The $3 million chandeliers. That’s my most vivid memory from a conference I attended last year hosted by the Securities Industry and Financial Markets Association. The annual event, which draws the biggest names in the securities bar, was held last March at the Fontainebleau Miami Beach resort. The sprawling hotel—which in its heyday had been a fabled hangout for Frank Sinatra and Dean Martin—had recently been remodeled for an estimated $1 billion. It was over-the-top lavish, with an elaborate “poolscape” dotted with cabanas. And those chandeliers! I have it on good authority from the hotel’s bartender that the three glass creations that hovered over the lobby cost $1 million each.
Amid this opulence I watched thousand-dollar-an-hour lawyers for banks and financial institutions rub elbows with Securities and Exchange Commission chairman Mary Shapiro and enforcement director Robert Khuzami, both of whom had been invited to speak. I recall one big-firm lawyer bragging to me that he had told an SEC lawyer in attendance to back off from implementing certain rules that would hurt his clients. I don’t know how Shapiro or Khuzami felt about casually mixing with these lawyers at a modern-day Versailles on the beach; I couldn’t get an interview with either. But the presumed coziness of the relationship between regulators and the regulated left me feeling that something wasn’t quite right.
