Maybe it’s a glass-half-full idea, but I like it:

The Ultimate Truth About Preventing Market Abuse – It Can’t Be Done

Bottom line (according to Dave Forest) – no matter how much regulation and enforcement we try and pile on the markets, people are going to game it. And lie. And cheat.

This doesn’t mean we shouldn’t do it. But we need to understand we’re going to hit the law of diminishing returns on this. The Bernie Madoffs of the world will slip through from time to time.

But Forest has another idea:

Here’s a revolutionary idea. Why don’t we instead just invest our money with honest people?

We increasingly leave the matter of honesty up to regulators. Hoping that rules will force all companies to behave in an appropriate way (at least some minimum standard of appropriateness).

A much more effective approach is for investors to take it upon themselves to analyze the honesty of the management teams they’re buying into.

That’s a much more challenging proposition. But I like it.