Posted on 11/22/2004 4:17:22 PM PST by OESY
...In an era of general acceptance of deregulation and privatization, Mr. Spitzer has introduced the world to yet a new form of regulation, the use of the criminal law as an in terrorem weapon to force acceptance of industry-wide regulations. These rules are not vetted through normal authoritative channels, are not reviewable by any administrative process, and are not subject to even the minimal due-process requirements our courts require for normal administrative rule making. The whole process bears no resemblance to a rule of law; it is a reign of force. And to make matters worse, the regulatory remedies are usually vastly more costly to the public than the alleged evils.
No good solution comes readily to mind. We could federalize insurance regulation, though federal regulation did not prevent a "Spitzer scandal" in the mutual-fund industry. And it could, of course, make the situation much worse. Ominously, Senate hearings are now pending on the insurance industry, and, we just might get another Sarbanes-Oxley....
Since Mr. Spitzer wins his cases in the media, where business is now all but defenseless, the best hope is for the American business community to develop its own public voice. The free-market scholarship needed for this purpose is available, though it is rarely availed of in these fights. Too often the corporate defenders conclude, out of ignorance to be sure, that the opposition really has the better case.
But make no mistake: Eliot Spitzer represents, wittingly or not, an attack on the entire corporate free-enterprise system. Clearly we need new or invigorated institutions to defend industries and companies publicly when they come under unwarranted or disproportionate attack. Responsible leaders of the business community should make it a high priority to develop these capabilities before more harm is done.
(Excerpt) Read more at online.wsj.com ...
Granted, Spitzer is an agenda-driven political hack.
But business brought this on themselves by their complete LACK of oversight and honesty; Enron, Global Crossing, etc.
Average Americans will not fight to free business from unnecessary oversight and regulation when current oversight and regulation are obviously miserable failures.
Quit stealing from and cheating your shareholders, employees, and investors - then we might be more sympathetic to moans about the Spitzer attack dog.
Yep, the free market needs more advocates on a public stage.
I'm not Spitzers biggest fan, but the companies he goes after, are impossible to defend in practise.
Simply put, Spitzers M.O. is simplistic (he admits it so openly), he looks for conflicts of interest where somone is getting harmed in some way from not being aware of the conflicts, then he gets the E-Mails which are usually so blatant and bad it almost seems impossible that anyone would be so irresponsible to write them.
Companies can avoid Spitzer, but to do so, avoid conflicts of interest, and operate in the best interests of the client, or shareholder, and provide information, and don't go sending out e-mails and memo's mocking so said clients and shareholders.
Seems to me corporate capitalism took care of the problem of having some bad actors around.
The only thing Spitzer is going to end up doing here is chasing all of New York's largest employers out of the state. It's not like he has the authority to prosecute a securities firm in North Carolina.
Spitzer bit off more than he could chew when he made that idiotic decision to go after NYSE Chairman Dick Grasso. Kudos to Grasso for digging in his heels on that one -- the State of New York is going to look foolish when Grasso keeps his entire compensation package.
Criminal law should be the last resort not the first. For one thing it is expensive. It requires higher burdens of proof than civil law.
Its funny you should mention that. When I was getting my MBA, my last assignment in my last class, was a project on Dick Grasso. I also had the luck of having a professor (same class, he assigned the project) who was friends with Dick Grasso.
While I think Grasso is far from being the horrible person the press and Spitzer portrayed him as, he also is not exactley the angel either. His ethics are questionable, Spitzer thought he could scare grasso and hang his head on a wall like another trophy. Grasso, took this personally, and forget backing down, but is going big game hunting right back.
Interestingly, this all could have been avoided, Grasso offered to return back chunks of the money Spitzer wanted, if Spitzer would publicly acknowledge that Grasso had acted honorable, and did nothing wrong.
SPitzer screwed that up, and it might have hurt him. One of the most unethical people involved in this whole mess and somone who should face prosecution is Carl McCall, the former dem nominee for governor.
Um, no. What makes SPitzer so dangerious is that he would go after a company in North Carolina if it did any kind of business or had shareholders in New York.
The companies he's going after aren't all new york based, he's gone after companies that are located out of state, he's using a pretty liberal interpretation of his juridition, but apparently he's got it in his rights.
If your a company based in Virginia, he can, and would go after you, his operating methods seem to be to latch on to the one thing you do do in NY (i.e. customers live there, or some kind of business is done there, or, simply listed on one of the stock exchanges, or shareholders live there, etc) and then go after you for whatever cause he saw.
Simply put, to avoid him, you have to avoid anything and everything NY wise, which is impossible if your a public company.
Generally, thats right.
Spitzer is the exception. Most of his cases don't even need to go to the courtroom. He'll pound away at the company in the press and bludgeon the stock.
His prosecutions also wind up generating revenue in settlements.
Hence a perverted incentive to find new companies to prosecute to generate revenue.
The Carl McCall angle is exactly why I'm rooting for Grasso in this case, regardless of whether he was right or wrong. It is disgraceful for the NY state attorney general to put Grasso on the spot like this while failing to prosecute the members of the NYSE board (including McCall) who offered him the compensation package in the first place.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.