NEW YORK -- A crowd of some 60 people were milling outside the Federal Reserve Bank of New York in the Financial District Monday afternoon. They listened to Alexis Goldstein, a small woman with a voice that bounced off the buildings.
"We are here today to send a message to the Fed, to the SEC," Goldstein announced, the crowd echoing her words in a call-and-response pattern made familiar by the Occupy Wall Street movement. "Protect the public, not the banks."
"Yes to Volcker, not the vultures!" someone called back.
They were part of one of the latest and most sophisticated attempts yet by OWS protesters to influence the political dialogue. Goldstein is one of the core members of a group known as Occupy the SEC, a collective that includes lawyers and people with years of financial industry experience -- such as Goldstein herself, who has worked in technology at a number of Wall Street firms. The group, which takes its name from the U.S. Securities and Exchange Commission, had organized this rally in lower Manhattan to focus attention on a key piece of financial regulation.
"Volcker," as shouted out by someone in the crowd, referred not to Paul Volcker, former chairman of the Federal Reserve, but rather the edict named after the man -- the so-called Volcker rule, a yet-to-be-finalized section of the 2010 Dodd-Frank financial reform package that aims to stop banks from making risky trades with their own money, otherwise known as proprietary trading.
The rule -- which began life as a relatively simple 10-page document and has since grown to nearly 30 times that length -- has attracted controversy from financial professionals as well as ordinary citizens. Monday marked the end of the public comment period for the Volcker rule -- a months-long interval for concerned persons to write in and express their approval or disapproval of the text.
And the vultures? Those would be some of the people writing in, the industry representatives who have been filling the inbox of the SEC with complaints about how the Volcker rule hamstrings banks.
Goldstein and the other members of Occupy the SEC have little patience for this line of reasoning. On Monday, the group submitted a 325-page letter of its own, the end product of months of line-by-line scrutiny of the Volcker rule. The letter argues that, if anything, the proposed rule runs the risk of not going far enough -- that it contains too many ambiguities and too few deterrents for high-risk behavior.
The group's letter, as carefully annotated and footnoted as any document from MetLife or Citigroup, calls upon regulators to enforce a strong version of the Volcker rule, one that seeks to protect consumers rather than appease financial giants. Whether consciously or not, it echoes the comment letter from Paul Volcker himself, also submitted Monday, which urged regulators not to bow to banking-industry pressure.
"There's a huge incentive from the banks to ensure that they can continue doing the things that they have been doing," Akshat Tewary, an attorney and member of Occupy the SEC, told The Huffington Post. "But that doesn't mean that it's the best thing for the country."
Among the Occupy group's reservations, said Goldstein, is that the Volcker rule's crackdown on proprietary trading doesn't cover what are known as repos, or repurchase agreements. In a repo arrangement, a bank temporarily sells a bond or other asset in order to get some quick liquid capital, then buys it back at a higher price later.
The Volcker rule seems to leave room for proprietary trading to take place under the category of repurchase agreements, which Occupy the SEC calls a troubling loophole.
"One of the reasons Lehman [Brothers] fell apart as fast as they did was because they were reliant on repo," Goldstein told The Huffington Post.
The group also takes issue with the gray area of how market makers -- people or institutions that buy and sell assets -- can anticipate what traders will want to buy and sell in the near future.
The language of the Volcker rule seems to leave the door open to abuse in this area, members of the group say. A market maker could use ill-gotten inside information to make lucrative trades, and then simply claim that he was good at predicting what his clients would want. As the comment letter notes, "[s]uch a claim would be practically impossible to confirm."
One of the most frequently heard complaints from banks commenting on the Volcker rule has been that it will restrict liquidity in the markets, thus choking off the transactions that put money in the hands of investors and businesses.
Members of Occupy the SEC were quick to dismiss this idea.
"I think there are a huge number of market participants that are going to jump in and take this opportunity" to provide liquidity, Goldstein told HuffPost. "I think to suggest otherwise is kind of disingenuous, and flies in the face of free-market capitalism."
Monday's march, which kicked off in the late afternoon, took the group from Zuccotti Park -- for two months this past fall the epicenter of Occupy activity in New York City -- to the office of the New York Fed, and then west to the World Financial Center, home of the New York office of the SEC.
It was a route and a time of day calculated to intersect with the maximum number of rush-hour commuters. As the group streamed past office workers headed to the PATH train, chanting and waving placards, it wasn't clear whether they were winning many over to their cause.
But at least a few people seemed to welcome the procession. One passerby, upon seeing the demonstrators, exclaimed, "Is this more Occupy Wall Street? Oh, it's back!"
Afterward, the Occupy the SEC brain trust gathered at a pizza restaurant and agreed that the march had gone well.
"We covered a lot, we have tons of citations," Goldstein said. "If they are going to ignore us, that's really going to be a strong signal that things are really, really wrong."
The group members said that Occupy the SEC would likely have a life beyond Monday's activities. There are a few other sections of Dodd-Frank that are or will be open for public comment, and the members said they have also discussed the possibility of offering financial education tutorials to people who don't have a background in economics.
Some members of the group expressed surprise that so many people turned out for a protest centered around a dense piece of banking legislation. But Aaron Bornstein, a neuroscientist who is active in the Occupy movement, told The Huffington Post that he believes financial regulation now resonates with the common man more than ever.
"I have this sign that says 'Bring Back The Glass-Steagall Act,'" said Bornstein, referring to the law that separated commercial and investment banking until its repeal in 1999. Often, he said, when he's walking around holding the sign -- not just in Zuccotti Park, but on the subway or in other parts of the city -- people come up to him to express their approval.
"Can you imagine that happening five months ago?" Bornstein said. "All of a sudden, people care."