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David Einhorn Slams SEC, Says Its Culture Of "Lawlessness" That Allowed Allied Capital's Fraud Cannot Continue
First David Einhorn gets invited to Congress to teach lawmakers how to deal with the Lehman problem of fraudulent reporting (which it is certain was not confined to Lehman), and now the Greenlight founder slams the SEC for its crooked culture and lack of enforcement that allowed the Allied "wrongdoing" to persist for years. As was reported earlier by the Washington Post, the SEC's inspector general found that the agency had failed to properly investigate allegations of wrongdoing at the financial firm. Now Reuters reports that Einhorn is demanding Mary Schapiro release the full version of the Allied report. After the shame associated with the Madoff affair, we wonder just how much abuse can the SEC take before it is finally disbanded for being the most worthless regulator ever to grace capital markets.
Allied harmed investors even more because the SEC failed to "We call upon the SEC to immediately release the Einhorn, who runs New York-based Greenlight Capital, SEC spokesman John Nester said, "We agree with each of the The battle between Allied and Einhorn became intensely Einhorn said that someone impersonating his wife and using
A few years from now, comparable reports will be made, investigating wrongdoing and fraud at the very top echelons of our financial world, likely implicating none other than the Federal Reserve itself, once the current most recent version of the bubble implodes and there is nobody left to bail us out. In the meantime, we can simply take solace that those who called the fraud during the recent credit bubble are finally being taken seriously. As for Einhorn's claims that Allied was going through his phone records, well that is just the price on must pay when going against the grain of manipulation and fraud, and exposing the criminals for what they are. And in the meantime, the SEC has just been relegated from being a merely incompetent agency looking at tranny porn all day, into a criminal one, expanding into the not so ripe field of child pornography.
act, Einhorn said on Tuesday. Now he wants the agency, which
has faced sharp criticism for having missed the Madoff Ponzi
scheme and other investment frauds, to show the public
everything it has on the Allied case.
non-redacted version of the report," Einhorn said. "The
government-sanctioned culture of lawlessness that allowed this
fraud to occur cannot continue."
started to bet against Allied Capital in 2002 by selling the
company's shares short after saying that he thought the company
was overvaluing its holdings.
report's recommendations, have already implemented several of
them and expect to complete the process in June."
personal when the company acknowledged three years ago that it
may have obtained Einhorn's phone records.
her Social Security number had directed the phone company to
send copies of his home phone to an online account.
»
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Hey, SEC is just doing their job of doing nothing. Stop blaming them! They didn't do NOTHING!
The double negative implies they did do something. I think you meant, They did do NOTHING!
They were busy watching porn
As Markopolos states "fire them all"
Hey ZH, like the new "new", like any gov org (outdoes the Mafia by far) the SEC will be given more money and power!
"A few years from now, comparable reports will be made, investigating wrongdoing and fraud at the very top echelons of our financial world, likely implicating none other than the Federal Reserve itself, once the current most recent version of the bubble implodes and there is nobody left to bail us out. In the meantime, we can simply take solace that those who called the fraud during the recent credit bubble are finally being taken seriously. As for Einhorn's claims that Allied was going through his phone records, well that is just the price on must pay when going against the grain of manipulation and fraud, and exposing the criminals for what they are."
Oh ya think so. When bernanke and gehtneir take off their FED name tags and put on their "IMF" name tags you won't have anyone to blame any more. These people are tricky like you can't deal with. They can do two conflicting jobs at once without even getting caught.
Shock and surprise at phone records getting snaked? I am sure a whole lot more than his phone records were and/or are being reviewed & cataloged.
Simple - Audit the Fed..
"You hear that Mr. Anderson?... That is the sound of inevitability... It is the sound of your death... Goodbye, Mr. Anderson... "
And who might you suggest to do the auditing of the FED? A division of the SEC? HEH
How about Anton R. Valukas, Chairman of Jenner and Block, the examiners who released a report on the Lehman Bros Inc. Chapter 11 Procedings recently. Lehman went down bankrupt and so will the Fed.
David Einhorn for FRB chairman.
Amen
SEC = Stupid Egotistical Cunts
"cowards" is more accurate as most Enforcement attorneys are men.
A former senior Enforcement attorney once told me something I've never forgotten. Referring to the SEC staff he said..."they play for their own team." Readers here should never forget these simple words.
SEC
SECURING EVERYTHING for CROOKS.
Not perfect, but close.
In further Conspiracy News today:
Bove Caves To Clients on Citi Rating
Rochdale Securities analyst Dick Bove is one of the foremost authorities in analyzing financial stocks, so whenever he puts out a report it is widely reported in the financial media. He recently came out with a cautious note on Citigroup (C) saying, among other things, the eventual sale of the government’s stake would limit the upside in the stock at least in the near term. He believed the 7.7 billion shares that will eventually work their way into the public marketplace would overwhelm any positive trends he saw for the stock. That is why his reversal on opinion surprised us, but the implied reason behind it was even more shocking.
David Einhorn and Harry Markopolos should make an instructional video on Fraud 101 and send some free copies to the SEC.
Leo:
They're completely different. Markopolos was a reluctant informer. Einhorn is far more bold. He runs a fund that could come under scrutiny at any moment and knows well how petty and vengeful these bureaucrats can be. Einhorn has far more to lose than Harry who has disappeared from sight since the Madoff fiasco. Einhorn is still out there shorting stocks, and we know the SEC hates the shorts.
Unless the shorts are the cabal shorting gold or silver.
Watch this interview very carefully, Markopolos was afraid for his life and bought a gun to protect himself and his family (don't tell me he Einhorn has more to lose or that Harry wasn't bold):
Leo:
Although I never watch Today I did watch this interview, and did so again. Lets go to the videotape.
HM figured out Bernie's fraud in five minutes. He's not alone; many of us who are consultants come across bogus deals all the time. He made his allegations for years. What happened to him? Nothing.
Here's Harry, speaking of Madoff: "it was him or me?" Really? There is no evidence that Bernie made a move against him. Same with the Russians and other drug cartels. I understand that HM said he was afraid, and that his fear was real, but his need for protection never materialized. (Of course, I would not want to be the consultant or conduit who told those investors to go into Madoff's fund. When it comes to hits on people its these feeder funds, etc. who should be worried. After all, they were taking fees, not HM.)
When investment professionals have their capital on the line and are working in a system where they challenge the SEC, and in this case a company in Allied with clout, these guys have reason to worry. Einhorn has a lot of people who work for him and count on him. Not just his investors. He attacked the primary securities regulator while investing in the markets.
Where's Harry now? Will we ever hear from him again? Probably not. Is he going to set up a fund? No. Is he ever going to be in a position to again challenge the SEC? Doubtful.
Einhorn's out there every day, shorting stocks, and putting on trades the SEC would love to hang him for. HM had fifteen minutes of fame, then punched-out. He had a chance to reform a corrupt system. What was he afraid of? The Russians? The drug cartels? No. When his time came he folded up and refused to continue to attack the real problem, which is the corrupt SEC. He signed off on Kotz's report that said incompetence but not corruption.
I'm not sure where you're coming from with this. You are coming across as a judgemental, arrogant jerk imo. You haven't walked a centimeter in his shoes. His book "No One Would Listen" apparently set a download record, and he is telling his story without pulling any punches re: the SEC. Listen to his Eric King extended interview and you'll see a guy who still cares a great deal.
Plus you do know Einhorn wrote the forward to said book, yes?
People in the biz are arrogant jerks by nature. It comes with the territory and having been burned by the House you worked for or the desks you trade off of. After a while you get a thick skin.
HM blew the whistle on Madoff with nothing on the line. No skin in the game. Einhorn took on a public company with clout, then got attacked by the company and the SEC who used techniques that may well have been illegal. Can you imagine what would have happened if Einhorn or another hedge fund had gone to the SEC on a ploy like that? Einhorn was right and embarrassed a lot of people who are still in the game. Hell, he wants the SEC IG Report released without redaction. You got to give this guy some credit!
The people in that report don't want their names made public. If you haven't been involved in SEC investigations and see how Enforcement plays the game you don't know. They ignored HM, but they went after Einhorn. And judging by Einhorn's statement today, he's still fighting.
Did HM save any investors? Did he change the system? No. The problem is HM had a moment and did nothing. That's not judgmental, its what happened, or didn't happen.
There are plenty of Madoff investors who wished HM would have gone further and done more because you know what? No one cares about these people any longer. So there will be fewer ponzi schemes now, but when it comes to fraud HM can't have it both ways. In that Today interview he says "don't trust the government." But when he's before the Senate, its a few sound bites, some quips, then support for the IG. What happened?
How bout this? Where are the Markopolos rules in Dodd, Frank or Obama's financial services reform? I don't see much. What's happened to long/short hedge fund managers? The SEC is after them once again after they just spent years telling us that it was okay to short without an up-tick.
Harry Markopolos opened the eyes of many investors and took great personal risk to blow the whistle on the Madoff scam. By the way, the FBI and CIA should be looking more closely into offshore accounts and sources of funds - they are a great way to launder proceeds of crime.
I respect David Einhorn and consider him to be one of the more enlightened hedge fund managers, but neither he nor Harry will change the system. No lone individual will succeed in bringing down the biggest mafia of them all.
Leo:
I like your work. Couldn't agree more about offshore accounts. As for your reference to the SEC as mafia? Be careful, you don't want to get certain people angry! The real problem is there is virtually no new oversight language in the current reform bills on financial services to better control what is an out of control regulator.
"HM had a moment and did nothing." What the phuck are you talking about?? HM tried like hell to alert the system to make changes. His testimony before congress was probably one of the most powerful I have ever seen that exposed the system for what it is. You are losing me with these emails.
HM testified a number of times before Congress. Which hearing are you referring to? You have to be specific and you have to look past the sensationalism of the Madoff event.
At his House hearing, he appeared before the Fin. Serv. Comm. where, (unfortunately,) most Members really don't understand securities, capital markets and investment concepts. His statement was carefully scripted but the Q&A was almost laughable for its lack of content. Of course there were plenty of grandstanding comments. At several points in the hearing, Members tried to get HR to consider becoming head of the SEC.
When he appeared before the Senate, along with Kotz, it was also similar. People blowing sunshine up Harry's skirt as he supported Kotz...a mutual admiration society. Unlike you, I was at these hearings and watched the players before, during and after. I watched Madoff victims get lip service and nothing more. I watched a group of SEC insiders "massage" Staff when the Committees took breaks to vote. I watched Senators and Members move from the hearing room to their next meeting having made their obligatory statements on the record.
What happened? Did we get a Markopolos Rule? No. Do the current reform packages address a dysfunctional SEC? No. Unvelieveably, in the wake of another in a string of horrifying failures who has been held accountable? No one. Will there be more oversight so Congress can figure out what's going on at the SEC before something else is missed? No.
Fifteen minutes of fame, TV interviews, a book, then nothing. Maybe HM just didn't have it in him. That's okay, but I take issue with the "canonization" of HM.
If you think for one minute anything has changed with respect to how the SEC functions think again. No profiles in courage here.
What was he afraid of?
Ask Lincoln or JFK... or the many that have been Arkancided, or the DC Madam... If you tip 'the ship' you wind up swimming with the fishes. Whistle blowers get killed, i mean suicided, on a regular basis.
FYI: A lot of Madoff's money went to Israel banksters, have you ever heard of that little groups of super sweet nice guys called Mossad?
"The SEC hates shorts"
Beg pardone, please ----- naked shorting is the key
They named rule that allowed prime brokers to take longer than 3 days to secure and cover a naked short --"The Madoff Exemption" --- no they liked naked shorts because granting this privililege secured their post retirement carreers
http://www.marketrap.com/article/view_article/91102/the-madoff-exemption-and-the-story-of-dendreon-chapter-2
By giving
One of the reasons that Einhorn gets so much hate at Deep Capture as best I can tell. There is so much self serving crap in this cesspool of greed that it is a pointless exercise trying to tell who the good guys are from one day to the next.
More on Einhorn...
http://www.deepcapture.com/how-activist-investors-david-einhorn-and-dan-loeb-brought-their-special-talents-to-bear-on-new-century-financial/
MArkopolos stated recently that he is so disusgusted with things financial that he no longer wants anywhere near the financial sector
The fact that Marko testified before congress after the Madoff affair and not a single SEC staffer has been fired, including the porn watcher, speaks volumes...
With little if any internal or structural changes, the SEC can be re-branded. Given a new make-over transformation, a new name.
BEC (Bezzle & Exchange Commission)
If anybody hasn't read it already, Einhorn's book is good by the way.
"Fooling Some of the People All of the Time"
SEC WARNING SIGN:
http://4.bp.blogspot.com/_wkgIzuqJM0w/S6gD9SdwCMI/AAAAAAAADQQ/6J8ab774Yz...
For those who read the SEC IG's Semiannual Report to Congress, (they are on the SEC IG's web page,) there are several pending IG reports that will be similar to the Greenlight/Einhorn report. Another report, more than likely also heavily redacted, may be released within the next two weeks. There aren't many willing to say the Emperor has no clothes but there are a few.
What should come from this? Since Senators are going to advance hundreds of amendments to the pending Dodd bill, someone should offer an amendment calling for aggressive oversight of SEC investigations as even Kotz seems unwilling to press his investigations to their logical conclusions. Sunshine is long overdue down at the Comm.
Oversight will further obfuscate the issue and will cost more tax dollars. They need to appoint the right people in the SEC if they really want change. People that aren't connected to the institutions(former employees, lobbyists, ect..).
The SEC is a shell agency, with "appearances" of consumer protection.
Google up the Gary Aquire/ John Mack affair if you really want to send your blood pressure into four digits. I wish the SEC was merely incompetent rather than pure evil, bought and paid for.
They are puposely incompetent which equals corrupt with plausible deniability.
A benefit to the oligarchy of a banking regulator like the FDIC and a securities regulator like SEC is, that through these government agencies, the oligarchy has access to confidential information of the regulated companies. A bank examiner comes out of each bank examination with information about the bank's largest depositors and the rates they are earning, largest loan recipients, the terms of the loans, the collateral used, financial documents used to secure the loan, what was purchased with the loan proceeds, etc. The SEC investigator has complete access to investment portfolios, client information, investment strategies, etc.
This information can be used by the oligarchy against people. To force people to make decisions that are in the best interest of the oligarchy, to destroy people. Very similar to how Nixon used the IRS for the oligarchy.
The SEC and the FDIC will never be dissolved. It is a window that can never be closed, just like the Federal Reserve.
I thought Einhorn was a bad guy.
Didn't the press (back in 9/08) say his comments brought down Lehman.
Makes me wonder who was trying to bring down Einhorn back then.
The new mantra --The hedge funds are good --- the hedge funds are good ---- the hedge funds are good
They are good unless you dig into their naked shorting adventures
As long as the SEC continues to block investigations that would expose this administration Mary Shapiro will have a job... that and busting operations that the White House doesn't benefit from.
A person is either wearing shorts or they are naked.
You can not have it both ways.
<retail investor hording FRN's>
I think you meant "ever to DISGRACE capital markets."
Does not mean exactly. Could have said must be stopped.
Whatever, he is fully right. Most things continue until they cant continue. His take on the culture (sic) of lawlessness is not different. Another blatant example of an on the edge way of thinking...
USD index continues to get stronger, and we know what that means ...
http://www.zerohedge.com/forum/latest-market-outlook-0
Our government is so corrupt and incompetent now, it is the greatest threat to our future. The SEC, the FAA, the Department of Energy, Congress - the list of worthless institutions is virtually endless. Thankfully, there are a few individuals like Einhorn that try to make a difference.
SELLIN BUICKS WITH CHRISTOPHER COX:
http://williambanzai7.blogspot.com/2010/03/sellin-buicks-with-chris-cox....
Einhorn is not the only one that knows about this but seems to be the only one that will point it out willingly.
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