Thursday, April 22, 2010
Improper Influence at the SEC?
"The [SEC] has known since 1997 that R. Allan Stanford likely was operating a Ponzi scheme but waited 12 years to bring charges against the billionaire, the agency inspector general said Friday. ... The SEC didn't bring charges against Stanford until February 2009, when it alleged a $7 billion fraud. ... Complex cases like Stanford's that couldn't be quickly resolved were discouraged by enforcement higher-ups, the report said. [David] Kotz's report said his office's examination didn't find that the reluctance of the SEC's Fort Worth enforcement attorneys to investigate Stanford was tied to 'any improper professional, social or financial relationship on the part of any former or current SEC employee.' ... Senior agency officials in the Fort Worth office believed they were being judged on the number of cases they brought and told their enforcement staff that novel or complex cases--as opposed to 'quick-hit' cases--were discouraged, the IG's inquiry found. ... Kotz's investigation also found that a former head of enforcement in the Fort Worth office played 'a significant role in multiple decisions to quash investigations of Stanford'," my emphasis, Marcy Gordon at the Houston Chronicle, 17 April 2010, link: http://www.chron.com/disp/story.mpl/business/6963074.html.
OK, Kotz. The influence was "proper". Who needs you? The SEC likes to bring many insignificant cases to few big ones. This falls right into the Vampire Squid's tentacles. Forbes noted this, my 9 December 2008 post: