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More Pain For Humiliated SEC After Disclosure It Ignored Moody's Whistleblower Warnings
As if the SEC could be humiliated any more, another piece of disclosure now highlights that Mary Schapiro's useless organization was unresponsive to whistleblower overtures by former Moody's employees attempting to warn the regulator "about Moody's weak compliance department and ratings process."
From Reuters:
A congressional panel will expand its examination of credit rating
agencies to look at why U.S. securities regulators ignored warnings
from former Moody's Corp executives about the company's weak compliance department and ratings process.
"We want to look at the fact that the Securities and Exchange
Commission did not respond" to concerns from Moody's former head of
compliance, Rep. Edolphus Towns, chairman of the House Oversight and
Government Reform Committee, told CNBC television on Wednesday.
Towns' panel held a hearing on Wednesday to probe allegations from two
Moody's whistleblowers that company managers favored revenues over
ratings quality.
And here is how the SEC's worthelessness from the Madoff affair has ported over into comparable situations, with the regulator apparently having learned absolutely nothing from the its humiliating episode yet.
Scott McCleskey, a former Moody's senior vice president of
compliance, sent the SEC a letter in March 2009 alleging that he was
routinely ignored when he warned that the firm was not properly
monitoring municipal bond ratings.
Eric Kolchinsky, a recently suspended managing director at Moody's,
will tell Congress that analysts are "bullied" by managers who override
their decisions to generate revenue.
"Kolchinsky tried to tell the SEC about his concerns but his calls
were not returned," according to a memo prepared by Republican members
of the committee and obtained by Reuters.
Judging by the SEC's extremely time consuming attempt to cover up for Ken Lewis all throughout the year, we are confident that all parties involved fully understand and sympathize with Mary Schapiro on this one.
And yet the question of whether the SEC, or Moody's for that matter, is needed in any formal capacity going forward remains unanswered:
An SEC spokesman has said the agency has established an examination
program for credit rating agencies that includes reviews of
disclosures, policies, and procedures regarding municipal securities
ratings.
"We are focusing carefully on the tips and complaints we receive and
following up, where appropriate, with examinations targeting suspected
problems," SEC spokesman John Nester said.
In other words, we are doing all we can to make the lives of our future employers cushy and devoid of any jail time. In the meantime we have an inbox full of tips and concrete information that highlights criminal activity that we may actually open up some time in 2018, or by the time the SEC is dissolved with impunity for being a $900 million annual drain of taxpayer money, whichever comes first.
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Utter incompetence only goes so far as an explanation. Where are the prosecutions? Bring out the Dead I shout!!
Considering FINRA allegations, SEC ignorance and selective enforcement appears more like a deliberate attempt to discredit regulatory agencies to consolidate power under the Fed Government Monopoly Franchise umbrella.
BTW, since we haven't figured out how to comment on interesting squawk-box news, we can only observe that the Iran War was one of the best advertised Armagedden non-events for years, considering China and Russia both have mutual defense treaties with one of the largest oil and gas producers.
Usually, official denials confirm events and it pays to fade headlines. There may be an exception this time, if not the AAA rating of France.
That the House of Saud now denies plans to support invasion of Iran may be better designed for Saudi Arab domestic consumption to deter terrorist coups.
That the Yale Academic inventor of the Case Shiller Index is saying "The turnaround in Real Estate is real" makes us want to double up on DRV above 16.23...
JubileeProsperity.com
TD, you should start a spinoff site and just fill it with all the front running, commingling, conflicts of interest etc. that the SEC fails to do anything about time and time again. You would never run out of material.
Or ZH should begin assigning file numbers to each instance. Then, we'd have an easy nomenclature to discuss the various instances. Hell, maybe we could get a firm of trial attorneys interested in some of the cases. This could be money...
Get a rope as we say down here in texas.
Cheers,
Pigpen
a little different in new york
http://www.youtube.com/watch?v=TllbGtempQ4
We all know that they will continue to support the "future employers" and that they are a sham organization. Bottom line is they are as entangled in all the cronyism and lies as anyone on Wall St. or in Washington. This is kind of like the 400 - 1000 economists on the Fed's payroll that got it all wrong in the first place as well. IF THEY GET IT RIGHT THE FIRST TIME CRONYISM FAILS. I guess that the whistle blowers need a new MORE PUBLIC FORUM like ZH, cause reporting to the boss who's boss and other boss are in line for the move to the bonus laiden BD's won't report SHIT. TD, time for you to open the doors to a public forum for whistle blowing. They can't stop it here.
I mean really, think about it, out in the open in the public not reported by CNBS actually actionable REAL TIME WHISTLE BLOWING.
where is mike hunt when you need him?
luckily for the SEC, americans pay very little heed to things they don't understand.
"sent the SEC a letter in March 2009..."
Real timely; sounds like CYA to me.
"We are focusing carefully on the tips and complaints we receive and following up, where appropriate, with examinations targeting suspected problems," SEC spokesman John Nester said.
The SEC's job would appear to be easy then, since they don't bother to return phone calls that might have a tip or complaint.
And what does "following up, where appropriate" mean? How can you know whether the tip or complaint is appropriate UNLESS you follow up? ...just another escape hatch....
What is the point of a probe? No one is going to jail for any of this. The people of this country have already lost the war against the slave masters.
If you really want change, I say July 4, 2010 every tax payer stop work and dont plan to return, until they fix the injustices, claw back every Tarp dollar, close down the fed, backstop all bank accounts under a new U.S currency, then tell the banks, brokers, and the FED, their old dollars are now worthless, and move on with new leaders, new banking system, new money etc.
Who is John Galt?
Blah blah. It's over. Blah blah. It's too late. Blah blah. They've already won. Blah blah. You should have piped up years ago to put a stop to this.
You can leave a damaging relationship ANY time you want to. This is just creating the necessary pressure for people to reach deep inside and shout a "Fuck off" that even the deaf can hear.
I believe that SEC is too ignorant to be humiliated.
The SEC is culpable for breech of contract, nuff said...
Whistleblowers are perceived as disgruntled employees with axes to grind who are making up lies. This, mostly, is untrue. They, with some exceptions, are only people with values who wish the truth be told. Unfortunately, few are listened to and most are discriminated against. The system is corrupt and will remain so until thoroughly cleansed. How? Well, you figure it out.
The SEC, that's a good one! HAHAHAHAHA!!
Alan Grayson did it again. He called it as he sees it. Check out "Die Quickly" at HuffPo
http://www.huffingtonpost.com/2009/09/30/alan-grayson-republicans_n_3039...
That does nothing to help us audit and end the FR. I realize dude is a flaming lib, but suggesting that Republicans want people to "die quickly." That's a real coalition builder.
In Grayson twisted democratic mind, when ill, we the republicans would provide you with access to an individual suicide-facility. This is pure nonesence!
We the republicans would of course provide you with access to a mass suicide facility.
Beside focusing on ignored warnings, I'd like to see some SEC insiders come forward with information on what happened to employees who actually TRIED to do their job.
My guess is a pattern of systematic application of pain and career limitation for anyone who tried, and promotion and rotation into high paying industry positions for those who were "with the program". The trail will lead all the way to the top. It happens when political cronies who are "with the program" dominate an institutions leadership, at the expense of good people trying to do a competent job.
Having had the professional opportunity to take over a failing/failed operation I can tell you that just trying to figure out where all the shit is hidden, much less figure out who's incompetent and who has the real inside data is near impossible. Also the employees are civil servants so weeding out the Bush idealist at the SEC who want government to fail, is a long term prospect.
The SEC needs to work off hours only. They are so afraid of spooking the markets or causing a crash. 1st order of business is to work off hours. Make mandatory contacts of all officers and company lawyers.
Then - we wake to a new day with jails filled to the gills and the market working accordingly.
State Attorneys General. The federal system is too corrupt to protect any investor.
Link to A.G.'s
Sorry for the offtopic, but does anyone have any news on the Bloomberg FOIA? I can't find anything?
today is the deadline for the Solicitor General to decide
It boggles my mind that by now, we don't have some very powerful people in Congress talking loudly and openly about burning the current SEC to the ground and starting over from scratch.
The agency is an embarrassment to the country, and serious-minded people in general.
The very powerful people in Congress (in both parties) are bought and paid for by business. I would be shocked if the powerful people in Congress aren't the ones who CEOs call when the SEC is giving them any trouble to get the SEC off their back. Look at the pressure Congress brought on FASB in recent years on the expensing of stock options and mark to market accounting by financial institutions.
The problem is they don't have enough money. The SEC needs more money, for things like Q-tips, peroxide, and hearing aids.
"We need significantly more money, I think, than we have at the moment.
"http://www.zerohedge.com/article/mary-schapiro-we-need-signifcantly-more...
Is there going to be enough agents to still employed to bring in all the criminals? lol
Satanists have no sense of humiliation.
http://rawstory.com/2009/09/us-secretly-tried-to-make-deals-with-goldman...
NEW YORK, N.Y.—The government secretly tried to orchestrate a deal involving Goldman Sachs in the week following Lehman Brothers’ collapse and considered using the Federal Reserve to help support such a transaction, Andrew Ross Sorkin reports in the new issue of Vanity Fair.
In an excerpt from his forthcoming book, Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves, Sorkin reports that the deal, which was nearly consummated, would have merged Goldman Sachs and Wachovia. Henry M. Paulson, the Treasury secretary and former C.E.O. of Goldman, was deeply involved in the process, contacting both Lloyd Blankfein, Goldman's current C.E.O., and a Wachovia board member, and strongly urged both to consider it. Wachovia’s C.E.O., Robert Steel, was a former vice-chairman at Goldman Sachs and Paulson’s former number two at the Treasury Department.
But didn't their budget double a couple of years ago? I remember reading that their budget doubled but I don't recall when.
Just exactly how much money is it going to take for reasonable response / enforcement? It's galling that an agency with tips provided on a silver platter cannot seem to find their way out of a paper bag.
I say dissolution of SEC at this point, save some (worthlesser) dollars in the process.
And while we're at it lets elim the FDIC too, and see just how many miliseconds it takes for some of these banks to go down.
I am shocked...while at the same time I'm not.
Yeah... it make you wonder how a NY attoney general (Spitzer) was able to prosecute as many cases when he had... what... one twenty-eth of the SEC's budget?
The SEC is a totally worthless institution... and has been so for years.
There goes the dollar and equities rally right on cue. I love managed markets. So neat and tidy unlike pigpen.
Gold +10. Woohoo!
I am Chumbawamba.
WOPR special month/quarter end pump!
Lizzy, how is oil spiking with higher builds?
Is this all trashing the dollar asset play?
i got told "being put up for month end"
while gasoline demand is up over 5% in the last month (y/y - think about what u were paying @ the pump this time last year), middle distillate demand, in the last 4 weeks, if off by more than 9% (y/y).
supplies continue at close to all time highs.
but crude doesn' t trade supply/demand. trades as an asset class and is thus subject to random market moves (or rampant manipulation depending on whether one is hyperventilating at the moment) along with all the other asset classes.
And the Fast Money halftime show tells us to buy everything.<shocked>
After seeing this today, anyone that goes short has to be nuts. The market seems to be unshortable. Everytime you do, you get whacked. We will be in the green by close, almost there now. Amazing.
It's end of quarter, managers need the pop for the window dressing.
There would be less corruption without the SEC.
So... the bears trap seems to have worked yet again for the gang... Take a look at the 10-day chart of the SPY... and notice the veeery normal behavior betwwen 11:35am and 1:00pm today... with a 1-hour delay following the fall of the dollar.
Anyone see this SIFMA conference coming up. Look at the shmucks they have lined up and tell me the system is not rigged towards the large banks
http://www.sifma.org/events/2009/451/save-the-date.html
I wonder if the folks running the SEC will start taking their jobs more seriously even though public embarrassment, external pressure, and a moral obligation to do their job have so far failed. However, now the other option is to be roaming around Wall Street unemployed.
For the more capitalist-minded, that's called "eliminating the agency problem" and/or "properly aligning incentives"
SEC? Don't bring football into this...
Guys, even though the USD is tanking to year lows, its still stronger than it was maybe 2 years ago. I remember at that time the CAD was worth almost 1.1 USD. Anyhow, if you think of all the QE and treasury issuance going on lately, the USD has held its ground pretty well. Given that fact and the soon to be ending QE, the USD should do much better going forward as long as those Fed Reserve Fckers keep their word. What that means is that all those people who bought into these treasuries the last few months will eventually be happy. Maybe there was an agreement by the Fed and other central banks that they will eventually take the dollar higher after they are done with all the treasury offering and that purchasers may take an intial hit in the short term but longer term if they dont sell out, they will not be dissapointed. Which may explain the increased foreign buying in treasuries. This makes sense because the USD will have not done much since the beginning of the issuance, yet they managed to issue so much more debt and everybody is happy again....well except maybe the stock and commodity markets.
If QE stops in earnest, then the economy will collapse. We will have a strong dollar and no economy.
Of course the Obama administration and Congress' priority is their banking buddies.
V!ctory for the Bulls!
You (or all 40 of you, who knows anymore) like to concentrate on Mary Schapiro but, didn't most of this "Pick Up The Soap Chris") Cox?
Yes. And Mary is just carrying the baton.
Trying to figure out who's worst among Harvey Pitt, Chris Cox and Mary Schapiro, the last 3 SEC heads, is like trying to choose who was most evil between Hitler, Stalin and Pol Pot
I must have accidently deleted part of my post before posting but, the post should have said. . .
"You (or all 40 of you, who knows anymore) like to concentrate on Mary Schapiro but, didn't most of this happen under Harvey (The Pits") Pitt and Christopher ("Pick Up The Soap Chris") Cox?
To add, I'm not defending Mary Schapiro per se just that the The 40 TDs concentrating on her being the transgressor all the time is not accurate to the situation.
Ok....Proper regulation is very simple....
This requires "simplifying" the markets....
1) De-fragment the exchanges....all securities asset classes
2) All price discovery happens on this public
de-fragmented exchange....
3) The Short Selling issue is simply resolved....
All long stock is electronically tagged.....
First come first served....finite supply....
Thus no need for an uptick rule....
4) Public wiki information venue....all security classes
5) All public securities have to be electronically exchanged on the public exchange.....This means no internal
matching or black pools....
6) All exchangers pay the same rate....perhaps 20 cents per 100 units....
This is available today....Why not for all tomorrow ?
7) A uniform direct access exchange based on already proven
BATS style technology will make for a fair, worldwide, universal exchange for all public securities....
8) All entry requirements are boiler-plated....
9) All periodic wiki information is boiler-plated....
10) All transactions are handily electronically monitored....
11) The SEC must be shut down....One does not keep giving the bus keys to drunk drivers....who happen to be the police as well....
Time to freshen the scene....
All govt. employees will have to have a 36 month period
before being employed by corp. securities businesses....
I want to know why these corrupt outfits still get to be known as "agencies". They're not agencies, they're companies. They should be known as ratings companies. Are POT, MOS, and TRA known as the "Fertilizer Agencies", are CSCO, MSFT, and AAPL known as the "Technology Agencies", so why the hell are Moody's and S&P allowed to have the aura of some special government-like status bestowed upon them via the use of the word agency?
They clearly need a larger budget for this program, because the cost of rubber stamps has just been shooting through the roof lately.
Incompetence????
NO-- Try CRIMINAL NEGLIGENCE and DIRECT INVOLVEMENT in the biggest Ponzi Finance scheme of the CENTURY...and probably of all time...
Madoff Who???
We are tired of the "Incompetence" label. It doesnt begin to describe the criminal involvement going on at all levels. It is a black hole, and Americans have had it!