If we could ever get the SEC to focus on solving real sytemic problems rather than wasting time and money on a few hi profile scapegoats we could have saved refco investors millions…
Alan abelson (the famously skeptical barrons writer who I love) mentions this week how refco insiders sold big blocks in its IPO 10 weeks ago, obviously benefitting from founder, phillip bennett’s hiding $435m in off balance sheet debt.
For the majority of you who have not religiously followed my blog, ill repeat my proposed change for SEC rules on insider stock sales, which I believe would in one stroke wipe out and or make right billions in illbegotten gains from corp fraud.
My proposal – expand the 13G rule (which forces insiders to disgorge profits from buy-sell trades within 6 months) to also force disgorgement of all profits on stock sales during periods of corporate fraud. This would force refco insiders, esp the founder, to immediately give back their newfound riches to the innocent investors.
The alternative is years of litigation in civil and criminal courts for the founder who will a) be bankrupt and b) have hidden assets in florida real estate and swiss accounts. And his fellow insiders will undoubtedly raise a toast to him every xmas as they will never be asked to give a dollar back as they were ‘innocent’ and beyond the law.
Btw, sarbanes oxley (suxley!) won’t help injured investors one bit.
Also, let’s add the ibanks and accounting firms to this new SEC rule. Why not also force them to disgorge all fees on the IPO or annual audits to injured investors. Forget about suing them out of business. We’ll just face another version later. What we need are rules that can create clear and immediate penalties that directly benefit injured parties. Let the politicians still go after their poor bernie ebers (who probably never understood accounting anyway).
If anyone knows hoe I can ever get a proposal in front of the SEC let me know and ill do more than just whine about it!
Sent wirelessly via BlackBerry from T-Mobile.