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Mary Schapiro Owes America Answers

Posted by Larry Doyle on July 21, 2010 1:00 PM |

Pursuing the truth does not come from asking softball questions and allowing those being questioned to duck and weave. Regrettably, America has received far too little of the truth throughout our economic crisis. Why? Very simply, the overwhelming stench emanating from the Wall Street-Washington incestuous relationship very frequently suffocates any chance of the truth seeping out. Where can we turn?

Let’s visit our friends at POGO, that is the Project on Government Oversight. This not-for-profit government watchdog has no problems asking the hard questions. In light of my commentary last evening on Mary Schapiro, I was pleased that a friend of Sense on Cents brought to my attention a series of questions directed at SEC Chair Mary Schapiro.

Thank you, POGO! America deserves answers to the following Questions for SEC Chair Mary Schapiro as She Testifies Before the House:

SEC Chair Mary Schapiro is currently testifying before the House Financial Services Committee. We applaud the Committee for providing some much-needed oversight of the “present reforms and future challenges” facing the SEC.

Here are just a few questions we’d like to see the Committee ask Chairman Schapiro:

>>Are you aware of the serious allegations of whistleblower retaliation at the SEC’s Ft. Worth office, as recently confirmed by the Inspector General? What steps has the agency taken to hold the Ft. Worth officials accountable for retaliating against their own employees, one of whom played an instrumental role in uncovering the Stanford Ponzi scheme?

>>Given your experience as the former head of FINRA in the period leading up to the financial crisis, do you still believe that self-regulation is an appropriate model for overseeing the brokerage industry? Why, in your view, did FINRA fail to adequately regulate many of its larger firms that were at the heart of the financial crisis, including Bear Stearns, Lehman Brothers, and Merrill Lynch, and why did FINRA fail to detect the Madoff and Ponzi schemes? How do you justify the outrageous compensation paid to FINRA executives in 2008, a year in which the economy nearly collapsed and FINRA lost $568 million its own investment portfolio?

>>What steps is the SEC taking in response to the recent report by the House Oversight Committee minority staff, which detailed several systemic problems that are hindering the SEC’s effectiveness, including outdated disclosure technology, a lack of collaboration between offices, and a lack of management and finance experts?

>>Have you made any progress in acting on the hundreds of unimplemented recommendations from the SEC Inspector General? Why does the SEC routinely ignore the IG’s recommendations for disciplinary action in cases of serious misconduct?

>>Do you believe that the revolving door has undermined any SEC investigations? Would you consider making your agency’s revolving door statements available to the public as a check against future revolving door abuses?

>>How are you planning to allocate resources and staff time to handle the many responsibilities that have been tasked to the SEC in the Dodd-Frank Wall Street reform legislation, such as increased oversight of hedge funds and an expanded authority to oversee securities-based swaps—not to mention the countless studies buried in the bill?

>>What specific steps has the SEC taken to improve its FOIA procedures in response to the IG’s finding that the SEC has one of the worst FOIA response rates in the government?

>>Why has the SEC only awarded five whistleblower reward payments in the past two decades? What is the agency doing to prepare for its soon-to-be-enhanced authority to make reward payments to whistleblowers who provide the agency with tips, and how is the agency improving its procedures for protecting whistleblowers against retaliation?

So what is it going to be Mary? When will you provide the answers that all of America wants addressed?

Will the truth set you free?


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