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The 5 Dumbest Things on Wall Street This Week: March 9

1. Adios, Allen Stanford

Allen Stanford is finally going to jail for good. That's great news and we couldn't be more thrilled about it. Still, the fact that he eluded authorities for so long will forever taint our view of the Securities and Exchange Commission as being dumb beyond belief.

Stanford was convicted on Tuesday of running a $7 billion Ponzi scheme, the biggest since Bernard Madoff's $17 billion investment swindle. Stanford could best Madoff when it comes to his prison sentence, however, as he faces 230 years in the slammer while Madoff serves out his 150-year prison sentence. (And we don't doubt that the megalomaniacal Madoff does indeed believe he will live out his term and one day leave a free man.)

A Houston jury found the fraudulent financier guilty on 13 counts of a 14-count criminal indictment, including fraud, conspiracy and obstructing an investigation by the SEC. The only rap Stanford beat was that of wire fraud.

To be perfectly honest, we were a little bit nervous about this trial's outcome considering Stanford's winning record against the government. The SEC examined his operations in 1997, 1998, 2002 and 2004, and in each case the regulators concluded that he was most likely running a Ponzi racket. Yet they still did absolutely nothing about it, thereby enabling Stanford the freedom to fleece even more investors.

Robert Khuzami, the SEC's enforcement director, said in a statement, "Today's guilty verdicts send a resounding message that those who violate the law and obstruct SEC investigations will be held accountable. We applaud the skill and tenacity of the prosecutors handling the case."

No questions there, Bob. The prosecutors handling the case certainly did a bang-up job.

But it will be a long time before we get over the fact that the SEC's complete and utter ineptitude forced them to do a job at all.

Maybe not 230 years, but still a long, long time.

-- Written by Gregg Greenberg in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
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