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HomeMight the Hunter Become the Hunted? Judge Jed Rakoff, Mary Schapiro, and Rule 14a-9
Posted by Larry Doyle on February 18th, 2010 8:51 AM |
Judge Jed Rakoff and SEC Head Mary Schapiro
SEC Chair Mary Schapiro is on the front page of almost every major financial periodical for her ongoing pursuit to fine Bank of America for impropriety in handling its merger with Merrill Lynch.
Recall that the SEC had initially fined Bank of America $33 million last fall for its improper disclosure of Merrill’s financial figures to BofA shareholders prior to the shareholder vote approving the merger of these two financial titans.
Enter Judge Jed Rakoff who threw out the $33 million fine, calling it a ‘contrivance.’
With the ball squarely back in the SEC’s court, Mary Schapiro has now fined Bank of America a tidy sum of $150 million, but still did not pinpoint any single individual at BofA as being culpable for the impropriety. (more…)
Judge Rakoff Orders FINRA Documents to Remain Sealed
Posted by Larry Doyle on February 17th, 2010 9:26 AM |
Nobody ever said it was going to be easy.
The pursuit of truth, transparency, and ultimate integrity in our financial regulatory system can only be equated to a 15 round heavyweight fight. Yesterday, the sting of opposing blows landed hard upon our face as Judge Jed Rakoff ordered FINRA documents relating to the very formation of this Wall Street self-regulatory organization to remain sealed.
Recall that the request to unseal these documents was made by attorneys representing Dow Jones, Bloomberg, and The New York Times. From the blogosphere, Sense on Cents also wrote to Judge Rakoff requesting that he order these documents to be unsealed. The information embodied in the documents addresses an allegation made by attorneys representing a plaintiff, Standard Investment Chartered, in a lawsuit filed against FINRA. The crux of that lawsuit is that then FINRA head (and current SEC Chair) Mary Schapiro and her fellow FINRA executives lied verbally during roadshows and in writing via the proxy statement issued for the merger of the NASD and NYSE Regulation to form FINRA. (more…)
A New Low at the SEC: Internet Porn-Surfing
Posted by Larry Doyle on February 4th, 2010 6:50 AM |
High five to our friends at The SIPA for further exposing, no pun intended, a story that employees (including high ranking officials) at the SEC seem to have had a predilection with internet porn sites. The Washington Times reported, SEC Workers Investigated for Porn-Surfing.
You can’t make this stuff up. Kudos again to The SIPA for putting the proper level of seriousness into its review of this story:
Who cares if employees watch Porn?
Millions of American Investors should!
(more…)
SEC IG Report: George Demos Pimped Peter Sivere
Posted by Larry Doyle on January 28th, 2010 9:02 AM |
Who is George Demos? A former enforcement lawyer in the New York office of the SEC, currently running for Congress from Long Island.
Who is Peter Sivere? A former compliance employee at JP Morgan.
Sivere crossed paths with Demos in 2004 while providing information related to an investigation of questionable mutual fund trading activity. In the midst of Sivere’s engagement with the SEC, his confidence was violated. I highlighted this reality the other day in writing, “The SEC Pimped Peter Sivere.”
Who at the SEC blew Sivere’s cover? Today we learn it was George Demos. (more…)
The SEC Pimped Peter Sivere
Posted by Larry Doyle on January 22nd, 2010 10:14 AM |
Add Peter Sivere to the list of people totally screwed by the Wall Street-Washington incest.
The incestuous nature of the Wall Street-Washington relationship runs across many segments of our financial landscape. That said, the corrosive nature of this incest is most egregious within those institutions charged with protecting investors, that is the SEC and FINRA.
The SEC and FINRA failed the Madoff investors, the Stanford investors, and ultimately the country as a whole. I firmly believe the financial regulatory system failed to perform because it was in bed with the industry and served at its behest. To what extent are the regulators still in bed with the industry? (more…)
The Financial Crisis Inquiry Commission Should Investigate…
Posted by Larry Doyle on January 11th, 2010 9:28 AM |
Will America ever truly learn what happened on Wall Street that brought our markets, our economy, and our country to its knees?
We should not expect the incestuous Wall Street-Washington partners to implicate themselves and thoroughly expose their shortcomings. A full 16 months since the failure of Lehman Bros. and how much have we truly learned? What change has really occurred? Who has been fired in Washington? Who has been indicted on Wall Street? Will the Financial Crisis Inquiry Commission, charged with investigating the factors which facilitated our economic disaster, truly be effective?
The truth may hurt but if the hard questions are not asked, the failings are not exposed, and those responsible are not held to account, then the lessons will not be learned, and the experience will likely repeat itself.
Will the commission pretend to investigate, but ultimately wilt under the pressure of the incestuous pillars of power? Will the commission rise above the fray, hold people and institutions to account, and make our country proud? Will the commission use its power to subpoena, if need be?
Whom should the commission pursue? What agencies and institutions should the commission target? If I were on the commission, I would recommend pursuing the following targets: (more…)
Kanjorski and Ackerman Undress the SEC and SIPC
Posted by Larry Doyle on December 15th, 2009 2:47 PM |
Having written about the massive regulatory failures on Wall Street for the better part of 2009, I am heartened by the House Finance Sub-Committee on Capital Markets hearing last week. The bell that tolled in this hearing deserves to ring loud, long, and clear across our great land. The regulatory and insurance failures on Wall Street deserve to be exposed far beyond Sense on Cents.
Rackets operate best in the dark. Well, let’s get that flashlight out again!
For those unaware, SIPC (the Securities Investor Protection Corporation) is an insurance fund in which member firms pay premiums to cover losses. From SIPC’s own website, we learn:
What SIPC Covers . . . What it Does Not
The cash and securities – such as stocks and bonds – held by a customer at a financially troubled brokerage firm are protected by SIPC.
Among the investments that are ineligible for SIPC protection are commodity futures contracts and currency, as well as investment contracts (such as limited partnerships) and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.
It is important to recognize that SIPC does not work the same way as the Federal Deposit Insurance Corporation in terms of blanket protection of losses.
For this insurance coverage, SIPC charged its member firms an annual premium of $150 from 1996 until April 2009. That is no joke. Wall Street firms paid a token $150 a year to promote the idea that your investments were protected. While SIPC did have a $1 billion reserve fund, that was woefully insufficient to cover the losses incurred in the Madoff scam. Make no mistake, though, the SIPC annual premium of $150 should also be looked upon as a scam.
Think of it. Individuals pay far more for auto insurance than Goldman Sachs paid for investor insurance for over 12 years.
Are you getting increasingly pissed off? America should be extremely pissed off. The SIPC coverage has been a critical part of the Wall Street racket. (more…)
Washington Examiner: “A Fox Is Guarding the Henhouse at the SEC”
Posted by Larry Doyle on November 24th, 2009 9:26 AM |
Add the Washington Examiner to the increasing number of media outlets picking up on the stench emanating from the incestuous Wall Street-Washington relationship encompassing our nation’s financial regulatory oversight. How so? The Examiner‘s Marta Mossburg writes today, A Fox Is Guarding the Henhouse at the SEC. Who is this fox? None other than Mary Schapiro, current head of the SEC and former head of the Wall Street self-regulatory organization FINRA. Mossburg highlights:
Not everyone opposes giving government sweeping new powers like those being considered over health care and the finance industry. But everyone should care that those in power are competent, apply the law fairly and hold themselves to the highest ethical standards.
As regular readers of Sense on Cents are aware, I picked up the scent on this trail last January and have doggedly tracked it for the last ten months. I am heartened that other interested ‘hunters’ are also now putting out their ‘dogs’ in pursuit of exposing truth within our financial regulatory system so that our nation can embrace the badly needed virtues of transparency and integrity in the process.
Aside from Sense on Cents and now the Washington Examiner, who else is on this trail and tracking the scent? Barrons, Bloomberg, and The New York Times. (more…)
