The Race To The Bottom responsibly discusses (here, here, here, and here) Colorado's proposed Corporate Fraud Initiative or Amendment 53.
A vote of NO suggested by Daily Kos? How very laissez-faire of him. Even Adam Smith did not wear an Adam Smith necktie.
Truth be told, while Amendment 53 may not be a viable answer for Coloradans, such thinking is a step in the right direction. It is arguable that we wouldn't need an SEC if states would simply pass and enforce their corporate criminal laws. One problem is that state criminal law attorneys usually lack the specialized corporate and business law knowledge and background necessary to prosecute these crimes.
What is needed, is something along the lines of the federal government to create a special task force of corporate law attorneys in every state to prosecute for corporate malfeasance. Civil lawsuits and fines are not deterrents anymore as officers, directors, and executives protect their personal assets simply by purchasing D&O insurance. Jail time, it seems, is the only deterrent for the unscrupulous who have no problem negatively affecting entire markets [as is the case today].
If we were somehow able to limit the standing of shareholder derivative civil suits following criminal indictment ONLY [criminal proceedings perhaps done in a procedural manner similar to something like the Guantanamo Commissions: criminal commission with an expert panel (in lieu of an uneducated factfinder) reviewable by a judiciary] and effect this at the state level in EVERY state [to prevent against the race to the bottom phenomenon-hence the need to for such an initiative to come from the federal level], we might actually have something that could protect Joe-Investor while maintaining a classical liberal identity.
Of course, this is all just ideating "out loud". :)
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