To All:
It is apparent that the SEC was asleep at the switch regarding the Berne Madoff $50B Ponzi scheme. The SEC in the preceding decade had multiple warnings and yet did nothing. Why?
We are destined to have more of these financial cons that threaten to destablize our economy unless there is swift action by financial crimes units of law enforcement agencies to hold these people accountable for their illegal acts. Did we learn nothing from ENRON?
See this related post by AJ Strata of The Strata-Sphere:
This Is The Story Of American Corruption
Perhaps instead of reactively responding once the “marks” have be scammed and the money is long gone, how about installing system mechanisms that allow self regulation and behavior? In essence “neighborhood watches” to “police” the neighborhood by folks that have a self interest that can act immediately independent of governmental oversight and action. Government action often come too late to prevent successful cons.
Here’s a unique idea of using the Net, Blogos, the New Media and or “crowd sourcing” to force leverage scarce police resources in these high tech financial crimes. This is a concept developed by law Prof. Glenn Reynolds (Univ of TN, Knoxville) in his book An Army of Davids. The explanation of my analogy to law enforcement as sheepdogs guarding the sheep can be found here:
On Sheep, Wolves and Sheepdogs
(From the book, On Combat, by Lt. Col. Dave Grossman)
If you’re interested continue to read the below discussion thread.
Ron the Cop
AKA Det. Ron Wright (Retired)
*****
———- Forwarded message ———-
From: rocketsbrain <nar9350@gmail.com>
Date: Mon, Mar 9, 2009 at 8:24 AM
Subject: “Crowd sourcing” to police the financial markets.
To: Reynolds <pundit@instapundit.com>
Prof Reynolds,
FYI – I’ve been off line for the last few days. I don’t know if you saw this article in WIRED or someone has forwarded it to you. I think this has merit.
BTW still could sure use a link on a related matter in a $100M bond fraud and manslaughter. The “perps” own/control the local media. The perps use their media as an instrumentality of their ongoing criminal enterprise to conceal their illegal activity from the public. Shades of Madoff.
Det. Ron Wright (Retired)
Ron T. Cop takes on Spokane City Council
[…]
——— Forwarded message ———-
From: rocketsbrain <nar9350@gmail.com>
Date: Mon, Mar 9, 2009 at 8:09 AM
Subject: “Crowd sourcing” to police the financial markets.
If the MSM won’t police the markets to keep the wolves from raiding the flock then require open info/transparency so “crowd sourcing” can act as multiple sheepdogs:-) Actually this is Prof Glenn Reynolds’ concept of an “army of davids.” I was reading this article in this month’s issue of WIRED Magazine on my flight back to Spokane.
Ron
WIRED MAGAZINE: 17.03
Road Map for Financial Recovery: Radical Transparency Now!
By Daniel Roth 
02.23.09
The financial world doesn’t need new regulations. It needs radical transparency.
Photo: AP Photo/Mark Lennihan
Recipe for Disaster: The Formula that Killed Wall Street
On the morning of March 29, 1933, dozens of reporters filed into the Oval Office for a press conference with the new president. Franklin Roosevelt had taken office earlier that month amid the greatest economic crisis the US had seen: 5,700 banks had failed, 25 percent of the country was unemployed, and more than half of all mortgages were in default.
Hope for a recovery was dim; the public had lost faith in the entire financial system. The number of American investors had exploded, from a few hundred thousand before 1916 to more than 16 million. Yet few of them understood the investments they held, many of which had proven to be junk. Supposedly sound companies were exposed as pyramid schemes. Of the $50 billion in securities sold in the previous decade, half had become worthless.
And yet, as reporters huddled around his desk, Roosevelt sounded confident. “I have something on the Securities Bill today,” he announced. That day, members of his brain trust were on Capitol Hill, submitting a plan that would spark the creation of the Securities and Exchange Commission. One overriding concept lay at the center of the legislation: transparency. Louis Brandeis, before becoming a Supreme Court justice, had written an exposé of the financial system for Harper’s Weekly, and one passage in particular had lodged in Roosevelt’s brain: “Sunlight is said to be the best of disinfectants. Electric lights the most efficient policeman.” The proposed bill would require, for the first time, companies to file detailed accounts of their financial health and activity, and bankers would have to report their fees and commissions. As Roosevelt explained it to the reporters around him, the bill “applies the new doctrine of caveat vendor in place of the old doctrine of caveat emptor. In other words, ‘Let the seller beware as well as the buyer.’ In other words, there is a definite, positive burden on the seller for the first time to tell the truth.”
Now, here we are again, 76 years later, facing another crisis of trust that threatens the entire financial system. This time, the issue is no longer a lack of transparency. Since the 1933 Securities Bill, corporate America has been required to disclose a deluge of information in a multitude of ways—10-Ks and 10-Qs, earnings calls and Sarbanes-Oxley-mandated 404s. Between 1996 and 2005 alone, the federal government issued more than 30 major rules requiring new financial disclosure protocols, and the data has piled up. The SEC’s public document database, Edgar, now catalogs 200 gigabytes of filings each year—roughly 15 million pages of text—up from 35 gigabytes a decade ago.
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RBT
AKA Ron the Cop
http://friendsofmarkfuhrman.