Mr Spitzer, the prosecutorial actions you suggest in your piece are dangerous.

1. You want the commission to invent false motives for – excuse me, “investigate” - various executives and board members by analyzing the accuracy of the information they received and any potential conflicts of interest contained therein. The point of these “investigations” not being to determine whether there was any wrongdoing, since that has already been presumed, but to create the appearance of business decisions made in bad faith, which although wholly implausible yet impossible to disprove, the commission can use to:
2. Create prosecutable criminal behavior where none existed. But because enforcing banking legal violations relies on the attribution of bad faith – essentially, fraud – to business decisions, the first step is really the only one you need. So even though every action a board took may have been legal, if the commission determines that it’s possible that the board’s incentives were wrongly aligned, all those previously legal actions become criminal.

What you’re suggesting is that Angelides use emails, compensation metrics, etc. – all of which were written, devised, and worked well for years before this confluence of economic events exposed them as potentially bad - to criminalize those business decisions. Obviously, many of those business decisions were, but to contend, as is necessary for the commission to do, that corporate boards and executives set compensation structure and determined corporate governance with either negligence of or the actual goal of wrecking their companies is beyond irresponsible.

The scariest thing about your proposal is that you consider your civil suit of Dick Grasso to be a model of investigatory behavior. A case predicated upon “conflicts and aberrant information flow” is a laughably low burden of proof. Your suggestions sound like the DAs on Law & Order who always seem to be more interested in using their extraordinary power to achieve a desired result than actually upholding the law.

Also – I understand that you’re just suggesting the commission go after those companies that received TARP funds, and that the Grasso thing was because the NYSE is a non-profit, so I appreciate that you’re making a distinction. I’m not saying that investigations aren’t warranted, because they are AND any company that accepted bailout money ought to submit to whatever scrutiny the government wants; what I’m saying is that we need an actual investigation that goes in and finds out the truth – not a witch hunt where the outcome is predetermined by the commission’s charter.

Good post

I fail to find the word prosecute in Spitzer's column and your alarm about the suggestion for transparency over the use of " emails, compensation metrics, etc. – all of which were written, devised, and worked well for years" is laughable. No they did not!

Oh it's so scary...

I love the Wall Street answer to any proposal to regulate or supervise their activities--hey, we're ripping you off in plain sight, but if you try to do anything about it, it will just be so much worse.

And then the outrage against the unfair government intrusion: SOCIALISM! ATTICA! ATTICA! WITCHHUNT! FREEDOM! How dare they intrude into the private sector...unless it's to subsidize us or cut our taxes.

Read Taibbi's Rolling Stone article about these blatant schemers. Get mad. AGAIN.

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If I was from Wall St. I'd be concerned about transparency as well... Certain segments of society may take inspiration from the French Revolution and decide to bust out the guillotines and start chopping people's heads off.

When I think of Wall Street's embarrassing excesses, seven words keep resurfacing: lust, gluttony, greed, sloth, envy, pride, -- and wrath...

Wall Street, Mr. Spitzer seems to want what most of us do: a detailed analysis of what went wrong so that we know what to look out for in the future. Only fair since most of us will be called on to bail you clowns out if you screw up again.

Wall Street says: Mr Spitzer, the prosecutorial actions you suggest in your piece are dangerous....

to which I would add, "only to the people who broke the law." To the rest of us, they will be welcome as a way to detect such crimes in the future.

viretarmis:

"only to the people who broke the law."

So floating will tell us guilt and drowning will tell us innocence? Most felony cases never go to trial and are plea bargained. One reason for this to happen. The state or fed doesn't care to prosecute, offers a plea, and hopes to cut the trial time by ~ 2/3rds. God-forbid they have to work and take a case to trial. 80-90% of all cases end up this way

People who lack monetary resource or a good attorney find themselves accepting the plea bargain rather than fight the charges. In any case, the witch is never put to the test and neither is the test proven to be an exemplary prover of guilt as the percentages of guilty but innocent are higher than they should be.

W$:

Isn't this already happening with Merrill and BofA in Federal Court? Federal Judge Rakoff has been badgering the SEC, BofA, and Merrill for evidence of Merrill employees should be rewarded $3.6 billion in bonuses as Merrill is being absorbed by BofA to avoid bankruptcy.

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BofA is blaming its attorneys for the payout of Merrill bonuses moments before being absorbed by it. The SEC stepped in and fined the shareholders of BofA $33 million, rather a paltry sum in comparison, rather than investigate who is responsible for awarding the bonuses to Merrill and fining them. In the end, we have the failure of an agency to do its job and the willingness of two major corporations to stick the shareholders for the fine. See a problem with this? If the SEC will not do its job the same as the OTS in regulating AIG and other banks, who will at some point?

I think the larger problem in all this is pretty well summed up with this statement when Weill was pushing for the combining Travellers and Citibank.

"'The vote comes after the Fed Board hears proposals from Citicorp, J.P. Morgan and Bankers Trust advocating the loosening of Glass-Steagall restrictions to allow banks to handle several underwriting businesses, including commercial paper, municipal revenue bonds, and mortgage-backed securities. Thomas Theobald, then vice chairman of Citicorp, argues that three 'outside checks' on corporate misbehavior had emerged since 1933: 'a very effective' SEC; knowledgeable investors, and "very sophisticated" rating agencies.'"

I guess they all were napping and now they are trying to push the dirt over their droppings to avoid detection. Judge Rakoff didn't have to take this upon himself; but yet he did, when others should have been asking the same questions he was. It would be nice if someone investigated something and did not have the Geithner, Summers, NY Fed connections that appear to permeate everything.