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This is absurd. Why would we ever let regulators of the market be active participants in it. Certain jobs in the government require for one's assets to be in a
by Oculus 13y ago
This is absurd. Why would we ever let regulators of the market be active participants in it. Certain jobs in the government require for one's assets to be in a blind trust for there to be no conflicts of interest. If anyone in the government is doing it, it should be the SEC.
- devindotcom 13y agoIf you read the article, the SEC states that the reason they sold is because they were forced to by law, as they were soon going to being regulators of the securities they were going to regulate. However it does appear to be a good indication that something is coming down the line if SEC people sell...
- nostromo 13y agoThey should be barred from changing any position they have the moment there is a whisper of some sort of regulatory action against a company. This policy is forcing them to act on non-public information, which is very illegal for everyone outside of the SEC.
- Oculus 13y agoMaybe allow for two options: Option A: Blind trust with some capital gains incentives? Option B: Ability to manage your own portfolio, but can't act on SEC+company news until x hours after publicly disclosed?
- bagels 13y agoHow about C: They aren't allowed to trade at all.
- mkartic 13y agoIsn't that a bit extreme? I'm not saying there should be implicit trust or that there is no risk of insider trading, but still. Its not right to deny them of all rights to have other sources of income apart from their job. I mean, having to sell all their stocks of a certain company before investigation is forfeiture enough. My two cents, D: Some sort of anonymized peer review of transactions? Maybe even automated.
- dredmorbius 13y agoThe problem with option B is that it leads to a moral hazard in SEC enforcement actions. Selling stocks in which you're conducting an investigation discharges the conflict in pursuing the investigation, but likely accrues a gain consequent to it. Even, say, requiring a public disclosure of investigation, then* allowing SEC staff to sell stocks, would create a conflict to the extent that the decision to conduct an investigation would have a likely known negative influence on stock holdings.
- shalmanese 13y agoThat doesn't help either. If I have a thousand shares in BofA that become frozen, I might be tempted to go lightly on punitive damages against BofA to minimize losses to my portfolio.
- fleitz 13y agoSo if you have to sell you're essentially shorting and the only way to make good on the trade is to make the price go down.
- DavidSJ 13y ago"Making good on a trade" is not the goal of a rational investor. The goal is increasing one's wealth. An SEC employee divested of an asset has no greater interest in the asset being devalued merely because ey once held the asset.
- cjrp 13y agoSo that they can re-buy the asset at the newly-lowered value (with the assumption that it will return to its previous value)?
- shalmanese 13y agoIt went down because of a permanent change in SEC regulations. It's not going to bounce up from that.
- tosseraccount 13y agoHow about let them dump it all in a broad market ETF ?
- morganherlocker 13y agoIt seems like this should extend to many other roles as well. If someone in the EPA has investments in energy or manufacturing, for example. If someone in the FCC has investments in tech or media conglomerates. Pretty much anyone who has access to information about changing regulations, enforcement, etc. before the public. Congress has been known to have above average returns on stock investments, making the congressional salary increases we quibble over look like chump change, if they are using their unique knowledge of policy direction to the fullest.
- TheBiv 13y agoI believe it is a zero sum game to try and have "no conflicts of interest" in anything. At least the SEC is now forcing a system that A) Allows their regulators to be transparent about an activity that they have done their whole life (picking stocks) B) A system that forces them to opt out of explicit conflicts of interests.
- Oculus 13y agoI fail to understand your point. Why would eliminating conflicts of interest be a zero sum game? If somebody's job is to police the players, how could they do it effectively if they have a bias towards certain players? Allowing a conflict of interest destroys the purpose of their job in the first place!
- TheBiv 13y agoMy point was the zero sum game in that these SEC guys were former traders. So trying to have them not participate in the thing they were bred to do, is not practical or else they would have done it.
- 3327 13y agoHey the SEC only hires the best of the best .