The SEC screwed up with the rating agencies and also there was that whole Bernie debacle, but wait! It said today it may create a “fraud college” to train staff to detect market abuses like the Madoff one.
This is an idea that SEC Chairman Mary Schapiro finds “great,” as reported by Bloomberg.
Buy isn’t teaching their staff how to spot fraud what they were supposed to be doing in the first place?
Let’s remember that despite two investigations, three examinations and countless tips, the SEC failed to do anything about Bernie for about a decade. Was it really just because they didn’t take a course in investigating? Or is it evidence of a deeper failing at the agency?
While the fraud course might help a bit, it’s likely to be inadequate to the tasks the SEC will be faced with in the future. An MBA would be even better. But we’re afraid that the SEC is going to need PhDs with expertise in derivatives trading, as duly noted by Harry “you are a financially illiterate bunch” Markopolos.
Unfortunately, no one has figured out how to get anyone like that to work for the SEC.
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