President Barack Obama’s budget request would increase U.S. Securities and Exchange Commission funding more than 13 percent to overhaul an agency that missed Bernard Madoff’s alleged fraud and drew criticism for its oversight of failed investment banks. - Bloomberg
Regardless of your position in Main St or Wall St, the failures of the SEC have affected your life one way or another. The super regulating government agency has over 3700 employees and spends several billions of dollars each year to achieve very little.
It is not newly found information that the SEC is going to get a boost in funding this year, the questions are, do they deserve it? Do they really need it? Do we really need them?
I understand the argument that there is a new leader of the SEC, I understand the argument that Cox was the problem. But the reality of it is that despite who is there, just like every other government agency they are still full of red tape, political correctness, inefficient, ineffective and too expensive. Just recently the failed banking institution Washington Mutual requested an investigation on regulators because they suspect that JP Morgan worked with Government Regulators like the FDIC and Federal Reserve to fraudulently scoop up WAMU on the cheap. If these allegations are true, that back door deals occurred, will the SEC be to blame because of their failure to see this in their own back yard? Probably not.
The behind the curtain saying in Washington is, "If it failed 420,000 times, throw more tax payer money at it." And that is exactly what their doing.
Timothy Sykes, an extremely popular blogger and successful trader has used the failures of the regulators to his advantage and to create his trading niche. He has also profited greatly from it. His story is truly inspirational and not because he turned $12k to several millions but because he proved that the private sector can and will always do it better with a profit motive.
Timothy Sykes runs a successful blog where he trains traders on how to make money by being short (betting against)pump and dump penny stocks. His results are truly amazing, he has trained several individuals who are now up over 1000%.
Tim's job is to find and report flaws in publicly traded organizations. A very similar job that the SEC has, both Tim Sykes mission and the SEC's mission is to protect investors and create financial transparency. The main difference is, performance.
With 3700+ employees, billions of dollars and fancy office space the SEC failed to catch infamous ponzi schemes, Enron, scam artists, insider trading and so on.
Now lets compare that to Timothy Sykes, one poor person, as he calls him self, sits in his apartment in front of his laptop and works his ass off to expose thousands of flaws in SEC Filings, Company reports, Press Releases, company secrets and skeletons, huge pump and dump schemes that involve famous television commentators and so on.
The difference, the SEC is going to cost the American citizens 13% more this year while remaining inefficient while Tim's services have created some of the greatest level of financial transparency that we have ever seen in this generation. And unless you paid for some of his services, it cost you, NOTHING.
Let me emphasize, ONE guy, ONE laptop has profitably created more financial transparency for our generation and cost the American people NOTHING!
Here is one of the best examples
$SPNG
May 27, 2009 Sponge Tech is a pump and dump
The results of his research and warning?
"a blatant pump & dump 4 months before the NY Post wrote about it and the SEC halted their stock (and before the stock dropped 90%+"
Tim now runs a service where he and his team research penny stocks looking for misleading information. He charges his users for the service. He also started a website called Investimonials which creates a database of customer reviews on financial products and services, that service is free.
This is another example of the private sector doing a better job than government at a lower cost. While the incompetent politicians come up with another expensive method of failing at their goals, the world outside of Washington is figuring out ways to do their jobs. Maybe in a perfect world, regulating will one day become a private sector job.
