Investigation

• As Mark Cuban pointed out this morning, (an appropriate post considering he is in trouble with them), the SEC system has some broken pieces inside of it and the legendary finger pointer is finally turning its finger back at itself.
• As most would not think, employees and executives of the SEC are actually able to play the stock market. Not that they shouldn’t have a fair chance to invest their money, but doesn’t allowing them to invest in individual bonds or stocks seem just a little bit ‘insider to you?’
• What policy currently governs this? Well, there is a SEC policy in place that outlines do’s ad don’t of trading stock, most of which emphasizes employees not investing in a company they are inpecting. But as Cuban points out, “if you know about actions of one company, even if you don’t trade that company, doesn’t that provide you insight into an entire industry ?” Sounds very unfair.
• It gets worse. In a recent Inspector General’s Report to Congress regarding the SEC, they had determined the current system in place governing the SEC is “insufficient to prevent and detect insider trading on the part of
  Commission employees or violations of the Commission’s rules”
• The recent investigation found that the reports employees are required to file when they buy, sell or own securities are not meaningfully reviewed or sufficiently checked for conflicts of interest. So in a nutshell, for the last decade or longer, SEC employees have been bringing down insider traders, while they have been operating under their own non-regulated umbrella for personal investments. Serious joke.

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