The SEC has created the illusion that American stocks are credibleinvestments. This benefits the American brokerage community. The core ofthe stock fraud problem are some of these brokerage firms. Like J. EdgarHoover's refusal to investigate the Mob, the SEC doesn't seriouslyinvestigate major brokerage firms, the NASD, or the Depository TrustCompany (DTC). If the SEC charged Michael Miliken, why weren't the owners of Drexel charged? Why is the Federal Reserve charged with investigating the DTC? The Feds own sixty percent of the DTC. It's like asking the fox to investigate the murder in the hen house. The Law and SEC policies usually protect the crooks on Wall Street.

The SEC's goal in ending shell sales is to stop stock promotersfrom defrauding the public. Their theory appears to be that increasingcosts will discourage the crooks from going public. It won't work. It willonly drive up the cost of raising money for honest business owners andentrepreneurs. Higher costs means more crooks in the Market and fewer realbusiness investments. The crooks will move to spinoffs long before mosthonest business people realize that spinoffs are the last low cost optionto going public. The SEC will pressure Congress into ending spinoffs.Unlike shells, spinoffs are protected by Section 12 of the 1934 U. S.Securities Act. Congress must change the Law to close the spinoff option.However, excluding honest business people from the Market creates pressureon Congress to reverse the SEC's regulatory policies. Eventually, Congresswill liberalize listing requirements. The cycle will repeat itself. Thecrooks will continue to "Pump & Dump." Some brokerage firms will stealbillions from the public. The farce will continue.

For nearly seventy years, the SEC's mistake has been to focus onform rather than substance. Attorneys believe that you can pass a law orregulation that will protect Society from its crooks. It can't be done.Whatever Law you pass, there is always a loophole. Closing the loopholecreates other loopholes. The process is cyclic. It's never ending.

There are good aspects to the American Securities Laws, like fulldisclosure. However, the Law must serve the best interest of the public.The SEC should ensure that the crooks only get one shot at defrauding thepublic. They should have policies that reduce the costs of going publicrather than be the driving force for higher costs. The SEC should requireinvestors to take a "street smart" course in risk capital investing beforethey can open a brokerage account. It should be taught by the SEC, afterthe SEC becomes "Street Smart."

The SEC serves itself. While the Bear won't walk Wall Street now,it will eventually return the size of Gonzilla. By that time, we'll havehad eighty years of SEC regulatory failure. I doubt the attorneys workingat the "Death Star on the Potomac" will get another chance to serve thepublic and honest business people.

Common sense isn't common. This axiom is truer inside the Belt Waythan in small town America. When you can't afford to raise money for yourbusiness, blame the SEC. When you learn that you can't raise money for yourprivate business and can't go public, blame the SEC. When you lose yourretirement money in the Market, blame the SEC. The SEC serves itself. Youpay them to do it.