless they are, say, from a country where the corruption has taken on a different form, or from Mars.
        • riekus 4y ago
          So true, in Dutch parlement it is almost forbidden to say the word corruption. It has to be rphrased as 'mistakes'
    • moonchrome 4y ago
      >If regulators were correctly funded and staffed, they would have time to look into the shady dealings of the rich and powerfull. That will not do. Yea no - if they were more funded and staffed they would audit you and other small players - big players leverage connections to dodge stuff like this all the time.
      • skrtskrt 4y ago
        It depends on their priorities. Prior to the cuts to the IRS in the Trump administration, their priorities were in auditing wealthier people and they had an excellent rate of return. Quite obviously even though rich people have lawyers to push back and more sophisticated tax hiding schemes, the payoff when you succeed is huge. And even though you need a well staffed, competent team, it’s still cheaper than the manpower clawing back a few thousand dollars each from tens of thousands of tiny audits. Are they catching the biggest Panama-paper level players? No those people have too much sway. But they can be very effective against the “ordinary” rich people.
        • deleted 4y ago
          [deleted]
        • donthellbanme 4y ago
    • nullc 4y ago
      There is no strong reason that a regulator funded enough to go after every scam wouldn't instead spend much of the time chasing their own personal or political enemies. There is evidence that they wouldn't use the resources in the public interest: since we know that the NSA is well funded with a budget that isn't up to public inspection and it has used its surveillance powers for the fulfillment of its staff's prurient interests. "We just don't have a way to solve this via authority" is also a possible answer. It's fundamentally a question of scalability: Asking a regulator to protect everyone just doesn't scale, in anything but the most draconian police state there will always be more crooks than regulators (and in a police state the crooks become police). So the primary defense must always be an individual and personal responsibility, as irritating as that is. The regulator then exists to backstop people's personal protection, dealing with what slips through and helping to keep the personal costs tolerable. Doesn't mean that our regulators couldn't do better. I think they could. But there is only so much you can expect via regulator and law enforcement action.
    • renonce 4y ago
      > If regulators were correctly funded and staffed, they would have time to look into the shady dealings of the rich and powerfull. Once regulators were correctly funded and staffed, they would become the rich and powerfull.
      • dgfitz 4y ago
        Reminds me of the line in Watchmen: "Who watches the watchers?"
  • olalonde 4y ago
    It's unreasonable to expect the government to verify all the information all the time. We need a strong deterrent for fraud by prosecuting it when it happens. I feel somewhat sorry for the shareholders but it seems that many of them were in on it or should have known better.
    • psychoslave 4y ago
      This is an unreasonable world: https://en.wikipedia.org/wiki/Permanent_Record_(autobiography) https://en.wikipedia.org/wiki/Permanent_Record_(autobiograph...
  • throwaway0a5e 4y ago
    > All our governments are dysfunctional & ineffective to some degree and there just aren't enough resources to cope with everything and the burden of proof for action is high You know what a time honored way to make dysfunction worse is? Add money. The incentives in these organizations are set up all wrong for delivering "good for society" outcomes beyond some local minimum of catching the smallest fish. Money won't change that.
  • wbsss4412 4y ago
    Wait, we don’t live under a totalitarian state with complete with unchecked power and total surveillance at all times?? /s
  • miohtama 4y ago
    This is why on public stock markets we have short-sellers. They are the bug bounty hunters of capitalism.
  • api 4y ago
    Yet get busted with a baggie of a controlled substance, go directly to jail. Look what happens when you put white collar crime on a "bad neighborhood" map: https://whitecollar.thenewinquiry.com https://whitecollar.thenewinquiry.com A mugger will take your wallet. Those people will take your life savings.
  • cascom 4y ago
    In my experience government regulators are typically follow their incentives which is tot take on cases that are easy (some one else’s does all the hard work and puts it in their lap), generate career making headlines, or generate revenue for their office (regardless of whether the targets actually did something - extortion)
    • kingofpandora 4y ago
      This case sounds like the definition of easy!
  • silexia 4y ago
    Government is well intentioned but easily corrupted. It is better to have NO regulation and have people know they need to look out for themselves, then to have the fake supervision that we have.
• alephnan 4y ago
  > proof dug up by journalists I'm not sure SeekingAlpha is viewed as a formal journalistic channel. It's the equivalent of Medium where amateurs can participate, too.
  • itsoktocry 4y ago
    >It's the equivalent of Medium where amateurs can participate, too. How do you define who is an "amateur" vs "professional" journalist? And what makes the latter more likely to tell the truth than the former?
• drawingthesun 4y ago
  I could be way off, is this not like a broken clock is correct twice a day? There are likely articles written about every legit investment as fraud with some set of numbers to back them up. If you look hard enough there is "proof" that the usd dollar is a scam, which I think we can all agree is not true. I doubt regulators can investigate every potential fraud and instead have to be wise where they allocate their limited resources. This is an unfortunate case of that system not working, but I think that the system works enough that we can be sure 95% of listed companies are not fraudulent.
  • itsoktocry 4y ago
    >There are likely articles written about every legit investment as fraud with some set of numbers to back them up. Are you not able to read an article and discern that it could be plausible versus nonsense? >If you look hard enough there is "proof" that the usd dollar is a scam, which I think we can all agree is not true. Oh, you can. I don't understand the premise of your argument here, then. I expect the same ability from our regulators. >but I think that the system works enough that we can be sure 95% of listed companies are not fraudulent. What do you mean by "are not fraudulent"? You mean aren't complete scams? Sure, but I think that's a low bar. I believe far more companies are committing fraud than 5%, though they wouldn't be considered outright fraudulent companies.
• refurb 4y ago
  I'm not sure you understand how regulations work. For the most part they are enforced after the fact. The SEC doesn't have tens of thousands of employees to do due diligence on every single listing out there. That's just completely impossible. That said, this is a great example that huge returns in the equity markets are possible if you're willing to do the work. If you read about a stock in Bloomberg you're months too late. It's the smaller edge cases where the price discovery goes all out of wack.
• rmbyrro 4y ago
  Although there are good, competent and motivated professionals in all governments, they are overwhelmed by a cult to inefficiency.
• jandrese 4y ago
  There were numerous skeptical articles written about Bernie Madoff during the years he was running his Ponzi scheme. Nothing came of them. Regulators generally don't step in until the system is already blowing up.