Most Ludicrous Proposal Ever

The SEC wants to ban false information spread about companies. What a great idea! I am sure they will have great success….not:

SEC Chairman Christopher Cox said the investigation is aimed at “ensuring that investors continue to get reliable, accurate information about public companies in the marketplace.

Chris, guess what? We already have that – it is called the market price. You can’t fake that. This is just another plan to increase the size of government. It will result in absolutely nothing except wasted tax dollars, but I am sure someone will feel better now.

Note: If some knucklehead wants to write misleading information on a chat board (and how do we define “misleading”?) and some bigger knucklehead wants to believe it and then act on it, I say that is a marriage made in heaven, not an opportunity for the government to step in.

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4 thoughts on “Most Ludicrous Proposal Ever

  1. This is interesting:

    “Cox said the probe will provide an opportunity to make sure brokers and investment advisers have “appropriate training for their employees and sturdy controls in place to prevent intentionally false information from harming investors.””

    Well the controls are already there. Has Cox, brokers, and investment advisors ever heard of something called a stop loss order?

  2. Funnily enough, you have to first define what trading information is. What exactly is “Good” information?

    Other than PnL, who can decide what the correct (good and true, etc..) information is?

  3. Great idea!

    Let’s start with requiring public companies to disclose their earnings each quarter in a public way for all to see. I am aware that the SEC requires companies to file Form 10Q, which supposedly does this. But these are often (too often, in my opinion) in error, either because of careless mistakes or deliberate attempts to deceive the investing public. And why not? If they get caught, they “restate” their earnings, sometimes going back years. What happens to the people who invested based on this misinformation? They lose money. What happens to the people responsible for the bad information? Nothing. They generally continue on in their high executive positions receiving outsized compensation. One way to stop this is might be, in the event of a “restatement” the Chief Accounting Officer of the company is sent to a prison camp for three months for the crime of filing a false statement with the government.

    No, I am not a nut. I don’t really believe that this will ever happen. My point is that the SEC is having problems implementing the enforcement powers it already has. It should fix these situations before it asks for more powers.

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