Tuesday, February 24, 2009

Whistle-Blowing Dixie

"And what have the SEC and the [DOJ] been doing to stop what appears to be a far bigger organized-crime wave than any blamed on the Mafia? Nothing. As in the 1930s, we need a thorough public investigation to indentify the criminals and send them to prison, and also to prevent this from happening again", David Kofsky letter to Barron's, 9 February 2009.

"Should Wall Street have spoken up? That is a key question to emerge from the Madoff scandal: whether Wall Streeters should more-readily report concerns about possible fraud to regulators", Aaron Lucchetti at the WSJ, 12 February 2009.

"A parliamentary committee examining the banking crisis claimed its first victim as the deputy chairman of the U.K.'s financial watchdog agency stepped down amid allegations he silenced the risk director at one of the U.K.'s troubled banks several years ago. ... Paul ... Moore claims his warnings that the bank was growing too rapidly went unheeded and resulted in his dismissal in 2005. Mr. Moore's allegations surfaced prominently on Tuesday during the first of two hearings before the Parliamentary Select Committee that is scrutinizing the banking crisis. My midday Wednesday, Sir. James--who has advised Prime Minster Gordon Brown on financial matters--had submitted his resignation after an onslaught of negative publicity. Following the resignation of Sir James, the FSA sent out a detailed statement saying that claims made by Mr. Moore in 2004, were 'taken seriously, and were properly and professionally investigated.' It said a review by KPMG concluded that HBOS acted appropriately", Sara Munoz at the WSJ, 12 February 2009.

"In recent years, the SEC has been seen as increasingly toothless, particularly under Christopher Cox, the Republican chairman who stepped down last month. ... Harvey Pitt [HP], former SEC chairman, called for structural changes, including to the 'fatally flawed' way companies were inspected", Joanna Chung at the FT, 13 February 2009.


Suppose they did? What would the SEC do anyway?

The same firm that audits Citigroup tells us HBOS "acted appropriately". Which means it paid KPMG a seven-figure fee for something. Does Sir James think he's Linda Thomsen, recently of our SEC?

Uh, oh. HP, the second worst SEC chairman in history in my opinion, wants "structural changes". Is this HP's call for better SEC "corporate governance"? What does HP, a shill for big business interests in my opinion really want? To delay, deny, continue to collect consulting fees and cover the SEC's arse. See my 10 and 16 August 2007 posts about HP: http://skepticaltexascpa.blogspot.com/2007/08/sec-erred-come-on-now.html.

1 comment:

Anonymous said...

It seems to me that the organization and focus of the SEC is premised on the dominance and proper actions of the largest financial firms in maintaining orderly markets...

But I could argue that their practices are infinitely more corrupt than Madoff's... they are more systemically corrupt and have perfected regulatory capture...

Mr. Pitt is a shill for these interests... so too Mr. Levitt...

You ask ..."Should Wall Street have spoken up?" ... IA... the mafia doesn't rat out to the authorities EVER! At some point when a mafioso gets dirty enough the others take him down... anyone remember Bear?

Madoff was a fly on an elephant's ass... and the elephant is the Fed Res/Wall Street herd... I think the SEC should head out on the plains and go elephant hunting... swatting flies makes good short term headlines... but the system is so corrupt... and it would be nice if the SEC really helped clean it out rather than enabling these big corrupt firms to control the system...