Let's have a ECN system run by the SEC “directly” for “all” publicly traded stocks, a fair system that...
I suspect that's statutorily impossible for the SEC. And frankly I don't think I'd want to see the government in charge of ALL trading in stocks. In addition, equities aren't the only market out there: there're bonds, currencies, commodities, and other derivatives.
that...
requires complete and accurate company reporting and accountability, with STRONG penalties for non-compliance (large fines and jail time?)
I absolutely agree with this. Among other things, I fail to see why the SEC STILL has not made it mandatory for every public company to make a/s and o/s continuously available through TAs. And frankly I don't see why the Canadian system couldn't be adopted: even the lowest level stocks there are required to make brief quartely filings.
Recently the SEC produced a list of "material events" for which 8-Ks should be released. Surprisingly, at least to me, an increase in a/s or o/s was not part of it. As a result, even with a reporting BB stock like, say, IVHO, you only find out how much new stock the CEO's dumped once every quarter.
the ECN system at all times
is based on Supply and Demand, that does not allow shorting of any kind, that requires verified ownership of a stock before you can sell/trade it, a "fairly" simple computer program based on a bid/ask price matched FIFO system would do such :) no middlemen, direct matching of buyer with seller only
Shorting will never be eliminated, and it shouldn't be. It keeps stocks from being hyped to unsustainable levels, and in doing so makes for more efficient and safer markets for everyone.
As to the rest, ECNs have been very successful trading issues in which there's a great deal of interest. They're also used by institutions. But if they were the ONLY way to trade, small and/or illiquid issues would die on the vine.
What's needed is more stringent listing and filing requirements, combined with harsher penalties for wrongdoers. Many of the fines levied by the SEC at this time are considered by the crooks to be simply the cost of doing business.
