Why aim high when it’s so much easier to bust the little guy? That’s the approach being employed these days by those running the Securities and Exchange Commission (SEC), according to Matt Taibbi at Rolling Stone.

 

Taibbi has drawn attention to a recent speech by Daniel Gallagher, an SEC commissioner, who made it clear that his agency would much prefer to go after small firms violating federal law than large institutions committing billion-dollar frauds.

 

Gallagher is quoted as saying:

 

“It can be tempting to tangle with prominent institutions. But chasing headlines and solving problems are two different things. The question is what will do most good–where our focus should be. And the record seems to suggest that we can do most to protect smaller, unsophisticated investors by focusing more attention on smaller entities...”

 

Taibbi reports that attorneys representing smaller firms are “flabbergasted” by the SEC’s decision-making, granting “free ride after free ride” to JPMorgan Chase, Goldman Sachs and Citigroup while federal regulators take on the little fish.

 

Since the 2008 financial crisis nearly crippled the economy, not a single high-ranking executive on Wall Street has been indicted. “Compare this,” Taibbi writes, “to the comparatively much smaller and less serious S&L crisis twenty years earlier, when the government made 1,100 criminal cases and sent 800 bank officials to jail,” all of which was done during the Republican administration of President George H. W. Bush.

-Noel Brinkerhoff

 

SEC: Taking on Big Firms is 'Tempting,' But We Prefer Picking on Little Guys (by Matt Taibbi, Rolling Stone)

Prosecuting Wall Street, pt. 1 (CBS 60 Minutes)

Prosecuting Wall Street, pt. 2 (CBS 60 Minutes)

SEC Tricks Judge to Help Citigroup (by Noel Brinkerhoff and David Wallechinsky, AllGov)

Justice Dept. and SEC Allow Companies to Investigate Themselves (by Noel Brinkerhoff, AllGov)

SEC Commissioner Wants Investment Advisors Overseen by Group that Paid Her Millions (by Noel Brinkerhoff, AllGov)