For those interested in the back office operations of broker-dealers (or even those who are looking for a great summer beach read), the report's description of the behind-the-scenes doings around GameStop is a page turner.

The report finds fault and recommends more legislation and regulation. This is not a surprise. The more is better approach is not an unexpected response, though it should be looked at critically. To take one example, the report chastises…

Recently, the SEC to expand the definition of "dealer" in securities. One of the primary if not the primary justifications that the SEC gave for this expansion of the registration requirement was that it would allow Treasury to collect more information as to transactions in government securities. In that proposal, the SEC indicated that Treasury would be unable to collect desired information without the expanded dealer-registration requirement. The Treasury RFI makes no mention at…

Commissioner Peirce is saying what many of us are thinking. 

There is simply no way that the onslaught of new rules being proposed by the SEC can be reasonably vetted by market participants, that a serious cost-benefit analysis can be conducted or that reasonable consideration can be given as to whether the rules are within the SEC's statutory authority. Any SEC Chair under the next administration will have to give consideration as to whether it makes sense to simply rewind…

Should the SEC adopt this proposal, it will be challenged in court. Arguments would likely focus on (i) the SEC's authority to adopt disclosure requirements that may not be material as a matter of the economics of the investment and (ii) the quality of the SEC's cost-benefit analysis. (See ).

Even assuming that the SEC should win (and it is not obvious that the SEC would win on either of these issues), the implementation of the rule would be left to the next…