Welcome to Lots, Stocks, and Gavel

22 01 2009

Hello, and welcome to my new project online, a little blog on an aspect of law I find fascinating, securities law.
Why a blog on securities and securities law?

The buying of selling of securities effects us every day, and most of us don’t know it.  Trading in securities is not just something that occurs on Wall Street and the London Stock exchange.  Every time you fill your gas tank, you are purchasing something that was once purchased as a security.  Every time you go to the grocery store, you are purchasing products that were in one way shape or form bought and sold as securities.

The problem most people have with the securities trade is that, although it has an impact on their daily lives, they do not understand what it is, or how it works.  The main purpose of this blog is to give people a forum to better understand what they read on their newspaper headlines.  For example: What did Bernie Madoff do, how did he do it, and how does it affect the people who trusted him?  What is insider trading,  why is it illegal, and what does it have to do Mark Cuban?

What will this blog cover?

Hopefully this blog will be something more than a place for people to go in order to understand the things they hear on the farm report and the stock market page.

Securities law is big in the news these days.  With the largely unprecedented drop in the stock market, the government bailouts of the banks and the automotive industry,  and billion dollar scandals involving prominent traders, issues in securities law are going to be discussed for a long time to come.  This blog will primarily cover the news, including goings on inside the Securities and Exchange Commission, the coming change in rules and legislation, the issues facing the stock market and commodities exchanges, and the enforcement of securities law.  However, unlike the newspapers and the 24hr new channels, I will give a more in depth analysis on what is happening, and will present it in a way that the average layman can understand easily. This blog will also cover issues in securities law globally.  Topics I will discuss include the coming securities law reform in the European Union, and how sharia is influencing the development of securities law in the Middle East.

Since securities law tends to run into other aspects of law, such as bankruptcy, banking, and criminal law; and because of the ongoing crisis in the global economy, this blog will discuss issues beyond the relatively narrow topic of securities.

How did you come up with the name?

Well basically, it is a take of the phrase, “lock, stock, and barrel”.  Since the blog is about securities, I wanted to tie in two more common types of securities, commodities (Lots), and “Stocks”.  I included the “Gavel” because this blog is about the law.


SEC Chairman Cox resigns

22 01 2009

Wait one second?  It is a new administration, aren’t the people from the previous administration supposed to resign?

With cabinet agencies, yes, with independant administrative agencies like the SEC, no. While commissioners of the Securities and Exchange Commission are appointed by the President, they do not serve “at the pleasure of the President”.  The SEC consists of five commissioners appointed by the President to five year terms.  The terms are staggered so that one commissioner is appointed every year.  It is rare, however, for a commissioner to serve a full five year term on the commission. To maintain the independance of the agency, no more than three commissioners may be of the same political party.  Cox’s resignation does make room for President Obama to appoint a new chairman to finish Cox’s term.

What will Cox’s legacy be?

Undoubtedly not a good one.  His chairmanship oversaw the largest economic collapse since after World War II.  The SEC failed to see the signs of the banking crisis that errupted late last year, they also have been accused of having lax oversite in other areas.   The prime example of lack of oversite is SEC’s inability to uncover Bernie Madoff scandal, especially given the size and scope of the damage from the scandal.   In more conservative circles he will also be vilified as an ardent defender  and enforcer of Sarbanes-Oxley, a law which is often criticized as being drawn and past in the face of the Enron collapse, as ineffective in its enforcement, and as too burdensome on law abiding businesses.

The new SEC chairman.

President Obama has designated Mary Shapiro as his choice to fill in the SEC chair position.  She will be the first woman appointed to chair the SEC.  She has a long history of working with the SEC, having been appointed to a term as a commissioner in 1988 by President Reagan, and as acting chairman by President Clinton in 1994.  Undoubtedly she will have a lot of work to do in trying to fix an agency that has been under heavy scrutiny for almost a decade.