Securities Fraud Cases
Securities fraud cases that come to my mind always start with the Bernie Madoff matter. It was very unfortunate. It involved defrauding hundreds of investors of millions and millions of dollars.
I’m sure that law enforcement did everything they could do. That they did everything they could with the laws on the books and enforcement of those laws. The individual plaintiffs did everything they could do as well. They tried to recover as much of their losses as possible. It was unfortunate because there wasn’t much left. There was a bankruptcy involved as well. It was the best outcome given the circumstances and egregiousness of the matter.
The other case that comes to mind is the Enron matter. Enron is a different example than the Bernie Madoff case because it was a different type of breach of trust. That’s what all these securities fraud cases that are out there represent. They are different breaches of trust. Enron was a systemic corporate conglomerate. The founders built the conglomerate on false pretenses and misrepresentations of its value. Unfortunately, the company defrauded a lot of investors in that action as well.
Role of the SEC
It would be better if there was a mechanism for the SEC to handle consumer complaints. For it to enforce those complaints in a way that benefited the consumer would be better. The SEC right now kind of does it’s own thing. It chooses what laws and what rules and regulations to enforce. That can be problematic. There are some individual consumer actions that only the courts can address. Or filing a lawsuit and litigation is time-consuming, it’s expensive and unpredictable.
Political Shift of Regulation and the SEC
I do think the SEC does a good job based upon its limitations and its manpower and its limited budget. Unfortunately, it can’t scrutinize every transaction out there. There are hundreds of thousands of transactions in a given year, if not millions. So it can only do so much at a time. Where they are now is interesting. There’s a big political shift in the role of the SEC and regulation generally. So given that climate, they’re doing the absolute best job that they can.