Politics, the SEC and Ponzi schemes

The SEC, under political pressure from Senators, has ordered the SIPC to pay back victims of Allen Stanford’s Ponzi scheme. It might be the right thing to do – certainly the victims believe it is – but it’s troubling when a law is reversed not by legislative action but by pure political pressure. Or I think so, anyway.

UPDATE: I’ll confess that I wish the SIPC was working this way when I was chasing stock brokers.  I once, in a masochistic mood, went through my files and figured I had $3 million in arbitration awards against defunct penny stock firms. One third of that would have been nice to have. Oh well.

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One response to “Politics, the SEC and Ponzi schemes

  1. Old School Grump

    This is politicians at their worst. There is nothing murky about SIPC’s purpose. There is nothing complicated about the fact that it applies to broker/dealers, not to investment advisers. It’s impossible to feel sorry for people who are dumb enough to not learn the difference AND dumb enough to fork money over to someone who styles himself “Sir.” SIPC better fight back hard.