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But then you have conflict of interest if you're asking SEC employees to investigate companies they hold stock in. The incentive would be to not investigate or impose milder penalties.


No, put the stocks in a blind trust.


How about... just not holding any stocks?


I would argue that the people regulating the stock market should not be allowed to own stocks or any other sector investment, like an ETF focused on the health care industry. THey should still be allowed to own index based investment vehicles like an SP500 ETF.


Hmm. Given that in order to retire in the US you must invest in the stock market that would be a big requirement. Don't get me wrong, I am all for solving this problem, but simply not allowing the SEC employees to participate in the market would be a pretty good way to ruin their retirement.

An alternative would be to instead provide pensions. I don't really see how that happening given the "no handouts at any cost" attitude of the majority party in the House.


Index fund or blind trust, problem solved.


Uh, look up the thread. You're replying to a post predicated on someone else's rejection of blind trusts.


How about a blind trust of index funds? Those blind trusts aren't always blind.


That doesn't solve the problem. Employees will still have a conflict of interest because they will still want their stock's value to remain.


Could you expand on this point? I'm under the assumption that employees wouldn't know the portfolio of the blind trust, hence the blind.


This would make joining SEC a very expensive career move for a lot of people, especially if they only planned to be there for a year or two, and were heavily into former employers or other specific stocks based on their experience in the stock market.


They have to assign their holdings to a 3rd party financial manager/fund/401k/IRA/etc and recuse themselves from any active management of their own portfolio. Not sure if this is an industry-wide requirement, but I had to do this when I worked for a small bond fund some years ago. Zero trading my own account allowed, and required to disclose all personal holdings and activity to the compliance officer who reported to General Counsel.




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