Author William Cohan did a writeup of the Darcy Flynn story yesterday, and couched it in the form of a call to dissolve the SEC and remake it with new structure and new rules. I was initially skeptical – I’ve been getting a lot of, “See, we were right all along, there shouldn’t be any government regulation” letters since my SEC piece came out – but I like Cohan’s idea:
A new SEC would pay its top officials much higher salaries (in line with top private-sector attorneys) but not allow any of them to have previously worked on Wall Street or to go there for five years after they leave the agency. It would have genuine law-enforcement power, as opposed to the SEC’s civil-suit-only mandate, and be able to indict a firm and its top executives for wrongdoing. In other words, the agency would have the chops to regulate a powerful industry badly in need of it, free of conflicts of interest.