Clash of the Regulators

Short quiz: all answers will be either a) Elliot Spitzer, b) William Donaldson, or c) None Of The Above.

1. Who is the current head of the Securities and Exchange Commission?

b) William Donaldson took the position in February of 2003, taking over from embattled Harvey Pitt, who was generally regarded as ineffective.

2. Who is the Attorney General for the State of New York?

a) Elliott Spitzer has had the position since 1999, and in all likelihood has done things that benefit you, even if you don’t live in New York.

3. Who recently reached a settlement with several major brokerages regarding alleged analyst hyping of overpriced stock for the benefit of the company?

a) Elliott Spitzer conducted a damning probe of brokerage research practices, resulting in massive settlements. None of the firms involved wanted to face criminal charges in the matter, as that would have been a corporate death sentence.

4. Who led charges against Dennis Koslowski, whose trial for essentially robbing Tyco Corporation blind while employed as its CEO began today?

c) None of the above. He is being prosecuted by the District Attorney of Manhattan (not this one, the real one).

5. Who is prosecuting all the Enron executives?

c) None of the above. A consortium of State Attorneys General and the Department Of Justice are handling the various criminal cases. The SEC continues to investigate Ken Lay, who has yet to be charged with any crime whatsoever.

6. Who recently brought charges against several mutual funds and hedge funds for illegal trading practices, despite being a hedge fund investor himself?

a) Elliot Spitzer charged that some hedge funds were able to (among other things) buy and sell stocks to mutual funds at the previous day’s prices. That’s like being able to make a bet on yesterday’s sporting events. It is a well known fact that Mr. Spitzer has been an investor in a hedge fund formerly (and legally) run by noted commentator Jim Cramer.

7. Who is prosecuting noted banker Frank Quattrone for obstruction of justice?

b) William Donaldson’s SEC, although a) Eliot Spitzer is trying to determine if there is enough evidence to bring state charges against Quattrone.

8. Who is prosecuting the fraud case against various WorldCom executives, including former CEO Bernie Ebbers?

c) None of the above. It is being prosecuted by the Oklahoma Attorney General. The Feds are not happy about it.

9. Who has recently been in the Congressional hot seat?

b) William Donaldson has been grilled by the Senate several times recently.

Bonus extra credit short answer question
Given the answers to the questions 1-8, are you surprised by the answer to question 9?

Not at all.