Occupy the SEC

In jest, I wrote that we should occupy the SEC, but noted that they are very open to comments and influence by the public. One of the comments to that story was from a group organized as Occupy the SEC and they were planning to comment on the Volker Rule.

They submitted a massive comment letter attacking not only the proposed regulation. It is a 325 manifesto.

“We believe the Volcker Rule is important to the future of the banking industry and, if strongly enforced, will help move our financial system in a more fair, transparent, and sustainable direction. Prohibiting banking entities from engaging in proprietary trading and banning their sponsorship of covered funds are key elements to regulating the financial system and giving force to the Dodd-Frank Act. At its core, the Volcker Rule seeks to make sure that if a banking entity fails, it does not bring down the whole system with it. We appreciate the momentous challenges that the Agencies continue to face in effectively implementing the Rule, and we present these comments to assist them in their task.”

Like most commenters, and even Mr. Volker himself, Occupy the SEC labels the proposal a “500-page web of complexity”. But rather than complain and make some generic statements, Occupy SEC provides very detailed comments on the text of the rule, specific textual changes to the regulation, and answers to hundred of the questions presented in the proposed rule.

From the perspective of private equity funds, Occupy the SEC wants to make sure the rule is broad enough to cover a broad scope of entities by making some changes to the definition of “covered fund” and “ownership interest”.

The comment letter is an impressive piece of work.



3 Responses to Occupy the SEC

  1. E Henry Schoenberger February 21, 2012 at 10:07 am #

    From 44 years continuously licensed in the securities business and former owner of a Broker-Dealer NASD Member Firm specializing only in real estate private placements; and the author of How We Got Swindled by Wall St. Godfathers, Greed & Financial Darwinism ~ The 30-Year War Against the American Dream, foreword by David Satterfield former business editor of the Miami Herald and 2 times Pulitzer Prize-winner —

    Who futher endorsed Swindled on the back cover: “With keen intellect and searing wit…This should be must-reading for every policy maker in Washington and every student of economics and finance.”

    And Marc Loewenthal, Esq, former SVP of Enterprise Risk Management, New Century Financial Corp — also endorsed How WE Got Swindled – from the back cover:
    “Having been on the inside of one of the largest sub-prime mortgage lenders that failed, I can attest to the fact that Mr. Schoenberger has got it right. His insights and historical perspectives are on the money. We need to be focusing on how we effectively regulate the markets so that that this type of crises does not come back to bit us again.”

    The point of my short bio and affirmations of my perceptions is that after reading fragments of the Occupy the SEC position paper – which appears to be written as a lobbying effort by Wall St to continue to make markets to provide liquidity for derivatives – derivatives similar to the kind that created this mess – the only conclusion that is rational is that this “group” which has attached itself to OWS as a ruse – is actually a stalking horse for Wall Street’s continuing ability to avoid re regulating unbridled and unfetterd Greed!

    Disengenuous is not strong enough – Liquiditiy for what — not stocks on any exchange or commodities on the Chicago Option’s Board – just liquidity for financial innovation that is still too complex to explain because it is still based on virtual values and virtual reality.

    • Doug Cornelius February 28, 2012 at 7:33 am #

      Henry –

      You may not agree with all of the comments in the Occupy the SEC comment, but I wouldn’t call them disingenuous. I don;t see anything in the comment letter that would make me think they are a “stalking horse for Wall Street”.

      The comments seem genuine to me and in my reading of the opaque rule and intricate weaving of requirements, seem to be pro-consumer and anti-Wall Street.

      You may have wanted them to push harder, but I suspect that many of the points you disagree with are already set in stone by the statute. The regulations in the Volker Rule can’t go past what is allowed by the law passed by Congress. That law has some deep flaws. So the regulations will be stuck with those same deep flaws.

      (A previous version of this comment was erased when the website crashed recently.)