The Five Dumbest Things on Wall Street This Week

Can't You SEC? Watchdog, watch thyself

3. Pocket Change

Maybe timing isn't Bill Donaldson's strong point.

The Securities and Exchange Commission chairman said this week that he'd step down after 28 months on the job. His office trumpeted his efforts at "improving disclosure and transparency," "protecting investors" by stamping out conflicts of interest, and "deterring wrongdoing and securities fraud." Why, Donaldson set out with the aim of "transforming the SEC to reach a new level of effectiveness," the release says.

Indeed, his SEC oversaw the completion of Sarbanes-Oxley rule-making, reformed the mutual fund industry and adopted a rule forcing hedge fund managers to register with the government.

Apparently some business types thought Donaldson overreached with some of those plans. But what's worse is that in the last week the SEC has also uncovered a $48 million budget shortfall tied to new buildings, and been nipped by a congressional watchdog over its weak internal controls -- the very issue the SEC has flogged big companies over in recent years.

The SEC seems to have reached a new level of something, but we're not sure effectiveness is it.