Flyer online columnist Marty Aussenberg (aka "The Gadfly") held his own in a nationally televised face-off Monday with three Fox Business Network panelists.
Aussenberg, appearing as a guest on FBN's afternoon Happy Hour show, argued that "the fallacy of self-regulation" in the securities industry was at the heart of financier Bernard Madoff's recently discovered $50 billion Ponzi scheme, which defrauded untold numbers of unsuspecting investors. The Fox crew, reflecting the network's bias toward minimal regulation, countered that the fault rested more with the Securities and Exchange Commission, which had been presented with a 21-page report on Madoff's potential irregularities.
"Nobody's perfect. SEC is the cop on the beat, and any cop on the beat can miss a clue, a trail, an informant," responded Aussenberg, who contended that "somebody should start seriously looking at FINRA."
That's the Financial Industry Regulatory Authority, an independent nongovernmental body that, in theory, oversees the financial industry from the point of view of the financial industry itself and which has enjoyed something of a heyday of late in comparison with federal SEC investigators.
Aussenberg had been tapped for his guest appearance after somebody at Fox read his "Gadfly" offering at memphisflyer.com last week, entitled "'As You Reap' ... The Meaning of the Madoff Case."
In that article, Aussenberg, a former SEC enforcement attorney, argued, "I believe the SEC is being scapegoated and turned into the sacrificial lamb for a system of regulation and oversight that was skewed heavily in favor of the 'bad guys.'
"The federal agency I worked for was always woefully underfunded. In spite of the fact that the SEC, unlike most other agencies in Washington, brought in millions of dollars in fees from the industry it regulated, it was always treated like a stepchild by Congress and the president when it came to funding its budget. It was constantly outgunned, outspent, and out-manned by the securities industry and the corporations it was charged with regulating. And then, beginning with the 'regulation is bad' mantra of Reagan and taken up wholeheartedly by GWB [George W. Bush], it was decimated even further."
To read the full article, visit memphisflyer.com.