"The [SEC] suspected Texas financier R. Allen Stanford of running a Ponzi scheme as early as 1997 but took more than a decade to pursue him seriously, according to a report further tarring the agency that missed Bernard Madoff's huge fraud. The report by the SEC's inspector general says SEC examiners concluded four times from 1997 to 2004 that Mr. Stanford's businesses were fraudulent, but each time decided not to go further. ... The former SEC official, Spencer Barasch, is now a partner at law firm Andrews Kurth LLP. ... The inspector general referred Mr. Barasch for possible disbarment from practising law. ... SEC Inspector General David Kotz's report suggests the agency's mistakes in the Stanford case were in part the result of a culture that favored easily resolved cases over messier ones. Cases such as the alleged Stanford fraud weren't considered 'quick hit' and 'slam dunk,' and examiners were discouraged from pursuing them, Mr. Kotz found. ... Examiners noted that Mr. Stanford was promising to pay investors a return well above the market, without any apparent way of delivering on that promise. ... SEC enforcement officials also appeared to have ignored warnings from insiders at Stanford's operations", my emphasis, Michael Crittenden & Kara Scannell at the WSJ, 17 April 2010, link:
Another day, another missed fraud at the SEC.
2 comments:
Oh well...
The rich got richer and everyone else got poorer.
Pity, eh?
" ... a culture that favored easily resolved cases over messier ones ..." Isn't this the same reason that J. Edgar Hoover's FBI for years pursued interstate auto theft rather than the Mafia? Isn't it also a prime "cultural" indicator that many of the people at the agency aren't there to do serious work but to pad a resume for their later career moves?
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