Regulators in bed with the regulated: ho hum, business unfortunately as usual.
This time, the CFTC is investigating the CME Group for their “oversight” of MF Global, which recently lost $1.2 billion in about half the time you can say: “Commodity Futures Trading Commission.” Head of MF Global and former New Jersey Sena-governor Jon Corzine says he “can’t find” the money. Folks, we are not talking about the pocket change we have in our pants pockets. Meanwhile the CME, aka the Chicago Mercantile Exchange—MF Global’s primary regulator—says blithely the books have been cooked. “Really,” as if that tells us anything.
So a dollar short and a day later, the CFTC is going to investigate the CME and its failure to—well—regulate. The CFTC is also investigating the dozen-plus largest futures brokers for similar improprieties, yet another example of regulatory bodies swinging the bat with the ball already in the catcher’s mitt.
“Fellas, to hit the ball, you must swing earlier and at pitches you can hit. Are we asking too much?” Regulators come out of the industry they regulate. These guys are in the industry, they should know, or at least be able to find out what’s around the corner. A regulator is not akin to a prosecutor who comes in like a baseball closer to finish the game; a regulator is the Commissioner. He or she sets the rules of the game and then lets them “play ball.”
I understand that global financial markets move at hyper speeds. But regulators, jump out of bed with the regulated and spot the next issue before it surprises us on page A1 of newspapers around the globe.
Assisted by David T. Martin