> The SEC embodies the modern drift of the administrative state at its worst; its many regulations are not laws passed by Congress, which is the only branch empowered to write legislation.
The SEC is empowered by Congress to enact regulation, see the Administrative Procedure Act.
Anyways, as a director of a publicly traded company, Elon Musk is well aware of information disclosure rules.
Your argument is couched in libertarian fantasy, not reality.
The SEC is the only financial regulatory body that is a real public institution. Isn't everything else just private corporations who only give the impression that they're public regulatory bodies?
Given Wall Street's lobbying power, the regulatory bodies for Wall Street has always been weak. I don't foresee this changing for the same reason.
> the SEC is one of the branches of government that I trust almost as much as the FDA
Hm. I made this comment elsewhere but:
The SEC has big structural problems. Way too close of ties with the people it is supposed to be regulating.
Take the example of this SEC investigator [0] whose boss got a call from one of those Wall Street hedge funds under investigation and suddenly he's fired! Mysteriously, that boss gets a job with the same firm a few months later. Oh, the kicker? The person who made that call from the hedge fund? Appointed to be the SEC chair in 2013.
Yes, they are effective at chilling speech and forms of legal trading. They are not effective at preventing trading on information, for example, the SEC and DOJ secured indictments against Ukrainians and Russians which it will never extradite. Wow a pen stroke after an expensive investigation, congratulations. Fix your damn IT systems if you want confidence in the securities market.
> are you taking issue with reason the law exists
Yes, I am. The industry takes these laws seriously without the SEC because all the SROs already had these prohibitions before the SEC copied and pasted some parts into the Code of Federal Regulations or created 10b-5 convictions that are SOMETIMES upheld by appeals courts before stripping them down in other circuits.
> The SEC simply wants to expand their regulatory power outside of what they are permitted to do and is flexing on a big player for the media attention.
No, they are not. The SEC's goal is to protect consumers and the general public, and like most other regulatory agencies, have been doing a good job at it.
I feel like there is a growing distrust in the government (at least in the US) and this is not a good thing. If you don't like what the SEC is doing, get involved in a democractic way (voting, organizing, etc.) and change it.
> Countries change laws to give their citizens access to important products. It's not about the company.
And Congress was lobbied to do that and they declined. Is your argument that 'they should have done it' means 'the SEC isn't allowed to enforce existing regulations'?
I concede your point regarding the FTC, and to modern consumer protection regulatory systems in general (though I have other problems with those). But the SEC is an exemplar of how our politics cripples agencies which can only function well by peeking behind the curtain, so to speak. The SEC has neither the resources nor mandate to match the power of the industry it regulates, which is why it mostly just goes around issuing the financial industry equivalent of parking tickets. The Consumer Financial Protection Bureau (CFPB) would be another great example, but it barely even got off the ground before it was almost completely neutered. Beyond the FTC, most consumer protection regulation successes have been at the state level.
The IRS is a good example, especially of the dynamic in evolution. It has to walk a fine line between applying consistent, clear rules and catching tax avoidance schemes by looking to the underlying substance of financial schemes rather than just the mechanics. And for the past couple of decades it's increasingly struggled to do that effectively, though mostly for political rather than legal reasons (taxation is one of the few areas where courts still accept intrusive, individualized examination by regulatory agencies as a matter of course).
You're right. This is why we don't want a completely _free_ market, we want a _competitive_ market that has actors to prevent and punish fraud and abuse.
> if Bernie Madoff were to go to the SEC and ask them "I don't know how to run a Ponzi scheme legally, can you please update the guidelines to make it easier", of course the SEC is going to refuse.
The actual problem is that no part of the government wants to be the one to tell you if something is legal, because whoever actually makes the decision takes the blame for the consequences one way or the other.
So Congress punts and passes unclear laws. Then the SEC refuses to comment. Then the courts send you away if you try to get them to decide by asserting that you don't have standing because no one has tried to enforce the law against you yet. But then you have no way to know if they'll try to enforce the law against you in the future -- and the only way to find out is to do the thing that may or may not be illegal and see if you get charged with a crime.
Which is bullshit. Somebody should have to officially tell you if you're allowed to do something or not, ahead of time.
And if you're Bernie Madoff, all they have to do is tell you that no, you're not allowed to do that, and here's why. But then if you think you are allowed to do that, you would have standing to challenge that official determination in court.
> It should not be adjudicating any kind of legal controversy. That is not the role of the executive branch.
Which they aren't doing. They're deciding whether to take Apple to court. If you don't think the executive branch should do that, do you believe the AG's office & the FBI should operate under the judicial branch?
> It's very often worse. Executive agencies often have legislative functions, i.e. APA rulemaking, as well judicial functions, e.g. in this matter. The SEC is another one, (see SEC vs Jarkesy currently before SCOTUS).
Not all rules are laws. Not all judgements are legal judgments. The executive branch is absolutely responsible for making principled decisions, which means rules & judgement. The irony of citing a case where the SEC is before SCOTUS as an example of there not being a separation of powers is... amusing.
> SEC considers it self to have jurisdiction over the transactions that grown-up individuals do.
The SEC considers itself to have such authority because the laws passed by Congress explicitly give it that authority. If you have a problem with that authority existing in the SEC, your complaint should be directed at Congress, not the SEC’s factually accurate belief in the existence of its legal authority.
You’re thinking of something else. FINRA is a non-profit self-regulating organisation. It has no power over anyone who doesn’t voluntarily submit to its rules. It is not a part of the government.
The SEC was created by the Securities Exchange Act of 1934. It regulates FINRA [1].
The regulator the SEC regularly has turf battles with is the CFTC [2].
> Law enforcement and courts aren't funded in a way that makes that effective
In the 1930s, the Congress realized that financial crimes were (a) prevalent, (b) serious and (c) difficult to investigate and prosecute. So it created the SEC [1]. Its specialists, with the budget, focus and mandate to pursue securities-related violations, have been effective (relative to pre-1930s finance).
Regulators make rules. They also enforce them. We have no top cop for technology. The costs of that gap are becoming apparent.
>and still SEC considers it self to have jurisdiction over the transactions that grown-up individuals do.
Umm, isn't that the entire purpose of the SEC or even more broadly the purpose of all contract, finance, and commerce laws? Just because someone is moving bits around instead of pieces of paper doesn't mean the law doesn't apply to them.
The SEC is empowered by Congress to enact regulation, see the Administrative Procedure Act.
Anyways, as a director of a publicly traded company, Elon Musk is well aware of information disclosure rules.
Your argument is couched in libertarian fantasy, not reality.
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