THE STOCK MARKET POSSE

When cops gather at a press conference to announce the arrest of Wall Street crooks, the swarm of officials on the podium is enough to violate the fire code. In the 1980s, then U.S. Attorney (and now New York City mayor) Rudolph Giuliani would lead an entourage befitting a heavyweight boxing champ.

Sharing is nice. But sometimes it’s a lesson best left for two-year-olds. And applied to policing the stock market, it clouds the issue of who deserves more authority on the next go-round. So it was with the recent arrest of 46 illegal stock promoters in New York. The FBI, U.S. Attorney, Securities and Exchange Commission and National Association of Securities Dealers collaborated to knock out a ring of hustlers who use high-pressure sales tactics to dump inflated stocks on unwary investors. Who was in charge? “That’s a hot potato,” an official confides.

It’s a problem too because these crimes are fast becoming the most egregious on Wall Street. The hot stock market is attracting con artists like ants to a picnic. In the bull market of the 1980s, big-shot investment bankers swapped secret merger information for suitcases stuffed with cash. Giuliani sent a couple of bankers to jail in his day. But many others walked. The result? Stocks still routinely shoot higher ahead of big merger news–a sure sign that the insider-trading problem is anything but licked.

Today, with a record number of new stocks–and new investors–in the market, an infestation of voracious no-name brokers is taking kickbacks for touting “companies” that are run out of mail drops and that lack such details as products or services. Various government agencies are setting their sights on operators who manipulate these stocks, often so-called penny stocks trading at less than $5 or even $1 a share. It’s the right target. If you haven’t been called by one of these parasites, don’t worry. They’ll get to you. “I just left a research meeting and our firm has found a once-in-a-lifetime opportunity,” it begins. Never mind that there is no research staff. The only meeting this caller has been to lately is where they discuss how to lie without laughing.

The government clearly shook up such manipulators in its recent sting. But the fact is the feds aren’t set up to succeed time and again. The FBI and U.S. Attorney are great at undercover work and prosecuting fraud. But they don’t know common stock from livestock. The market is the SEC’s domain. But the SEC isn’t empowered to employ wiretaps or conduct stings. No single agency is fully equipped for the mission.

What makes this all so pressing is the high stakes. With baby boomers losing traditional pensions and questioning the health of Social Security, money has poured into the stock market. It’s not gamblers’ money but real people’s, and one day it’ll be needed to buy real things like cars and toasters and to keep the economy humming. A crisis in confidence stemming from rip-off artists in the markets could have far-reaching consequences. “The threat to the system now begins to escalate,” says sec enforcement chief William McLucas.

At least for now, stock manipulators are high on everyone’s hit list. It’s a fight worth fighting. If only someone were in charge.

Daniel Kadlec is TIME’s Wall Street and investing columnist. Readers can reach him online at kadlec@time.com