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Home“We’re Not Prosecuting the Bad Guys”
Posted by Larry Doyle on November 9, 2010 7:44 AM |
Who needs major print media which will not aggressively report on stories deserving real exposure when we have Sense on Cents to spread the faith while pursuing truth, transparency, and integrity? Regular readers hopefully appreciate that I do not easily engage in hyperbole but I am compelled to highlight the virtues of my blog this morning based on a comment left here last evening at 11:58pm.
A reader by the name of Nancy shed light on her less than satisfying Finra arbitration process. In the body of her comment, Nancy alludes to a retiring CFTC administrative Judge George Painter’s very serious allegations of misconduct by a fellow CFTC administrative Judge Bruce Levine. How serious is Painter’s allegation? As Nancy highlighted,
As George H. Painter was preparing to retire recently as one of two administrative law judges presiding over investor complaints at the Commodity Futures Trading Commission, he issued an extraordinary request:
Please don’t assign my pending cases to the other judge. In a notice recently released by the CFTC, Painter said Judge Bruce Levine, his longtime colleague, had a secret agreement with a former Republican chairwoman of the agency to stand in the way of investors filing complaints with the agency.
While almost spilling my coffee, I thought this must have been a charge issued long ago and far away. If it were a recent charge then surely it would have been widely covered by a host of major outlets. If not that, could Nancy have simply received erroneous information? I was sufficiently intrigued to see what I might unearth. Soon thereafter I once again learned why I give little credibility to major financial media in our nation. This ‘grenade’ was launched a mere two weeks ago. While some readers may have already seen this story on some selected blogs, the only major news outlet to provide any respectable degree of coverage to this bombshell is the Los Angeles Times. I commend them. Let’s navigate.
The LA Times’ Michael Hiltzik highlighted this blockbuster allegation in writing, Retiring CFTC Judge’s Allegations Should Concern Small Investors,
Cards on the table: When George H. Painter says the game is rigged against the small investor in Washington, I have reason to take him at his word.
Even when his word comes wrapped up like a bombshell.
Painter, 83, detonated that bombshell recently in the course of announcing his retirement as an administrative law judge for the Commodity Futures Trading Commission, effective in January. In a public notice, he accused his lone colleague on the CFTC bench, Bruce Levine, of having made a vow nearly 20 years ago never to rule in a complainant’s — that is, an investor’s — favor.
“A review of his rulings,” Painter stated, “will confirm that he has fulfilled his vow.”
He asked the CFTC, which regulates the commodity futures markets, to bring in a new judge instead of transferring his pending cases to Levine. The two judges rule on allegations of fraud or other misdeeds brought by investors against futures brokers and traders.
Strong words, but not entirely out of character for Painter. And they’ve stirred up a fairly ugly cloud of dust, involving claims and counterclaims about Painter’s physical and mental health, traded between his wife and other members of his family in a Maryland court. Whether the court case would have reached the newspapers if not for Painter’s attention-grabbing resignation is hard to say. But it’s now being used to dismiss his attack on Levine as the words of someone who’s not all there.
I first encountered Judge Painter nearly three decades ago, when he issued a number of stern rulings involving a Newport Beach investment operator I had been writing about.
The investment firm, Monex International, had been hawking illegal futures contracts, he ruled. In one case, he found that Monex had ignored a customer’s repeated pleas to cash out her deteriorating stake, and awarded her $20,000 in reparations.
When I reached Painter again last week, he didn’t seemed to have changed much. “It’s gone to hell,” he said, referring to the standing of the investor at the CFTC. “But it’s always been that way, hasn’t it? We’re not prosecuting the bad guys.” For the record: He sounded perfectly lucid.
Why did Painter wait so long to expose this ‘rigging of the process?’ What do other judges in the system have to say? What about investors who had their cases heard by Levine? Can those cases be reopened? Is this allegation by Painter nothing more than another twist in the incestuous relationship between Wall Street, Washington, and the financial regulators charged with protecting investors?
Why should we be surprised when investors leave our markets never to return. When investors and their capital are not properly protected, our markets, our economy, and our nation suffer. That statement is no hyperbole but is the harsh reality of the nation in which we live today….and it encompasses a wealth of ‘sense on cents.’
Navigate accordingly!!
Larry Doyle
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I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.
