There are 3 articles in today's paper about Eliot Spitzer going after certain banks and investment firms in a hedge fund scheme that had the participants trading outside of regular hours to the disadvantage of the investing public. A local columnist, Joe Talton of the Arizona Republic, alledges that some Republicans and the Bush administration want to limit the power of states to go after corporate fraud. They won't go after these crooks and want to prevent the states from doing it at the same time?
What is it going to take to get a level playing field on Wall Street for the general public?
Any ideas? Suggestions? Anybody got any inside info on this?

Gee Bill, ain't "inside info" contrary to a level playing field?

I haven't heard from any credible sources that the Bush Admin is trying to limit the ability of states to go after corporate fraud, although it wouldn't surprise me. The risk of politically motivated fraud investigations interfering with interstate commerce is a real one, which is why the Bush Admin may be taking a look at it. Remember, the last administration did very little on the subject as well.

Some state AGs are busy building their Leftist/populist political resumes on the backs of businesses. Furthermore, strange as it may seem, some "corporate fraud" really is limited to only a single state, which means that the Feds would have no role. In short, the jurisdictional questions can be pretty muddy from the gitgo, without mixing in the political motives of the various parties.

On the other side, Federal prosecutors have been known to conducted extended, groundless vendettas against companies or individuals, over the objections of local and state officials as well. The most glaring example in recent times is, of course, Waco. Remember, as far as the local sherriff and the state of Texas were concerned, the Davidians weren't a problem. Going back further, one can find examples of Fed intrusiveness in virtually every state, under both Republicans and Democrats.

So, its a tough situation, and this is just another chapter.

Would that be an example of confusing cause and effect? Allow me to quote an eminent source:



In the current example, do you think the AGs are pursuing these cases because they're leftist/populist, or have they become leftist/populist because they've seen the abuses, or might there be common cause at work instead of cause and effect? This attempt to attack AGs' motives instead of the cases' merits, or to tie those motives to a particular political ideology (there are right-wing AGs too BTW) doesn't add one bit to the debate.

What it will take to get a level playing field, IMO, is greater transparency. As long as the only people who get to see the books are people (accounting firms, boards) who are in bed with the executives, or the undermanned and still ineffectual IRS, abuses will continue. In addition, there's still too little accountability. When it's a major struggle to send even the single biggest culprit to Club Fed before a few years (before springing them to do it all over again) the people around that culprit feel pretty insulated from any consequences. If the upside is millions of dollars and the downside is finding a new job, it's easy to turn a blind eye. When the downside is a decade in a real jail among hardened criminals, the moral choice becomes a little clearer. When an Enron or a Worldcom happens, dozens of people should be going to jail, not being rewarded with exclusive billion-dollar contracts in Iraq. It's only because the feds seem to be actively aiding and abetting the con artists that the states feel a need to step in.