Market Watch
Management Co. able to obtain and analyze data sufficient
to Bernard Madoff
September and October. Although, the overall volume of business available has reduced, more of it’s going to the medium-sized brokers.” Shore believes financial services staff disillusioned with life in London following the banking crisis may opt to work in Edinburgh instead.
Who is to blame: regulators or customers?
In 2005 Harry Markopolos sent a letter to the SEC outlining a logical analysis why in his opinion, Madoff was running a ponzi
scheme. Te
SEC didn’t act on his letter, but many questions are raised by this action, such as:
• How was a private individual, representing Rampart Investment
conclude that Madoff was running a Ponzi scheme, using NO private, confidentia l information from Madoff Securities (the SEC and other regulators are privy to certain confidentia l records that are not public).
• Why didn’t
other customers, or at least a few others, take the time to do their own due diligence and come to similar conclusions? What was so special about Mr. Markopolos?
Clients have unreasonable expectations about many of their investments. Why is this so? A survey conducted by Pricewaterhouse Coopers in Switzerland identified two related problems: 1) clients poorly understand investment
reports and
2) they make unrealistic reporting demands.
It goes on to present the obvious solution for global regulation: a standard
in documentation and reporting. Investors are bombarded Would a fair conclusion be, that
regulation could simply be a ‘database’ that could be accessed by ‘clients’ (investors) served by ‘servers’ (money managers), administrated by ‘admins’ (regulators).
Forex Forums a form of Self-Regulation
While Forex trading itself is unregulated, Forex has a means of self-regulation for highly sophisticated investors, for those who are willing to do their homework. Work is required (in the form of time, reading, and understanding), and there is no vertical subordination, and no official authorities in this space. Admins monitor the discussion to make sure it’s focused on topic, but they don’t normally intervene in discussions (such as deleting posts they don’t like).
The forums do not provide any type of identification proofing, so there isn’t stopping anyone from spreading misinformation anonymously. For
all the value
they provide, and they do provide a unique critique service untouched by commercial interests, they seem to have an equally devastating counterbalance, the ‘rotten apple that spoils the bunch’.
FX TRADER MAGAZINE April - June 2012 41
FX
with reports designed differently according to different standards and yet with the designers own interpretations of their standards.
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