Should you invest in unregulated investment firms?

Where was the Commodity Futures Trading Commission when investors needed it?

The CFTC had recently done an audit on MF Global and found it in compliance. The CFTC also lets investment firms with a fiduciary obligation to their customer use their customer’s money in complex overnight transactions called repos.

Clearly, regulation does not work. Especially when the CFTC’s chairman is a former Goldman Sachs partner like his friend Corzine.

When crony capitalism exists, excessive regulation merely gives investors and customers a false sense of security. They would be better off looking for investment firms that are unregulated but have an unimpeachable reputation.