Well, that certainly didn’t take long, now did it?

As noted here this past Sunday, R. Allen Stanford’s Stanford Financial Group has been well-known around Houston as a smoke-and-mirrors investment outfit for quite awhile. Joe Weisenthal over at Clusterstock has the best overview of Stanford’s collapse, while Felix Salmon does a good job of summarizing the SEC complaint and asking the right questions about the principals of the firm. The Chron’s Kristen Hays and Tom Fowler provide the local angle here.

Meanwhile, the Chronicle’s business columnist Loren Steffy bemoans the fact that government regulators — who have been investigating Stanford for at least the past four years — were again behind the knowledge curve in protecting investors from Stanford’s apparent investment fraud.

However, Steffy’s expectations are simply misplaced. A government regulatory body will rarely be as effective or efficient as the information marketplace in preventing or mitigating investment fraud loss. Had the investors in Stanford relied on Houston’s information market in deciding on whether to invest in the company, they wouldn’t have needed the "protection" of government regulation.