Hiding bad information, in this case billions of bad subprime loans, doesn't go down well with the SEC. When you look at the extensive losses across the industry, it's probably not much of a stretch to guess that others will be having conversations with the SEC. If these allegations turn out to be true, this would be a highly disturbing turn of events.
Embattled investment bank Merrill Lynch & Co. acknowledged Wednesday that federal regulators are investigating matters related to its holdings of high-risk mortgage debt and said it is cooperating fully with the inquiry.As much as I applaud the SEC for taking action, why are we only seeing this now? Where was the oversight when we needed it? I can accept that losses happen and that "greed is good" keeps Wall Street moving, but considering the record-breaking numbers and industry wide involvement, shouldn't someone have stepped in a few years ago? How many more lessons do we need to see that regulation and oversight is needed. This is what we should expect from our leaders.
The staff of the Securities and Exchange Commission began the investigation on Oct. 24, the world's largest brokerage firm said in a regulatory filing. It did not provide details. Recent news reports have said the SEC inquiry includes deals that Merrill struck with hedge funds to allegedly cloak its vulnerability to so-called subprime mortgage debt. The SEC has not publicly commented.
There's no need to squash legitimate business and to push businesses away from making profits but it's about time we get back to finding some middle ground because this just isn't working. We shouldn't have to re-learn bad experiences from our own history.
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