How You Can Get Involved to Stop Insider Trading by Congress
FLECK: “Corzine appears to have been able to have lobbied the regulators to get away with what appears to be some sort of an in house repo. That looks like it might have been what happened to customer funds. I should say we don’t really know what they did exactly and we don’t know how much has been lost.
But I think they have certainly undermined confidence as it pertains to people feeling like brokerage firms are creditworthy. Now there is all of this angst over hypothecation, rehypothecation. I don’t know that it will change the credibility of the stock market, that’s been a slow leaking boat for some time, but I think they are going to have to pass some laws about what these financial entities can do.
Congress is completely incompetent. What needs to happen is financial institutions, whether they are banks or brokerage firms or whatever, they need to make the directors and officers personally responsible for losses. Directors in Switzerland face that, they now face it in Brazil and it used to be that way in our country.
If these financial institutions, if the directors and officers faced personal losses, do you think anyone would have been leveraged up 40 to 1 in the last go around? You think any of this crap could happen? There’s not a chance. Congress is so stupid, they pass Sarbanes-Oxley, did that prevent anything in the last real estate bubble, any of these financial entities from blowing up? No.
Now they’ve passed this Dodd-Frank Bill. It’s just garbage. There are so many intelligent solutions to a lot of our problems and yet all they do is make the situation worse. It’s pathetic.
I’ve been rather vocal, as have others, about how useless financial statements are for financial entities for over a decade and nothing ever changes.”