Well, re-read my posts; I don't discount or ignore personal responsibility; caveat emptor derives from personal responsibility and accountability. Before Madoff, the SEC consistently ranked high in the public and securities industry view as a prudent and reliable regulator; it was cost-effective too, as it is funded primarily by filing and registration fees. Yeah, it blew Madoff, but I doubt you find even the most knowledeable and sophisticated investors not thankful of the public disclosure rules the Agency promulgates for the benefit of investors!
The SEC reputation may have been good once but I not sure it was deserved or even true this last decade.
The dot com bubble, with unholy alliance between analyst who were really just shills, and the IPO side of brokerages.
The Enron, and WorldCom accounting and trading scandals.
Eliminating the uptick rule and failure to enforce naked shorts.
These are all example of significant SEC failures. It isn't that we need new regulations but simply enforcing the ones that existing ones would be great new start.
I read Sorkin's
To Big to Fail and Cohen's
House of Cards. In both books Cox comes across as passive player completely out of his league and competence level. All of the major players are Paulson, Bernake, Geitner, Jamie Dimon, and many others are begging the SEC to do their jobs. The SEC is failing miserably.
Now Elliot Spitzer, may be grandstanding arrogant SOB, as well as a philanderer, but the NY Attorney General office did more to "regulate" Wall St. than the SEC did this last decade.
I think John McCain was right Bush should have fired Cox early on. I also believe that country would be much better off, if we shut down regulating agency that fail miserably, much like Reagan did with the Air Traffic Controllers, and we are doing failing public schools.
Fire everybody and let them the reapply for their jobs. The SEC and the agencies that "regulated" Fannie and Freddie are at the top of my list to get the axe.