Sorry, Senator Schumer, but Wall Street should not directly fund the SEC

If Senator Charles Schumer (D-NY) has his way, the Securities and Exchange Commission (SEC) will get its funding from Wall Street. It's not really that big of a switch from the current source of the SEC's budget -- fees paid to the Treasury Department by companies that issue stock. The Treasury then figures out how much of that money should go to the SEC. But I think that Schumer's idea is absolutely terrible.

Before getting into why I disagree with his idea, it's worth noting that the SEC does a really bad job of protecting investors. Its 3,650 person staff gets about $1 billion a year to oversee the public securities markets along with 35,000 registered public companies and investment funds. But as the recent report on how it missed the Bernie Madoff scandal reveals, the SEC is utterly unable to do its job in the face of sophisticated scammers.