Although many thought that the SEC's nadir was their failure to
detect the Madoff and Stanford frauds, the missing $1.2 billion in
customer funds at MF Global shows
that the incompetence of financial regulators in the United States
has now sunk to previously unfathomable lows. The investing
public's only hope is that they have hit rock bottom and will now
Privatization of law enforcement duties has a long history.
Abraham Lincoln probably regrets not being guarded by his regular
Pinkerton detectives the night that John Wilkes Booth entered the
theater. Municipalities regularly use private security officers to
guard government buildings, the care of prisoners is often
privatized, and bounty hunters are rewarded for catching fugitives.
While the city provides a minimal level of police service, San
Francisco is divided into patrol areas and licenses were auctioned
off to private security firms. The private contractors, who can
make arrests, write tickets, and conduct investigations, customize
their patrol services to the individual needs of the resident. The
independent companies answer to both a government body and the
"Privatization of some SEC functions is what my firm has been
doing for 30 years," said Todd Collins, a partner at Berger
Montague. "The plaintiff's securities bar is demonized for doing
too much, just as the SEC is criticized for doing too little."
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