Not surprisingly for a conference hosted by a regulatory consulting firm, the Securities and Exchange Commission came in for some pointed criticism Tuesday at MarketCounsel’s annual conference in Las Vegas.
 
“The SEC is a joke,” said Mark Cuban, the Dallas Mavericks owner and technology entrepreneur who was cleared in an SEC insider trading case last year by a Texas jury. The SEC brought the case against Cuban in November 2008.
            
Cuban faced off with former SEC chairman Christopher Cox, who headed the agency when it charged Cuban, in a discussion about how to fix the SEC.

But the anticipated fireworks never materialized, with Cox empathizing with Cuban’s plight and criticizing the SEC for focusing too much on enforcement.

The SEC’s enforcement division is “measured by only two metrics, the number of cases filed and the monetary penalties,” Cox said. “And bigger is better.”
            
Enforcement personnel and examination staff make up more than half of SEC employees, Cox said, reading from notes detailing the SEC’s headcount numbers. “This screams out that we need to reallocate these resources.”
            
“When I joined the NBA, I used to say it stands for ‘nothing but lawyers,’” Cuban said. “It’s the same thing at the SEC.”

Cuban told MarketCounsel attendees that the SEC ignored potentially exculpatory evidence and came after him anyway.
            
The billionaire eccentric, who addressed the MarketCounsel audience in jeans and sneakers, has become so obsessed with SEC abuses that he now makes a habit of studying transcripts of SEC trials.

“It’s amazing to see the judges admonishing the SEC lawyers [for] making shit up,” he said.

Cox said the SEC needs a chief operating officer with more power over the SEC’s divisions. “You need a permanent person there responsible for making all the divisions work together,” he said.

The SEC’s current COO has authority for technology, human resources and internal finances. “Telling the divisions what to do is not part of the job,” Cox said.

The commission also needs to exert more oversight over enforcement cases, he said.

Cuban found another ally in Eliot Spitzer, the crusading former New York Governor and attorney general.

“Cuban was exactly right—what were [SEC enforcers] doing with that case?” Spitzer said in a separate presentation at the conference.   

Both the Department of Justice and the SEC are “failed organizations [that] don’t have the guts to bring [important] cases that need to be made,” Spitzer said.

Spitzer, Cox and Cuban are just some of the luminaries at the MarketCounsel event.

Motivational guru Anthony Robbins kicked off the conference Monday night with a three-hour, amped-up session that had the 500 or so RIA owners on their feet exhorting themselves to greatness, although more than a few ditched early when Robbins intruded into the scheduled cocktail hour.

“I think [Robbins] did a remarkably good job for a tough audience,” said David Bach, vice chairman at Edelman Financial Services, whom Robbins interviewed for his recent book.

“We’re both big believers in financial education, so I think he has an important message for a mass audience,” Bach said.