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To: microhoogle! who wrote (21695)	1/18/2005 6:33:30 PM
From: GraceZ	Respond to of 116555

You are right, SEC probably does not care about channel stuffing until the wrong doing has been detected. How is wrong doing detected? If a company stuffs the channel and demand rises to meet or exceed that inventory is the company innocent because the action is profitable? If the retail demand falls far short of normal inventory levels, is the company guilt of channel stuffing? Suppose you forecast increased demand that fails to materialize, is that channel stuffing and a crime? You can't make someone guilty of a crime depending whether or not their actions are profitable or not. This equivalent to punishing people for management decisions. The market punishes management decisions without creating laws against actions which are impossible to judge except after the fact. The SEC has no business intruding itself in this area. Even if it is detected, I think the best that will happen is an "informal inquiry" That is hardly the "best" that would happen. Informal inquiries by the SEC are far from benign. All of these various intrusions by the SEC into business practices have a chilling effect on business and are largely an illegal expansion of their power.