So Where Is The SEC Now?

While hindsight is 20/20, we all knew that the SEC’s victory over SunTrust in 1998 was not a good sign for the industry, even then.  Recall the SEC held up STI’s deal to acquire Crestar Financial due to, in essence, excessive loan loss reserves.  In the end, STI acquiesced to reduce its loan loss reserves significantly and restate earnings for 1994 through 1996.  Several other institutions followed suit.

As I look into the future at the state of the financial services industry, and ponder whether Citigroup is a confident investment at 107% of book value and 174% of tangible book or whether Wells Fargo will indeed be an underperformer at 184% of book value and 250% of tangible book, I ask myself why?  Why are there still so much broad based uncertainty and lack of confidence in these companies and in these management teams?

I believe a primary factor is the lack of …