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Looking For Value Destruction In All The Wrong Places

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As we predicted, the Securities and Exchange Commission has launched its investigation into Wall Street rumors. When you have the head of JP Morgan Chase and a prominent New York Times business columnist calling for an investigation, it's a pretty safe bet that the SEC will come running.
We won't bother to point out again that there's very little evidence that the infamous activity that is the subject of the crack down--spreading false rumors in order to profit from a short trade--is actually occurring on any scale that matters. That's yesterday's news.
Our friend Roddy Boyd over at Fortune, however, points out that this seems like a strange priority. The "overburdened enforcement unit is already looking into, to name just a few - mortgage originator fraud, investment dealer disclosure on auction-rate securities, and broker valuations of the arcane vehicle known as collateralized debt obligations (CDOs) that has been the source of so much misery on Wall Street," Boyd writes. "Now the watchdogs are going to chase down trading desk rumors too?"
Boyd also has the temerity to point out the ugly irony of the chiefs of troubled Wall Street institutions calling for these investigations. According to the Wall Street bosses, the rumor mongers are destroying value and destroying lives. Boyd introduces the kettle to the pot.
"So which has proven more painful for Lehman shareholders: the quick-buck artist who passes on some bogus tip - or Lehman's decision to become the most aggressive investment bank to speculate on Southern California real estate?" Boyd asks.
SEC's new red herring [Fortune]