Thursday, October 13, 2005

Courts interfere with SEC

Sad to say that business groups have obstructed the SEC from imposing excellent rules regarding the independence of Boards of Directors for Mutual Funds. What are they afraid of? Its a said day for capitalism when management does not want to be accountable to their boss. The shareholder investor. The independent investor put up the cash and hired management. Not the other way around.
Senior managers are acting like spoilt professional atheletes and trashy media celebrities. Wanting their cake and eating it also.
The market revolves around trust. Mutual funds and companies that without independent boards will eventually experience sub standard returns. Quite a few will crash and burn. Where will this court case be when more scandals hit the front page and our pocket books. Polticians will rush to enshrine these rules in hastily drafted legislation. Management has pulled the pin on the hand grenade. The grenade will eventually go off. Who will be holding it?