Eliot Spitzer: Regulatory System Was Structurally Flawed

Question:  Where do you see the flaw having been?

Eliot Spitzer said ” the Regulatory system was structurally flawed, but that is not why this happen.  After the last round of scandals such as Enron, Tyco and we passed Sarbanes-Oxley, ah ha, we have solved the problem.  Now we have another set of scandals.  There are enough laws and regulations on the books for smart, aggressive regulators and prosecutors to make all the cases, what was missing was judgement.  You can’t legislate judgement.   You can’t regulate judgement.  Either the people who are regulators will walk into a bank and say your leverage is too great.  We are going to take actions to pull it back.”

From Wikipedia:

The Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted July 30, 2002), also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called Sarbanes-Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002 in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of the affected companies collapsed, shook public confidence in the nation’s securities markets.

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