|Written by GSCR Staff|
|Friday, 13 September 2013 13:28|
The headline is one of the clichés related to big college football recruiting and booster support. The implication being that if you run a squeaky clean program, you do not have a chance to be competitive as everyone else is doing it anyway.
This rationalization to permit cheating in NCAA football seems to have suddenly created an epidemic with the barrage of scandals recently. The season started with the Johnny “Football” Manziel autograph scandal, where reportedly received tens of thousands of dollars to sign autographs. The NCAA could not prove he did anything, so he only got a half game suspension. This week Sports Illustrated published a five part article on Oklahoma State, where wrongdoing covers the gamut from paying players, academic fraud, to sex from hostesses for enticing recruits. And then the bombshell yesterday that 5 recent players from SEC schools alleging they received money from agents, including an offensive lineman currently in the NFL that was part of the Alabama Crimson Tide’s national championship teams from 2011 to 2012. Clearly it seems like this stuff is on the rise with recent scandals at big time schools like USC, Miami, and Ohio State also.
How does this relate to the market? To the retail investor it may seem like insider trading is the norm and that it is getting worse. Just yesterday, SEC officials met with NASDAQ and NYSE officials to discuss the ‘integrity of the markets’ after last weeks’ technical ‘glitch’ that halted trading for several hours that many are blaming on ‘inside’ high frequency traders. There have been several recent cases that also make it seem like this phenomenon is on the rise from Raj Rajaratnam to charges brought against Steve Cohen of SAC earlier this year.
The truth is more likely that this stuff has always been going on, except now it is harder to hide and 24-hour news channels need stories.
For many the solution to these problems is to just eliminate the rules. Just paying the players because the NCAA and the universities make millions from them in the college football case, or just eliminating laws against insider trading because the advent of the internet and the numerous sites that track trading this makes it ‘impossible’ in the case of the market. This logic is flawed. While there is a fine line between what is morally questionable and outright wrong this so called ‘free for all’ will only make matters worse. The idea behind these rules is to create an environment so that more people can compete. Tearing down the rules would only make the rich richer. Will the laws and rules prevent all future cheating, no way? But the deterrent is necessary.
What is the point here? Wall Street and big time college football both have ultra competitive people that will bend the rules to the maximum, and sometimes break them to try and gain an edge. This may sound naïve, but the good apples far outnumber the bad ones in both industries and the greater good these institutions serve is worth the cost of keeping them in tact with very little modifications if any. There has to be absolute rules even though there is a lot of gray in both areas. Protecting the integrity of the market or a game is paramount for the public good. Whether or not the continuing scandals will damage attendance and TV viewership in college football’s case or inflow of capital in Wall Street’s case remains to be seen.
OK, off the soap box we go.
Have a great weekend and enjoy some college football anyway!
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