SEC Waivers

"Forget too big to fail. In the eyes of federal regulators, many Wall Street firms are too big to punish. ... Despite these findings, these financial giants got, sometimes repeatedly, special exemptions from the [SEC] that have saved them from a regulatory death penalty that could have decimated their lucrative mutual fund business. ... However, on Friday, the SEC said it has expanded its probe of Bank of America to include the bank's possible failure to disclose mounting losses at Merrill Lynch. ... While the companies were punished in other ways, they were spared from what some claimed would be 'severe and irreparable hardships.' In fact, the last time the SEC's staff could recall a waiver being turned down was 1978. The SEC, however, declined to comment in detail in its decisions. ... The Goverment Accountability Office, Congress' investigative arm, reported this year that SEC enforcement workers have felt overwhelmed by their caseloads and undermined by SEC leaders hesitant to levy heavy punishment. ... Securities experts think companies wouldn't apply for waivers if they didn't think their applications would be granted. At the same time, the fact that the SEC could someday deny one is a major weapon in its arsenal, experts said. ... In 2003, Citigroup settled a case after the SEC accused it of manipulating stock research. The settlement 'permanently restrained and enjoined' Citigroup from violating a specific section of federal securities laws. Then in 2006, Citigroup and other companies were cited for improperly marketing 'auction rate securities,' bonds issued by municipalities, student loan entities and corporations. The SEC censured Citigroup and fined it $1.5 million", Chris Adams at the Houston Chronicle, 14 December 2009, link: http://www.chron.com/disp/story.mpl/headline/biz/6768581.html.

$1.5 million for Citigroup and Craig Gile goes to prison, my 25 June 2008 post: http://skepticaltexascpa.blogspot.com/2008/06/citigroups-joe-jett.html. The SEC and SDNY US attorney's office are sick jokes. Some threat, that a waiver might be denied.