The Wall Street Journal has published a fascinating article which exposes how the SEC directs many cases to its own courts, in turn securing an over 90% success rate. The WSJ has investigated hundreds of cases and found that when the SEC sends cases to its own court, with its own judges, it wins 90% of the time, versus only a 69% success rate in federal courts. In appeals, the success rate is 95%, and the SEC court often raises penalties on appeal. A former counsel to two former SEC commissioners said about the SEC commission that, “the commission is akin to the prosecutor and then, in an appeal, the judge in the same case.” Mary Jo White, head of the SEC, has said the SEC’s court is “very fair”, but the SEC is currently employing judges who have actually never ruled in favour of a defendant. According to the article, a former SEC judge said she thought the system was slanted against defendants at times. The SEC has had its own in-house courts since the 1940s.

FINSUM: This is an eye-opening article about the inherent unfairness of the SEC’s courts. This does not seem to represent due process of law.


Source: Wall Street Journal


The main parties of the US government are reportedly finding common ground on some new proposals which seek to move the country towards a tax system more common in other parts of the world. Democrats and Republicans are seeing some agreement that a consumption-based tax system, as opposed to an income-based tax system, might be a viable option for the US. Such a system adds a variety of taxes, such as sales taxes and “value added tax’ to transactions, in effect taxing consumption rather than income. The system is said to help stimulate growth by not taxing savings and investment much at all, an aspect that helps encourage more investment and innovation. However, some view the tax as hurting lower and middle-income workers since it places a tax burden disproportionately on them as it effectively lowers the tax take on higher income individuals. Conservatives worry that some forms of consumption-based tax, such as value added tax, might make it “too easy” to increase tax revenue collection.

FINSUM: This would potentially be a major change to the US tax system, but there are numerous concerns regarding it—not the least of which are taxing the poor too much or making tax collection too easy to increase for the government. However, like seemingly any tax changes in the US, the likelihood of these measures getting through seems tiny.


The New York Times has run a disconcerting and eye-opening article which covers bad behaviour by oil companies and investment firms alike in emerging markets. In particular, the piece focuses on the ultra corrupt government of Angola, and how western firms have been complicit in the corruption and human tragedy occurring there. The country has a major health crisis and the highest rates of child mortality in the world, yet the government, including the presidential family, is able to earn billions by taking bribes and pocketing payments from foreign companies. Recently, groups have urged governments to force companies to disclose the payments they make to countries around the world as a way to help ensure such money reaches state accounts instead of private wallets, and Europe and Canada are now requiring their companies to make such disclosures. Companies like ExxonMobil, Chevron, and ConocoPhillips are active in Angola, while Goldman Sachs and Carlyle allegedly made investments in the country which allowed Angolan officials to secretly make massive sums of money. The US government, for its part, has a very poor track record of backing corrupt and autocratic leaders in the country, and this piece argues Washington could make a real difference if it merely used its influence.

FINSUM: This is a staggering article which shows just how bad things in Angola, and presumably other frontier markets, are. The US, like Canada and Europe, should hold itself to a higher ethical standard than countries like China, who readily pay bribes and are the example for how American corporate lobbyists want to model US behaviour.


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