SEC Hit With Data Destruction Complaint 148
DMandPenfold writes "The Securities and Exchange Commission (SEC), the US financial regulator, has been accused of destroying thousands of data files on high profile inquiries including an early-stage investigation into convicted Ponzi scheme fraudster Bernard Madoff. The allegations, raised by former SEC employee Darcy Flynn, have prompted the US Senate Judiciary Committee to write to SEC chairwoman Mary Schapiro to demand an immediate explanation. The SEC exists to set a tough example on corporate governance, and it fines banks heavily for both lax practice and deliberate malpractice. Questions over any involvement it may have in sensitive document destruction are not likely to sit comfortably with some in the industry. The SEC insists it has kept records in accordance with the law on its computer system."
RE: US Ponzi (Score:2, Informative)
The US government is running the exact same ponzi scheme. With a good credit rating and increasing debt attracting investors in unsustainable deficit spending, Standard and Poor called it in the last negotiations to raise the limit. It is a risky investment even though the past payment record has been perfect. Obama has declared the rating invalid. This is like Enron declaring a downgrade invalid.
Rolling Stone (Score:5, Informative)
Those interested in the particulars might also want to check out a recent Rolling Stone article by Matt Taibbi. Basically, the SEC feels that until an actual case is opened, it is not required to store files for "matters under investigation". Definitely worth a read.
http://www.rollingstone.com/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817 [rollingstone.com]
Revolving door (Score:5, Informative)
The SEC doesn't enforce anything at the big banks, because those companies are where ex-SEC lawyers go if they want a big paycheck later. You don't prosecute your future employer. They only go after little fish just so they can appear as if they are doing their job. Small hedge fund who did something wrong? Expect the SEC to kick your ass if you cross them. Firm like Goldman? The SEC management will stop any attempt to investigate them, because the top people have their eye on retiring from there to a cushy Goldman job.
There's a good chat with Matt Taibii, author of the fun Why Isn't Wall Street in Jail? [rollingstone.com], discussing how SEC Document Shredding Covers Up Wall Street Crimes [dailybail.com]. This has been going on for a long time now, and the shredding is central to why the Bernie Madoff scheme wasn't caught earlier too.
Re: US Ponzi (Score:5, Informative)
Wrong. The lions share of our debt comes from the deficit caused by the Bush tax cuts and the unbudgeted spending for the Iraq war. I saw a chart from a couple months ago that attributed about 10% of our $14 trillion debt to Obama.
Re: US Ponzi (Score:5, Informative)
Obama [... has] run up more debt in less than 3 years that GW Bush did in his whole 8 years...
There's no need for lies here. We've incurred $2.4 trillion in debt under Obama and a staggering $6.1 trillion under GW.
Don't believe me? You can check for yourself [nytimes.com], but I don't take you to be a facts-based kinda guy.