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The sleeping watch dog: aka the Securities and Exchange Commission

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Abstract

Purpose – The purpose of this paper is to expose inefficient regulatory policies and organizational weaknesses at the Securities and Exchange Commission (SEC) that have contributed to a series of regulatory oversights that have produced some of the largest fraud schemes perpetrated on investors. Design/methodology/approach – Sources of information consisted of scholarly articles and articles retrieved from the web. Findings – Findings suggest that although weaknesses that have been exposed at the SEC may not account for any one securities fraud oversight, cumulatively, the weaknesses create negative synergy that increases the probability that a regulatory oversight will occur. Originality/value – This paper serves as a useful guide to alert and educate securities regulators and enforcement, regardless of the country they may operate in, to examine their own regulatory policies and organizational structures for weakness that may be similar to the SEC.

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