I applaud the Obama Administration’s attempt to gain some control over the hodgepodge of regulatory agencies that apparently did not work in overseeing the banks. I am, however, concerned that one super-regulatory agency could monitor all it needs to monitor. Monolithic bureaucracies can sometimes do no more than get in their own way. Hopefully this single regulator, if it comes to be, has the ability to be effective. Now if we could have something like this to protect individual investors from the few bad brokers out there we’d be doing something! The current regulatory scheme for investors is, in many instances, too weighted towards the industry.

The Fairfield Greenwich Group is the latest target of the trustee’s clawback lawsuits. This time he is looking to get back $3.2 billion from the fund which was one of the biggest investors in the Madoff ponzi with more than $7 billion.

http://www.nytimes.com/2009/05/19/business/19madoff.html?ref=business

While trustee ostensibly won’t be going after the principal invested by those who got out of Madoff’s ponzi scheme before it collapse, they are going after profits in ‘claw back’ suits. This type of fraud and similar types of stock fraud are all too common and the problem is you just don’t know when or where the next one will be. Stock fraud claims against broker dealers are potentially easier to pursue because often the broker dealer has some liability.

http://www.nytimes.com/2009/05/13/business/13madoff.html?_r=1

Well, another supposedly strong and trustworthy company is being revealed as a ponzi scheme. This one ‘only’ involved about $8 billion and she was ‘only’ indicted for conspiracy and obstruction of justice. Is it just me or does it seem like the ones you should be able to trust in the financial markets you can’t trust.