Is there a case for supervision of alternative investment funds? A new working paper

The task of financial regulation can be broken up into consumer protection (where we worry about small consumers being cheated by financial firms), prudential regulation (where we worry about the possibility of bankruptcy of one financial firm) and systemic risk regulation (where we worry about the procyclicality of financial regulation). Everything that we do . . . → Read More: Is there a case for supervision of alternative investment funds?

Dark Pools

From a recent Zerohedge blog post:

James Brigagliano, co-acting director of the SEC’s Division of Trading and Markets, said dark pools could impair price discovery by drawing valuable order flow away from the public quoting markets. “To the extent that desirable order flow is diverted from the public markets, it potentially could adversely affect . . . → Read More: Dark Pools

Market as Regulator

Regulators We regulate any stealing of his property And we damn good too But you cant be any geek off the street, Gotta be handy with the steel if you know what I mean, earn your keep! Regulators!!! mount up!

The epic words of Warren G in many respects seem to sum up our . . . → Read More: Market as Regulator

Short Selling Under SEC Scrutiny

Short sellers have been vulnerable to attack on the claim that they’re spreading rumors or are out to destroy a company. Companies have mounted public-relations campaigns against them. In a short sale, investors borrow shares and immediately sell them, hoping to profit by replacing them later at a lower price – a sell-high, buy-low . . . → Read More: Short Selling Under SEC Scrutiny

SEC Short Sales Ban Did More Harm Than Good

On September 19, the United States Securities and Exchange Commission (SEC) abruptly banned short sales of financial stocks to protect companies that had come under siege in the stock market. There have been concerns that short sales are behind the big price slides in the market. Many felt that short sellers had contributed to . . . → Read More: SEC Short Sales Ban Did More Harm Than Good

Bear Stearns Collapse: Why It May Also Be the End for the SEC

The Securities and Exchange Commission (SEC) was set up as a reaction to the stock market crash of 1929 to provide oversight of brokerage firms and protect investors. Last month, Morgan Stanley and Goldman Sachs Group, Inc., filed to become bank holding companies. Now with the sale of Bear Stearns, the bankruptcy of Lehman . . . → Read More: Bear Stearns Collapse: Why It May Also Be the End for the SEC