Even playing field?

If you read as much financial "stuff" as we do here at SMI, you quickly learn that writers in certain quarters are convinced the financial markets are rigged. Either the government is running the show, or some group of elites, or well, somebody is clearly up to something. While occasionally some good points are raised, the argument tends to get tired (and generally speaking, as a result, we don't continue to do much reading from those conspiracy-minded sources).

While it's hard for me to believe the whole system is rigged, I don't doubt for a minute there are isolated cases of misconduct. There's simply too much money involved, and greed too hardwired into the human DNA, for there not to be. This is an area where government has a perfectly legitimate and appropriate role to play as regulator and enforcer of the laws on the books.

The question is, are they fulfilling that role? Evidence like this suggests they are not. Huge purchases of index futures in advance of the public release of government information (that is likely to move markets) needs to be met with a swift and brutal slap from the enforcement arm that oversees these types of securities transactions. Hopefully that action is coming.

It's crucial that the players in the system be held to account when they break the rules. When individuals feel like the game is unfairly stacked against them, the whole system crumbles.

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Mark Biller is Sound Mind Investing's Executive Editor. Visit www.soundmindinvesting.com to learn more.