RE: SEC's 2004 CSE's - EU should and could sue US regulators

In summary and simply stated - in 2004 the EU backs off on regulating the European operations of US investment banks based upon the SEC's promise to oversee them here. But as you'll read below -the SEC does not regulate same - except on paper.

Based upon Mary Schapiro's testimony, Cspan TV link here
http://www.c-span.org/Watch/Media/2010/04/20/HP/A/31972/House+Finacial+Services+Cmte+Hearing+on+Lehman+Bros+Report.aspx

today in response to Barney Frank's (D-RI)questions - "...(in 2004) the SEC stepped up to the EU's requirement for CSE or SIBHC Supervised Investment Bank Holding Company. CSE is an acronym for what was deemed a "consolidated" "supervised" "entity" applicable "only to the largest most sophisticated players" a quote from SEC's 2004 55 minute debate in April 2004 (not a typo) see link here http://graphics8.nytimes.com/packages/audio/national/20081003_SEC_AUDIO/SEC_Open_Meeting_04282004.mp3in

at the end and from the beginning there was NO such consolidated or group wide supervision upon said entities PERFORMED by the SEC - appears a fraud upon the EU financial regulators - at least it seems to this writer.

Instead - the opposite seems to have occurred - ALARMINGLY - said regulation let Wall St investment banks / broker dealers to VOLUNTARILY comply (there was as Ms Schapiro stated today - no statutory authority for CSE / SIBHC - hence the voluntary compliance understanding wink and a nod) - used proprietary value at risk measures (VAR) to:

1. value their own assets to model not market and
2. determine their own required minimum net regulatory capital

but perhaps I'm construing the English language incorrectly?

In sum - Not only was there NO SEC supervision, these firms were allowed to use their own proprietary valuation models to value assets (the compensation and bonus base) and determine their OWN capital cushions; yet the EU was expecting something - I'll bet just a wee bit different.

Any questions, reactions, comments or corrections appreciated.