Money manager Leon Cooperman has a piece up at CNBC reflecting on his encounter with the Securities and Exchange Commission:
Given the vast resources of the federal government and the prospect of potentially ruinous legal costs and collateral damage that confront any defendant, it is little wonder that so many opt to throw in the towel and settle, rather than risk the vagaries and expense of extended litigation. In the end, the regulators, taxpayer-funded and shielded for the most part by sovereign immunity, not meaningfully accountable to anyone but themselves, pay no price for overreaching – a classic case of moral hazard.
As a partial remedy, he suggests: "that when the government sues an individual or firm and loses in court or before a regulatory tribunal, the government reimburse its target's legal expenses to the extent not covered by insurance (just as we, as taxpayers, already foot the government's bills)."
