SEC Not a Captured Regulatory Agency, but Rather a Criminal Organization ………………Anyone Surprised?
~from kagemusha 110~
(Thanks to Flikr.com)
Well, I am not even in the least surprised. And Once again Matt Taibbi does some incredible work getting this reported. The Senate Judiciary hearings were held in early July, with the point taken by Senator Chuck Grassley of Iowa and his staff. Now I’m not a financial wonk, but I do pay fairly close attention, and I haven’t heard a whisper anywhere. In the year 2011 one of the few places we are able to learn the extent to which the plutocracy has corrupted our government and its agencies, is in Rolling Stone Magazine. That pretty much says it all…. just…. right…. there.
In a nutshell an SEC attorney has come forward under the whistleblower laws, and disclosed that the SEC has been destroying documents, near as anyone can tell, illegally, since 1993. When you are a Federal agency with police powers that means that you have been destroying evidence. Evidence in 18,000 cases.
It is also astonishing how frequently SEC executives land very cushy Wall Street jobs. But what is beyond belief is the blatantly sordid criminal activity brought to light, once again, by Mr. Taibbi. Like the SEC Enforcement Director who accepts a job with a TBTF casino 10 days after a major fraud investigation is dropped with no explanation what so ever, and the evidence has all disappeared as well.
Anyone remember the fraud investigator’s congressional testimony, the one who gift wrapped the Bernie Madoff case and handed it to the SEC as early as 2000? Turns out they are not stupid or incompetent at all. Just crooked. All those documents have been destroyed as well. Thought I’d give you a chance to look at part of that testimony again.
Here is Matt telling us about this mess from the first page of his article :
That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation’s worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – “18,000 … including Madoff,” as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.
Under a deal the SEC worked out with the National Archives and Records Administration, all of the agency’s records – “including case files relating to preliminary investigations” – are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term “Orwellian,” devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation. Amazingly, the wholesale destruction of the cases – known as MUIs, or “Matters Under Inquiry” – was not something done on the sly, in secret. The enforcement division of the SEC even spelled out the procedure in writing, on the commission’s internal website. “After you have closed a MUI that has not become an investigation,” the site advised staffers, “you should dispose of any documents obtained in connection with the MUI.”
Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.
The widespread destruction of records was brought to the attention of Congress in July, when an SEC attorney named Darcy Flynn decided to blow the whistle. According to Flynn, who was responsible for helping to manage the commission’s records, the SEC has been destroying records of preliminary investigations since at least 1993. After he alerted NARA to the problem, Flynn reports, senior staff at the SEC scrambled to hide the commission’s improprieties.
If you haven’t already decided to I highly recommend you follow the link in the first graph above, and read all 5 pages of Matt’s article. It’s kinda stuff you need to know.
Anybody really think that Iowa Senator Chuck Grassley the ranking Republican on the Senate Judiciary Committee is going to start prosecuting and then imprisoning SEC executives or investment bankers, or various other sundry Wall Street slime as quickly as he can line them up? Anybody?