Here's an interesting thing. I was reading through the monthly "disciplinary and regulatory summary reports" from the Institute of Chartered Accountants in England and Wales, of which I am a Fellow. I love reading that stuff; it's a list of all the jolly bad fellows and other members and the punishments they receive for breaking the Institute's rules.

You'd be surprised how many bad fellows there are: about 20 a month. They lie, they cheat, they sign documents they shouldn't — and in the occasional case, they declare bankruptcy.

You may recall that the laws in Bermuda have been changed recently to allow bankrupt lawyers to continue to be lawyers. That's nice. The summary reports point out, however, that I and my fellow Fellows are held to a higher standard. The Institute's bye-laws state that a member shall be excluded from membership upon a bankruptcy order being made against him or her.

I suppose you can argue that an accountant should be better at handling his money than a lawyer, but in either case, wouldn't you want your professional to be not a bankrupt? Just saying.

* * *

Last week's column on regulation produced three responses from readers. One wrote: "You are correct re regulations. One of the first things I learnt in law school was that nothing could stop a determined thief." I don't know if the writer of that e-mail was bankrupt or not.

It's nice to be correct, but the balance of this column is given over to two other readers, who took the line in their e-mails that I could not have been more wrong when I suggested that Bermuda has meaningful regulation. In the interests of balance, both letters are reproduced below, and I should tell you that both are from people who have spent their lives in the orbit of Bermuda's international business sector, one way or another. (Although I normally present all correspondence exactly as sent, I have had to redact some elements of both letters, in that I would otherwise be sued to death by lawyers for those mentioned in the e-mails as villains who have not been proven so in a court of law.) The first reader wrote: "I am afraid you missed the point entirely! There has been no effective regulation here or anywhere! You can put as many regulations on the books as you wish but the regulators have to actually do their job.

"The Bermuda Monetary Authority proudly states that it does not have the role of 'investigator', so when you see all these scandals in the paper, don't expect the BMA to do anything. The police don't have any resources and the (role of the) new Financial Intelligence Agency is just to analyse complaints and gather intelligence, not investigation.

"You are a little behind the times. Mr. Spitzer exposed US regulators as useless some years ago now and they have been trying to play catch up.

"Lastly, the media in Bermuda has no investigative journalists. Also, if the journalist does not get an answer, then why does he/she not keep asking that same question at every subsequent news conference?

"We have (Company A, Company B and Company C) all clearly involved in criminal activity and yet they continue to exist. By the way, the next scandal will be (Company D) and its Bermuda subsidiaries. I am surprised at you, Roger."

The second e-mail ran as follows: "I read your piece in The Royal Gazette re regulation. The part that particularly caught my attention was: 'It could be because, far from the days when Bermuda regulation was considered "firm but fair", it is now one of the most highly regulated industrial sectors on the planet.'

"You might want to ask the BMA to name a single company or individual that it has ever penalised by way of fine or other punishment in its entire history. The true answer appears to be none.

"Incredibly, although many licensed Bermuda entities have committed serious financial crimes over the years (e.g. Company E, approximately $1 billion insurance fraud; Company F, $1 billion money laundering for Individual A; Company G, $65 million fraud; Company H, Company A, Company I, Company J, etc.), the Bermuda regulators have not only not brought any actions against the perpetrators, there is no evidence that they have even investigated them. The Bermuda regulatory way seems to be to stick one's head in the biggest pile of sand while simultaneously trotting out inane press releases about how well regulated the island is.

"On the contrary, while not perfect, hardly a day goes by without the SEC bringing an action against perpetrators of crimes and routinely freezes and seizes their assets and makes the public aware of who the bad guys are. See http://www.sec.gov/litigation/litreleases.shtml.

"In the offshore world, the British Virgin Islands is a much better regulated jurisdiction than Bermuda, having successfully criminally prosecuted several civil servants, including the Financial Secretary, for corruption, and IPOC, a Bermuda-domiciled sham mutual fund, for money laundering, and closing down an insurance company (Boston Life & Annuity), all within the past few years.

"There was a story recently in The Royal Gazette about Bermuda signing a Mutual Legal Assistance Treaty agreement with the USA, with (Finance Minister) Paula Cox lauding it as further sign of Bermuda's commitment to stamp out financial crime. However, what was not mentioned in the story was that offshore jurisdictions like Anguilla, the Bahamas, Cayman, the BVI, Turks & Caicos Islands, etc. have had MLAT agreements in place for nearly 20 years, as you can see at http://travel.state.gov/law/info/judicial/judicial_690.html."

Well, you pays your money and you takes your choice. I personally feel that, while Bermuda may not always have been state-of-the-art in its regulation, it has improved in this area and does not earn the respect it deserves.

Other countries, such as the US, point the finger while their own behaviour is entirely out of control (see the sub-prime crisis, the banking crisis, the liquidity crisis, the recession, Madoff, etc.).

Speaking of Mr. Madoff, I was going to run a Ponzi scheme myself. The plan was to defraud anyone I could find called Ponzi, but it would have been more expensive to operate than any rewards I might have earned. Defrauding myself didn't sound like much fun, so I never carried it out. Lucky, really. I would have been excluded from membership if they'd caught me.

Happy New Year.