A bit more than a week ago Akshat Tewery came to my Occupy group to discuss his chapter in the book we wrote called Occupy Finance [1].

Akshat is a member of Occupy the SEC [2] and came to talk to us about a short history of financial regulation, and how impressively well things worked in the middle of the last century, when Glass-Steagall was in effect and before it was gamed.

One thing he mentioned in his fascinating hour-long lecture was this lawsuit which I hadn’t heard about. Namely, Occupy the SEC sued the Federal Reserve, SEC, CFTC, OCC, FDIC and U.S. Treasury over not doing their jobs, specifically for the delay in finishing and implementing the Volcker Rule.

You see, Dodd-Frank is a law, and the Volcker Rule, which is supposed to be something like a modern Glass-Steagall act, is part of it. But the law just outlines the rules, and the regulators are supposed to actually turn that law into regulations which they then implement.

There was a deadline for that, and it has passed. So Occupy the SEC sued to make those guys get the job done.

And guess what? The judge found that they didn’t have standing to sue. I’m no lawyer but from what I can understand this means they were deemed not sufficiently relevant to the implementation of Dodd-Frank. They didn’t have enough skin in the game, in other words. Because they’re just, you know, citizens who care about having a functional regulatory environment. Not to mention taxpayers who have bailed out the banks and want to avoid continuing doing that.

That begs the question, who has skin in the regulation game? Answer: banks being regulated. So only those guys can complain to the courts about the regulation. And obviously their complaints will be different from Occupy the SEC’s complaints.

It seems like whenever I look around I see examples like this, where there are people getting away with crappy policies or even crappier deeds because it has a negative effect, but that negative effect is so dispersed that most people don’t have enough “standing” to sue or to even effectively quantify how they’ve been affected.

And I guess this is the land of class-action lawsuits, but that doesn’t seem sufficient. It really seems like there needs to be legal representation for taxpayers somehow. Who is looking out for the average non-insider? Who is keeping tabs on overall systemic risk? In an ideal world that would exist inside the regulators themselves, but we all know it’s not that ideal.

1. We’re out of copies, but if you don’t have a copy of Occupy Finance but you want one, go to our IndieGogo campaign and donate $10 and you’ll get a copy of the book as a thank you.

2. Which, if you don’t know, consists of an amazing and wonky group of occupiers who write public commenting letters on financial regulation. Their Volcker Rule comments have made quite an impression on regulators, but they’ve also written numerous amicus briefs on various issues as well. Keep an eye on their work on their webpage.