However Congress and the SEC may come out on the trade-off between corporate regulation and the expense of that regulation, this hearing makes plain that Congress and the regulators are focused on substantive issues such as capital formation and corporate disclosure (and not on questions such as conflict minerals disclosure, as if the SEC had the means to end civil conflicts in Africa). As a result, now that they are focusing on real questions, it seems possible for Congress and…

The different positions taken by the two Commissioners demonstrate how difficult it can be to prove a negative; in this case, that the trader had not relied on inside information. Commissioner Stein asserts in her dissent that the trader executed an overnight trade six out of eight specific times that the analyst changed his ratings, which Commissioner Stein describes as "uncanny" compared to the trader's ordinary activities. Conversely, in finding fault with the expert testimony presented…

Commissioner Stein's remarks point out a core conundrum. "More" regulation may have some benefits, but as the cost of those benefits increases, more issuers and investors determine that the costs of regulation outweigh those benefits. Regulators must confront honestly the trade-offs between the regulatory burdens that they impose and the number of issuers that will elect to operate under those burdens. Finding the right trade-off point is difficult, but before the search can…

Confirmation requirements are discussed in good detail in the of the Broker-Dealer Guide. Firms should very carefully test their confirmation disclosure under the new requirements because the required technology is not trivial and will require constant checking to determine that purchases and sales are being properly matched.