13 ms·

SEC employees should not be allowed to trade stocks, period! Fed chairman abides by these rules, it's ridiculous that employees of SEC do not.

JumpCrisscross 13y ago
In an ideal world. In practice the most qualified people for SEC roles have a background in industry, and prefer to have a say on their portfolios. Prohibiting discretionary trading (or worse, stock ownership) would likely catastrophically restrict the pool of applicants to the clueless and unqualified.
- dmckeon 13y ago
  So, create a mutual fund that operates as a blind trust, and allow transfers free of capital gains tax into the fund when an employee is hired. For extra points, require everyone who gets a Federal salary to participate, including Congress-folk and their staff. Operate the fund so that when the US economy is doing well, and unemployment is low, and other reasonable and measurable national economic goals are met, all the participants benefit. An incentive like that might attract to Washington more cluefull and qualified people who are willing to cooperate so that the people of the country benefit.
  - Oculus 13y ago
    I wish I could upvote this more than once. Aligning government employees interests with the nation's should be #1 priority. Talk about an incentive to do your job well.
- 001sky 13y ago
  "catastrophically restrict the pool of applicants" This is amusing, but false. This is similar reasoning to why CEO's should make 10-20million dollars a year, rather than say...$10MM/yr. There is actually no shortage of people to be the CEO of any company (or the top rank in any hierarchy) and truth be told, Boards of Directors could not tell the difference for 9/10 candidates. As the saying goes, "graveyards are filled with the people thought previously indispensible". And empirical examples abound. Just imagine Apple without Steve Jobs, or Yahoo without whoever the guy was before Marissa Mayer. The only thing keeping quality applicants out of the SEC is power, presitige, and respect. There are many jobs that people work for low pay (eg Academia) provided that their social status is secure.
  - yummyfajitas 13y ago
    So when a company fails, the CEO deserves little/none of the blame?
  - ahomescu1 13y ago
    > Just imagine Apple without Steve Jobs Ironically, Steve Jobs is the best counterexample, IMHO. He took a failing company and propelled it to market leader, launching several great products (the iPod, iPhone, iPad; disclaimer: I'm not a particular Apple fan and don't own any of these devices, but I have to give credit where it's due). We'll see where Apple is going from now on, but my bet is they're never going to have huge hits like the iPhone again; instead, they'll just keep doing incremental updates of their current products. Another good example is Bill Gates. Regardless of the man's moral qualities (or lack thereof), he was great at running Microsoft. After Gates left, Ballmer has only been dropping the ball on everything except consoles. Apple and Google are slowly but surely taking Microsoft down (how many people own Windows Phones, versus Android or iPhones?). It may seem easy to keep a profitable company going as usual, but it's really hard to take a failing one or a startup and make it succeed.
- rayiner 13y ago
  At least on the enforcement side, most potential employees will be private practice attorneys whose ability to trade is already restricted by conflict of interest rules. Many therefore prefer to use passively managed investments anyway. I doubt it would be a big deal.
- TheCondor 13y ago
  The SEC already has this problem. Those with sophisticated enough financial knowledge to regulate the best are already hired up by the big financials where they can make more money. Anyone at SEC is likely to be a better than average stock picker. This study might be flawed. They need to measure the SEC against the hedge funds and mutual fund pros. If they beat those guys, who already beat the market then maybe there is something fishy going on.

JumpCrisscross 13y ago

In an ideal world. In practice the most qualified people for SEC roles have a background in industry, and prefer to have a say on their portfolios. Prohibiting discretionary trading (or worse, stock ownership) would likely catastrophically restrict the pool of applicants to the clueless and unqualified.

dmckeon 13y ago
So, create a mutual fund that operates as a blind trust, and allow transfers free of capital gains tax into the fund when an employee is hired. For extra points, require everyone who gets a Federal salary to participate, including Congress-folk and their staff. Operate the fund so that when the US economy is doing well, and unemployment is low, and other reasonable and measurable national economic goals are met, all the participants benefit. An incentive like that might attract to Washington more cluefull and qualified people who are willing to cooperate so that the people of the country benefit.
- Oculus 13y ago
  I wish I could upvote this more than once. Aligning government employees interests with the nation's should be #1 priority. Talk about an incentive to do your job well.
001sky 13y ago
"catastrophically restrict the pool of applicants" This is amusing, but false. This is similar reasoning to why CEO's should make 10-20million dollars a year, rather than say...$10MM/yr. There is actually no shortage of people to be the CEO of any company (or the top rank in any hierarchy) and truth be told, Boards of Directors could not tell the difference for 9/10 candidates. As the saying goes, "graveyards are filled with the people thought previously indispensible". And empirical examples abound. Just imagine Apple without Steve Jobs, or Yahoo without whoever the guy was before Marissa Mayer. The only thing keeping quality applicants out of the SEC is power, presitige, and respect. There are many jobs that people work for low pay (eg Academia) provided that their social status is secure.
- yummyfajitas 13y ago
  So when a company fails, the CEO deserves little/none of the blame?
- ahomescu1 13y ago
  > Just imagine Apple without Steve Jobs Ironically, Steve Jobs is the best counterexample, IMHO. He took a failing company and propelled it to market leader, launching several great products (the iPod, iPhone, iPad; disclaimer: I'm not a particular Apple fan and don't own any of these devices, but I have to give credit where it's due). We'll see where Apple is going from now on, but my bet is they're never going to have huge hits like the iPhone again; instead, they'll just keep doing incremental updates of their current products. Another good example is Bill Gates. Regardless of the man's moral qualities (or lack thereof), he was great at running Microsoft. After Gates left, Ballmer has only been dropping the ball on everything except consoles. Apple and Google are slowly but surely taking Microsoft down (how many people own Windows Phones, versus Android or iPhones?). It may seem easy to keep a profitable company going as usual, but it's really hard to take a failing one or a startup and make it succeed.
rayiner 13y ago
At least on the enforcement side, most potential employees will be private practice attorneys whose ability to trade is already restricted by conflict of interest rules. Many therefore prefer to use passively managed investments anyway. I doubt it would be a big deal.
TheCondor 13y ago
The SEC already has this problem. Those with sophisticated enough financial knowledge to regulate the best are already hired up by the big financials where they can make more money. Anyone at SEC is likely to be a better than average stock picker. This study might be flawed. They need to measure the SEC against the hedge funds and mutual fund pros. If they beat those guys, who already beat the market then maybe there is something fishy going on.