Strip the SEC and Give Even More Power to the Federal Reserve?

Bloomberg is reporting the Obama administration is considering stripping the SEC of some regulatory power and giving that oversight to the Federal Reserve.

The Obama administration may call for stripping the Securities and Exchange Commission of some of its powers under a regulatory reorganization that could be unveiled as soon as next week, people familiar with the matter said.

The proposal, still being drafted, is likely to give the Federal Reserve more authority to supervise financial firms deemed too big to fail. The Fed may inherit some SEC functions, with others going to other agencies, the people said. On the table: giving oversight of mutual funds to a bank regulator or a new agency to police consumer-finance products, two people said.

It's All in the Family - SEC charges former Citigroup Banker with Securities Fraud

Well, well, the SEC actually starts a case. Been so long one forgets they have this authority.

Federal prosecutors charged former Citigroup banker Maher Kara with securities fraud for tipping his brother about upcoming mergers, in an insider trading scheme that reaped more than $6 million in illegal profits.

Federal regulators also filed civil charges Thursday against the brothers and six other friends and relatives for allegedly participating in the scheme which spanned from New York to California and the Midwest for three years or more.

The Securities and Exchange Commission said that Maher Kara, a former director in Citigroup Global Markets' investment banking division in New York, repeatedly told his brother Michael about upcoming healthcare industry deals from at least April 2004 through April 2007.

House Congressional Hearing on How SEC Missed Matloff

More oh gee, how did this happen? stuff on capital hill.

The New York Times did a live blog on the hearing and it's basically a true waste of time, oh, more audits, obviously a $50 Billion dollar Ponzi scheme just fell through the cracks

The real meat will be:

The SEC was warned on several occasions by Boston investment professional Harry Markopolos that Madoff's firm probably represented the world's largest Ponzi scheme. In such a scheme, some investors are paid with other investors' money. Allegedly using such a technique, Madoff was able to produce double-digit returns to investors year after year.

The Wall Street Come Back - Due to SEC Possible Change of Accounting Rules Mark-to-Market

While the pundits threaten and promote Paulson's bail out plan, there are actually other things going on which Wall Street seems to like.

"News that the SEC is working with FASB [Financial Accounting Standards Board] on 'fair value' accounting rules that could delay implementation of the onerous mark-to-market provision are giving stocks fresh legs higher," according to analysts at Action Economics

From CBS Market Watch.

SEC and FASB in negotiations:

Don't Like What's Happening? Change the Rules! - SEC BANS Short Selling on 799 Stocks

The U.S. Securities and Exchange Commission took what it called "emergency action" Friday and temporarily banned investors from short-selling 799 financial companies.

The temporary ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately

I wake up this morning and this is what I find, the entire rules of the game changed overnight. SEC bans short selling

It's one thing to ban naked shorts but to just change a major trading method on certain stocks overnight?

I thought these guys loved free markets? Comrade, not when they are losing money on their stocks?

SEC Investigating Credit Raters

Bloomberg reports:

The U.S. Securities and Exchange Commission is probing whether credit-rating companies changed the way they graded debt as the market for products tied to subprime mortgages boomed earlier this decade, its chairman said.

``The volume of the structured-finance deals that were brought to the credit-rating agencies increased substantially from 2004 to 2006,'' SEC Chairman Christopher Cox told the Senate Banking Committee today. The regulator is looking at whether the companies ``adapted their rating approaches in this environment,'' Cox said.