The SEC held a great meeting and pondered what to do. When it was done, it told the companies: you must disclose. Disclose your compensation; disclose your risks; disclose whether your compensation plans tempt your executives to take risks. Disclose why your company is structured the way it is; disclose the skills and experience your directors have. Disclose, disclose, disclose.
Editor’s View The Real Crisis in Regulatory Reform O nce upon a time, the United States had a crisis. Our financial system collapsed; our investment funds were exposed as Ponzi schemes; stock prices cratered; and unem- ployment soared. Times were grim. So the United States did what it always does in crisis, EDITORIAL when all other hopes have failed and no other choice remains: We put the Democrats in Editor-in-Chief Matt Kelly charge. firstname.lastname@example.org The Democrats came to Washington in droves, filling Congress and the White House and government agencies. They stood and told the people, “We cannot Managing Editor let a good crisis go to waste!” The people were pleased; this crisis was a DeAnn Orie email@example.com triple-whammy doozie, and if the Democrats could leverage something this severe into a wave of reforms, we’d all be in good shape. Assistant Editor The king of the Democrats, Barack Obama, promised even more. Jaclyn Jaeger Two agencies, the Securities and Exchange Commission and the Com- firstname.lastname@example.org modities Futures Trading Commission, would become one. Many Director, Production & Design rules would be simplified into few principles that all could under- Erin Lynch stand. All who had business before the government—creatures called “companies”—would be treated firmly, but fairly. Expectations would be made clear. Punishments would be certain. And the people would CONTRIBUTORS reap the benefits. Melissa Klein Aguilar Melissa Paschall Lawmakers in Washington held many hearings. Then they held more. They all talked Neil Baker K. Sue Redman about a magic genie called the “systemic risk regulator” and how important it was, al- James Bone Andrew Savitz though nobody knew what a systemic risk looked like or what its regulator would do. Bruce Carton Richard Steinberg They promised that this genie would speak for all of them, with one voice, and tell com- Stephen Davis Scott Taub panies what to do, and the people were still pleased. Brian Gramm Lou Thompson Jon Lukomnik Tammy Whitehouse Then something strange happened. The Democrats all went into their secret room to Todd Neff Ross Williams write their plan for reforms, and when they came out—the reforms were exactly what the people had seen before! The SEC and CFTC were still there, and a whole new agency, the Consumer Financial Products Commission, was there too! This wasn’t just the same; it BUSINESS was worse! Companies were confused.
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