Oh, puhleaaaaase, somebody, anybody, help!
The Securities and Exchange Commission has announced yet another public meeting of yet another advisory committee. One more laughable event in an endless stream of idiocy. Apparently, the new theory of Wall Street regulation is that if you can't do anything to prevent securities fraud, maybe you can talk it to death.
Count 'em: Four SEC commissioners and one SEC Chair. These five professionals were presidentially appointed because they supposedly brought something to the job -- background, experience, insight. Despite those credentials, these SEC leaders have no opinions and no workable ideas. Why do I say that? Well, SEC Press Release after SEC Press Release after SEC Press Release reference an inexhaustible supply of panels, roundtables, committees, subcommittees, and subgroups, which, we are told, are necessary to advise, guide, and educate those in charge of the federal regulator. Which sort of raises the question: Why were they appointed in the first place if they are as clueless as the press releases imply?
On May 13, 2010, the SEC issued the following Press Release, which I present to you verbatim (except for the detailed Meeting Agenda, which you can read for yourself at http://sec.gov/news/press/2010/2010-77.htm):
SEC Investor Advisory Committee Announces Meeting Agenda, List of Participants
FOR IMMEDIATE RELEASE
Washington, D.C., May 13, 2010 - The Securities and Exchange Commission's Investor Advisory Committee today announced the agenda for its public meeting to be held on May 17, 2010. The Committee was formed by the SEC in 2009 to advise the Commission as to its regulatory priorities.
Dan Ariely, an expert on behavioral economics and author of Predictably Irrational, will discuss his work with regard to factors that influence investor decision-making. The Committee will also hear from a panel of experts on the topic of mandatory arbitration provisions in customer agreements with brokers. The panel will consist of Linda Fienberg of FINRA, Patricia Cowart of Wells Fargo Corp., Jennifer Johnson of Lewis & Clark Law School, and Barbara Black of the University of Cincinnati College of Law. Other issues to be discussed include the fiduciary responsibility of investment professionals (including advisers and brokers), money market fund "net asset value" calculation, and the potential use of public service announcements to provide investor information. The Committee's subcommittees will also report on the status of their activity, including analysis of potential disclosure regarding environmental, social and governance issues.
The meeting at the SEC headquarters building at 100 F Street, N.E., Washington, D.C., will be open to the public with seating on a first-come, first-served basis. The meeting also will be webcast on the SEC's website.
For additional information about the meeting, contact the SEC's Office of Public Affairs at (202) 551-4120.
Lemme see if I got this. In 2009, over a year ago, they formed an SEC Investor Advisory Committee "to advise the Commission as to its regulatory priorities." Is this truly a puzzle? Am I to honestly believe that the SEC's Chair and four commissioners have no idea as to what their regulatory priorities are?
How about I give you folks a clue: Your regulatory priority is to protect the public.
Sadly, a year later, it doesn't appear that the SEC Investor Advisory Comittee has accomplished much. After all, the SEC continues to hold public hearings in 2010 in order to figure out what its regulatory priorities should be. Of course, let's be blunt if not a tad indelicate here: This mammoth struggle is little more than seeking a useless answer for a nebulous academic question. These are just not the days for philosophizing about regulatory priorities.
At the Investor Advisory Committee's public meeting about what the SEC's regulatory priorities should be, Mr. Dan Ariely is slated to discuss "factors that influence investor decision-making." Mr. Ariely is an expert on behavioral economics. Okay, not exactly sure what that is but it sounds impressive. Moreover, Mr. Ariely is the author of a tome titled Predictably Irrational. What I'm not getting is why does the SEC need to schedule a public meeting for Mr. Ariely to inform the SEC of his opinions and positions? Isn't that all in his book? Wouldn't it have been a hell of a lot more efficient to simply have sent the SEC Chair and commissioners a copy of his book in 2009?
I also note from the Press Release that bureaucratic mitosis has already divided the vaunted Investment Advisory Committee into multiple Subcommittees, each of which is slated to report on the status of its own activities. I'm sure it will be standing room only when the subcommittee folks analyze "potential disclosure regarding environmental, social and governance issues."
It's bad enough that the SEC chartered this Investor Advisory Committee over a year ago, it's bad enough that this committee has already split into multiple subcommittees, and it's bad enough that they are holding public meetings to propagate this silliness. What's more troubling is that SEC staff and executives will likely waste time sitting in on the public meeting -- as if there aren't more pressing matters demanding their attention (and, no, I am not talking about the annual online pornography awards show). At some point, isn't enough, enough? Does the SEC have endless hours and staff to waste with such nonsense?
Are you folks at the SEC aware that on February 6, 2009, SEC Chair Mary Schapiro delivered a Speech http://www.sec.gov/news/speech/2009/spch020609mls.htm at the Practising Law Institute's "SEC Speaks in 2009" Program and said the following:
[I]n addition to our enforcement priorities, the Commission will of course also have a full plate when it comes to our policy and rulemaking agenda.
In deciding upon regulatory priorities, it is vital that the SEC re-engage with the people we serve: investors. The investor community - from the largest pension fund to the family who has saved in their 401(k) or 529 plan - needs to feel that they have someone on their side - that they can go to the SEC to seek redress, or to have their opinions heard.
To that end, we will form an Investor Advisory Committee to ensure that the Commission hears first hand about the issues most concerning to investors.
Fifteen months ago, Chair Schapiro said that the SEC had a full plate for its agenda -- but it doesn't look like anyone has yet to touch their food. She said that it was "vital" for the SEC to re-engage with public investors and that we need to feel that someone is on our side. She promised to fling open the doors at the SEC so that we could seek redress and have our opinions heard. Sadly, over a year later, the SEC is floundering about in search of its mission.
Fine words and blustery committee meetings only go so far. Doesn't Chair Schapiro think that a great way for the investor community to feel that they have someone on their side is for the SEC to actually do something beyond creating committees and holding public meetings? If Chair Schapiro is truly concerned about hearing our opinions, then set up an interactive website or forum -- boy, will you get all the opinions that you want. Then there is the misplaced perception that we want the SEC to hear us. The problem isn't whether the SEC is hearing us. The problem is that the SEC (and most bureaucracies) never seems to be listening to us.
Years ago, before the Great Recession, before Wall Street shook and crumbled around us, that was the time for all this leisurely chatting. That was when the SEC needed to have created a Plan A, a Plan B, and and Plan C. Instead, they created Roundtable A, Committee B, and Subcommittee C. No, I'm sorry, but enough with these damn SEC public meetings and fanciful panels. Fix the mess. Do something. Talk is cheap -- and yours seems to be endless.
For some additional context, please read