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Obama Signals Green Light for Stock Fraud

I disagree. I think that red tape is good, if it means preventing thieves from preying on investors. And let's face it: Unscrupulous stock promoters don't hand out business cards saying "I'm an unscrupulous stock promoter." Weeding them out requires coherent regulation and competent regulators. Raising capital in the markets should be, if anything, harder. Time and again, it's been proven that the markets are simply not capable in dealing with stock fraud. Regulators haven't been all that hot either, but they're all we have.

Chopra and Kalil include hyperlinks to bright-faced entrepreneurs in their "crowdsourcing" blog post. There were, for instance, some fresh-faced bakers of gluten-free organic baked goods linked on the White House Web site. Hey, I wish them the best of luck.

But I see other faces in my mind's eye when I think of cutting red tape in the capital markets: not entrepreneurs but cynical thieves and corporate hucksters whose aim is to line their pockets, not to bake a brand new kind of cookie. Two and a half years ago, before I grew accustomed to this kind of thing, I would have said that I expected better from the man who had been elected in 2008 with such fervent hopes from the populace.

Today, after disappointment piled upon disappointment, I have to admit that I've given up. Obama is a disaster when it comes to policing the markets, and he is only going to get worse now that campaign season is upon us, and his campaign coffers will be requiring constant replenishment.

Wall Street and the venture-capital community can be expected to pour money into the Obama campaign coffers, and I don't blame them. You know there's one constituency that Obama's fundraisers won't be nagging for bucks: the victims of his half-baked deregulatory schemes.

Gary Weiss has covered Wall Street wrongdoing for almost a quarter century. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, �The Mob on Wall Street,� which exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond-trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Conde Nast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book "Born to Steal" (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. "Wall Street Versus America" (Portfolio: 2006) was an account of investor rip-offs. He blogs at garyweiss.blogspot.com.
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