It’s no secret that the Securities and Exchange Commission is terrifically understaffed and wildly underfunded compared with the populous and wealthy Wall Street world it is supposed to police. But a report by the Government Accountability Office to be released Monday indicates that in its battles against insider trading and market manipulation, the commission declines to use one of the sharpest tools in its arsenal: the internal audits conducted by the nation’s stock and options exchanges.
Moreover, S.E.C. investigators’ efforts to track questionable trading are hampered by a computer system that does not allow investigative referrals from the major exchanges to be searched easily and efficiently, the report said.
The new report on the S.E.C. focuses on its oversight of the various stock and options exchanges, known as self-regulatory organizations, investors’ first line of defense against market manipulation and insider trading.
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