SEC Expertise

"Two events occurred last week that seem unrelated. But, as often occurs in our interwoven world, connecting the dots is revealing. ... Linda ... Thomsen, the director of enforcement at the [SEC], offered her take on how the nation's top securities cop missed the ponzi scheme Bernard Madoff is said to have run for decades, noting how assiduously the SEC chases tips it receives. 'Without fear or favor,' she said. ... The two events are linked by this: Just as the SEC failed Mr. Madoff's investors as tipsters told the agency he might be up to no good, it also seems to have let down Allied's shareholders by ignoring analyses of aggressive accounting at the company. ... It wasn't until five years after critics began questioning Allied's books that the commission moved against the company. ... In a settlement, Allied neither admitted nor denied the allegations, not a nickel in fines or penalties was assessed. ... But given the crisis of confidence in our markets--in their participants and overseers--the story of how Allied quelled its critics and managed its regulator is intriguing. ... 'Fooling Some of the People' [by David Einhorn] should be required reading for Mary L. Schapiro, the new chairwoman of the SEC. Ditto for anyone else interested in assessing our nation's broken-down regulatory apparatus. ... H. David Kotz, the new inspector general of the SEC, already seems to have paged through Mr. Einhorn's book. Mr. Kotz's most recent report to Congress indicates that he is investigating the problems Mr. Einhorn encountered with the SEC, when he gave it information about Allied's aggressive accounting. ... On the call was Joan M. Sweeny, [Allied's] chief financial officer, who had worked in the enforcement division of the SEC. Joining her was William L. Walton, Allied's president, who complained--falsely, as it turned out--that Mr. Einhorn had not spoken with the company and was trying to 'scare people, make a quick buck and move on'. ... According to the book, the SEC did not respond to accounting analyses of Allied he sent the agency in 2002. Instead, early the next year, it began investigating him. ... The SEC inquiry into Mr. Einhorn went nowhere. Not long after his SEC visit, [Mark] Braswell left the agency. He joined a law firm, where he registered as a lobbyist for Allied in 2004. ... He said the SEC ethics office OK'd his lobbying for Allied", emphasis mine, Gretchen Morgenstern, 1 February 2009 at http://www.nytimes.com/2009/02/01/business/01gret.html?_r=1&ref=us&pagewanted=print.

SEC ethics office? Hahahahaha, the Mogambo Guru would say. "Without fear or favor", what? Braswell went to Venable on 25 September 2003. "Braswell also has first-hand experience investigating a wide range of SEC violations, including corporate financial fraud, insider trading, market manipulation and broker/dealer misconduct. Prior to joining the SEC, Braswell spent four years at a major national law firm, where his practice focused on complex commerical litgation. ... Braswell joins a very active corporate governance practice at Venable. Led by firm, chairman Benjamin R. Civilietti, former Attorney General of the United States. ... Venable has an interdisciplinary firm of attorneys from across its various practices to assist senior executives, boards of directors and audit committees in managing their risk, ensuring compliance and protecting company reputations. ... The firm has four former attorneys with SEC experience and more than a dozen former prosecutors and regulators, including former senior [US] Justice Department officials [AUSAs], former federal banking regulators, as well as former Assistant State's Attorneys and Public Defenders. ... 'Working at the Commission has been extremely rewarding and has made me understand why the US financial marketplace remains a model of transparency and liquidity, despite a series of headline abuses and scandals in the past several years', Braswell said. ... 'For the past nine years, Mark Braswell has been at the center of securities law enforcement,' said Geoffrey Garinther, who co-heads Venable's Corporate Governance and Investigations Group. ... 'At the SEC, Mark was known as a creative problem solver,' said Venable partner Nancy Grunberg", link: http://goliath.ecnext.com/coms2/gi_0199-3155356/SEC-Veteran-Mark-K-Braswell.html. The entire federal law enforcement apparatus seems to have been "Mary Jo Whiteized".