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Taibbi Further Investigates Furey v SEC

Posted by Larry Doyle on June 3, 2013 10:11 AM |

Wouldn’t you like to have been a fly on the wall to witness what really went on  — and still goes on — within the offices of the SEC and our other financial regulators?

Oh the stories and tales of woe that one might be able to share. Every now and then, though, one does not need to worry about being a fly because details of internal intrigue make their way out of the commission.

To that end, a few weeks back both Bloomberg’s Bill Cohan and I shed light on the incredible allegations of incompetence, negligence, if not outright corruption within the SEC made by an internal whistleblower Kathleen Furey.

Over the weekend Rolling Stone’s Matt Taibbi provided even greater transparency on the incredible — or in light of what we have learned about the SEC, perhaps not so unbelievable — allegations made by Ms. Furey in her whistleblower complaint. Those familiar with this case may recall that Furey alleged her superiors within the SEC’s New York office maintained that they did not handle cases dealing with investment managers. Incredible? Unbelievable? Maybe not so much.

Although that allegation may be hard to believe, in light of the SEC’s bungling of the Madoff case, little that emanates from the SEC defies credulity any longer.

Taibbi digs deep into Furey’s suit to reveal that the specific investment management case her superiors refused to pursue dealt with Value Line. Beyond that, though, Taibbi writes that he reached out to those at the SEC to provide concrete evidence of investment management cases which they did pursue so as to refute the main point of Furey’s suit. He writes,

When I contacted the SEC, I made it clear that if they could produce any evidence that Furey’s statistics were off, that Stepaniuk’s unit had in fact filed IAA or ICA cases during the relevant time period, then I probably wouldn’t write about her complaint.

Well, he is writing.

For those who think that there is not a corrosive and corruptible culture that has made a real stronghold within the halls of the SEC, I compel you to read, Why Didn’t the SEC Catch Madoff? It Might Have Been Policy Not To.

Navigate accordingly.

Larry Doyle

Isn’t  it time or overtime to subscribe to all my work via e-mail, an RSS feed, on Twitter or Facebook.

I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Peter Scannell

    “…snowballed into far bigger disasters than was necessary because the agency identically blew off those two whistleblowers.”

    Whoa….

  • Virginia

    Just like it was apparently policy not to catch the unassigned mortgage loans and empty trusts!

  • Matt

    It’s notable that some of the best reporting about this, and most of the other shenanigans in the securities and banking industries, are reported by a writer on the Rolling Stone staff. The main stream business media have been largely silent about, if not complicit in covering-up, these scandals! Kudos to Matt Taibbi.






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