Summary
The first question that comes to mind is “What are they tiring to hide and why”? Under ordinary circumstances when two or more parties are conducting any type of financial transaction for as little as one cent up to Billions of Dollars, Yen, Euro’s or any other currency, transparency is provided through various documents. But, in the financial industry non disclosure is the standard operation procedure.
Analysis
Why is all of the secrecy needed by the parties involved in the securities and commodity market? What do these individuals have to hide? Is the money real or just worthless paper? Has the money been obtained illegally? What is the source; foreign governments that support elicit activities or harmful actives? Would transparency provide all of the information? Not necessarily because they could achieve most of the same results by deception through perception!
Having transparency does not preclude the practice of deception through perception. The difference being transparency provides a road map, complex as it might be, to the source of the transgression. What is the difference between an individual or group of people planting an envelope or bag with a limited amount of money exposed on the sidewalk waiting for a second party pick it up, evade the truth regarding the amount, convinces the second party to withdraw half or less of the proclaimed amount from their account and give their word they will get the full envelope or bag of money? And, a first party in the securities and commodity market convincing a second party to give their firm money for the fabulous investment they found? The only difference is the con artist committed a crime and the other receives a yearend bonus.
Transparency is necessary and should be required through regulations or statutes to mandate transparency in the transaction including the risks involved to achieve the rewards along with the fees charged by all parties and the benefits for promoting the transaction. In all other financial transactions from purchasing groceries to depositing money in a bank account there are regulations and statutes requiring high level of transparency. Why not in the securities and commodities markets?
A good question to ask is “What happened to all of the journalists, Congressmen and the Senators that wanted to convict the Executive Branch along with the heads of the intelligent agencies plus hundreds of other associates for not providing transparency about the reasons for going into Iraq”?? Where are they now and when we needed them to disclose the events as they were happening?
There also is the matter of accountability and responsibility for the results of the transaction. Under the current regulations and statures, the perpetrators are rewarded for their actions and the investors are fleeced of their money. Everyone that partakes in the securities and commodities market regardless of their stature in life has to be held accountable for the actions. If an investor allows short or long term ROI rather than due diligence to control their decision process their recourse for recovery should be limited or nonexistent. On the same token, any securities or commodities that are processed through the financial market must contain transparency or suffer the same risks that any other industry executives and workers face. Why should their exposure only be limited to rewarding their actions?
Would have transparency prevented the financial collapse from happening? Maybe not, but it would have provided a whole different perspective of the transgressions as they were occurring, not in retrospect as have to look at them now. Transparency will make it more difficult for history from repeating itself or another new set of transgressions from commencing.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
