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SEC Kills Whistleblower Initiative Claiming Its Billion Dollar Budget Is Insufficient

Tyler Durden's picture


Just when you thought the parasitism at the SEC could no longer surprise, we find ourselves stunned yet again: "The Securities and Exchange Commission, facing the probability that resurgent congressional Republicans will cut its budget, has put on hold part of the work it has been tasked with by the Dodd-Frank financial law. The SEC will delay setting up five new offices mandated by the law, including a new office to field tips from informants about wrongdoing that was a signature accomplishment of SEC Chairman Mary Schapiro. The so-called whistleblower office won't be staffed; its functions will temporarily be carried out instead by existing enforcement staff, the SEC said on its website. A new credit rating office, an office for municipal securities and two separate offices focused on investors and women and minorities are also on hold." In other words, let's all just sing Kumbaya and pretend our markets are supervised even as Wall Street continues to funnel trillions of NPV dollars in its pockets today, while sticking future generations with what is now nearly $14 trillion in debt.

More from Dow Jones:

The SEC said the work is "being deferred due to budget uncertainty."

The Dodd-Frank law authorized a series of budget increases for the SEC that would nearly double the agency's funding over the next few years. But the money must be appropriated by Congress. With Republicans back in control of the House of Representatives next year, it looks increasingly unlikely the SEC will see the increases that have been authorized.

Federal agencies are currently operating under last year's spending levels as Republicans and Democrats remain locked in an impasse over the budget. Some Republicans have vowed to cut spending to
2008 levels.

The SEC's workload swelled with the passage of Dodd-Frank. It was tasked with writing more rules and regulations than any other federal agency to implement the law.

As a reminder the world's most corrupt, incompetent and porn-addicted organization has a budget of $1.23 billion.

Here's a thought: terminate Mary Schapiro immediately. That act alone will allow the SEC to actually regain about 120% of the credibility it has lost in the last two years. Then proceed with terminating everyone else and actually hiring grossly overpaid bureaucrats who actually know what a bid and an ask are. That way you won't even need a whistleblower office.

h/t London Dude Trader


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Thu, 12/02/2010 - 16:55 | 773129 Timmay
Timmay's picture

Redistribution of Wealth.... it is already happened. bankers discovered "bond" time travel and stole it from our future selves and our children.

The question is, how do you get the wealth back??

Thu, 12/02/2010 - 16:59 | 773143 iota
iota's picture


Thu, 12/02/2010 - 16:56 | 773132 Husk-Erzulie
Husk-Erzulie's picture

Kumbaya Bitchez  :-)

Thu, 12/02/2010 - 17:19 | 773194 midtowng
midtowng's picture

The SEC will find any excuse not to do its job. But let's not forget that the excuse was that Republicans are taking control of Congress.

Thu, 12/02/2010 - 17:21 | 773206 NotApplicable
NotApplicable's picture

They are criminals, and have no real job, other than to maintain a plausible facade of integrity.

Thu, 12/02/2010 - 16:56 | 773134 jal
jal's picture

Just as I foretold.


Gut the regulating arms and live as a free man, (heheh embezelor).



Thu, 12/02/2010 - 16:57 | 773137 jm
jm's picture

God, will they just end the whole farce and the let buyer beware!?!

Thu, 12/02/2010 - 16:58 | 773140 SpeakerFTD
SpeakerFTD's picture

The hits just keep on coming.

Is there a U.S. version of the Real IRA?

Thu, 12/02/2010 - 16:59 | 773141 gwar5
gwar5's picture

Perfect. A big green light for the next Bernie Maddoff.

Even if they weren't going to fund it, why advertise that?

They already have in place FOIA exclusions to cover up their own fraud.

At least a Federal judge just slammed the WH for overusing the FOIA.

This all really smells bad. bad. bad.

Thu, 12/02/2010 - 17:03 | 773152 notadouche
notadouche's picture

Just another built in excuse as to why the SEC "can't do it's job properly"  What a crock.  They have more than enough staff and office space to do this if they actually wanted to.  If it was actually run like a business then I suspect they could raise productivity if they cut 5-10% of it's staff and put a little fear of job loss in the remaining staff.  I don't think the government has ever heard of a little theory called the Law of Diminishing Returns.

Thu, 12/02/2010 - 17:25 | 773227 NotApplicable
NotApplicable's picture

I suspect they could raise productivity

Why not drop the euphemisms and call it what it really is, "Moar Boners!"


Thu, 12/02/2010 - 17:28 | 773248 cosmictrainwreck
cosmictrainwreck's picture

"fear of job loss" as a motivator.........what a concept!

Thu, 12/02/2010 - 18:17 | 773447 Rick64
Rick64's picture

With all the corruption and fines they could impose then it should be possible to turn a profit, but they have never done their job properly.

Thu, 12/02/2010 - 17:05 | 773155 the not so migh...
the not so mighty maximiza's picture

Definitly these all are signs of a strong economy and strong goverment.

Thu, 12/02/2010 - 17:09 | 773165 digalert
digalert's picture

ZH will just have to continue doing the work of the SEC.

Thu, 12/02/2010 - 17:09 | 773166 bugs_
bugs_'s picture

How big a check are we going to have to write Markopolos?

Naw lets kill the program.

Thu, 12/02/2010 - 17:10 | 773168 Kat
Kat's picture

You really believe that the SEC is in the business of policing anyone who is politically connected?  Oh, if it weren't so said it would be cute how you believe in fairytails.

The SEC is in the business of creating barriers to entry for large, insider firms and protecting them so they can rip you off.  The more powerful the SEC is, the better it is at that job.

Thu, 12/02/2010 - 17:19 | 773201 NotApplicable
NotApplicable's picture

Yep, this is all merely something for the polticos to fight over while pretending to represent idealogical interests. Just more red meat for the "Do Something!" herd that believes it best to be enslaved.

The only thing ever really done by bureaucrats, is to break things in order to create a further mandate to fix them.

Thu, 12/02/2010 - 17:10 | 773169 max2205
max2205's picture

Budget for more porn surf'in PC's is tight man...don't you know...hey our fucking pay is frozen.  just try to get ANY work out of us now bitches!!

Thu, 12/02/2010 - 23:13 | 774134 The Rock
The Rock's picture

I'm jealous. I wish I was paid $200k per year to watch the boobtube.

Thu, 12/02/2010 - 17:11 | 773171 trav7777
trav7777's picture

an office for "women and minorities"  WTF does that have to do with securities?!?! 

Diversity is the downfall...what a fucking utterly SILLY thing to be worried about at a time like this, fucking women and minorities lol

Fri, 12/03/2010 - 04:55 | 774620 FreedomGuy
FreedomGuy's picture

Don't forget the new head of NASA said one of their goals was to make Muslims proud of their contributions to science. This is the modern liberal nonsense we pay for. Lunacy reigns.

Thu, 12/02/2010 - 17:12 | 773173 outamyeffinway
outamyeffinway's picture

Fuck the SEC. Save the tax payer money. We'ge got Wikileak bitches!!

Thu, 12/02/2010 - 17:19 | 773195 sgt_doom
sgt_doom's picture

Roger that!

And now to put everything in proper perspective, the award-winning vids of the 21st Century.

[Swedish Prosecution Authority on Wikileaks’ warrant: Weird]!

[Chris Hedges]

[Russ Baker v. George Bush: Family of Secrets]

[The Federal Reserve]

[Media and Propaganda]

[Must read economics paper which clarifies where the economy disappeared to:]

Thu, 12/02/2010 - 17:15 | 773181 ReallySparky
ReallySparky's picture

It's really a work stopage based upon Obama's pay freeze.

Thu, 12/02/2010 - 17:26 | 773238 NotApplicable
NotApplicable's picture

We can only hope for the same result from all federal departments.

Thu, 12/02/2010 - 17:19 | 773196 economessed
economessed's picture

When the government refuses to uphold the social contract (i.e. a nation of laws), they should expect the citizenry to act out as if it were 5:00 a.m. on Friday, November 26 outside the doors of a Target store.  They won't be polite or considerate -- they want what they came for -- an end to the injustice.

I'll remind the SEC that they are public servants.  As such, you harbor no right to opt-out of your sworn duties.  Using the SEC's own logic, I'll stop paying a portion of my Federal Income Taxes.  Every parasite needs a good host, and the extortion works both ways.

Thu, 12/02/2010 - 17:40 | 773301 NotApplicable
NotApplicable's picture

Look, there is no such thing as a "public servant."

Each and every individual on the planet serves their own self interest first, as it should be. The problem arises when positions of power are created that conceal self-interest in a veil of public interest (which is a wholly non-existent fiction used to implement the equally non-existent "sacrificing the individual for the greater good").

Your so-called social contract was destroyed by Lincoln, then Teddy R. and Wilson, with FDR delivering the finishing blow. The US Constitution is a myth, fully usurped by the Coup of 1913.

Thu, 12/02/2010 - 18:16 | 773445 calltoaccount
calltoaccount's picture

excerpted passim from: 

"...the crisis now decapitating the world’s economies didn’t have to happen– would not in fact have happened if those charged with protecting the financial system and the investing public— namely Congress in general and the Securities and Exchange Commission in particular— had simply done their jobs, upheld their oaths, and seen to the enforcement of laws already on the books, instead of consistently looking the other way; or worse still, directly aiding their campaign contributors, benefactors, patrons, employers and future employers by contemptible acts of public disdain such as repealing Glass Steagel, allowing Reg Sho’s grandfathering of billions in counterfeit shares, scuttling the systemic market protections provided by the uptick rule, and encouraging $62 Trillion in credit default swaps, insurance contracts in all but name, that would be void as against public policy for lack of “insurable interests” if called by their rightful name.

In eschewing its once noble calling to speak truth to power as the Fourth Estate, today’s captured corporate media has become our 21st century fifth column, abusing the public trust from within by either failing to investigate and accurately report evidence of massive unlawful conduct, or on the rare occasions it does, by sugarcoating criminal deeds with words more aptly suited to boyish pranks– shenanigans, hijinx,  mischiefmonkeyshines and foolishess– rather than call a spade a spade and honestly label them the acts of consummate lying, cheating and stealing they are.

While a rare few in Congress— notably Senators Grassley (IA), Specter (PA), and Sanders (VT)— seem to comprehend just how crooked, unfair and untrustworthy our markets and their regulators have become, one wonders how those who’ve charted the SEC’s course over the past 8 years could have any doubts about it!   As the agency explicitly created to first and foremost, uphold and protect the integrity of the markets and the best interests of the investing public, they have, with unceasing devotion, in the eyes of most informed observers, done the exact opposite– enabling wrongdoers to operate with almost total impunity.  A bold faced license to steal."


Thu, 12/02/2010 - 17:24 | 773222 Ludwig Von Miso Soup
Ludwig Von Miso Soup's picture


Can we hire a blonde to throw a molotov cocktail at the FRBNY? Let's get this party started.

Thu, 12/02/2010 - 17:25 | 773233 mark mchugh
mark mchugh's picture

Here's a few fun facts:

  1. Dodd-Frank nullified the "old" SEC's bounty program, meaning they'll be stiffing anyone who provided info on the 2008 meltdown.
  2. The SEC new whistleblower rules exclude information "obtained from publicly available sources."  Meaning "fuck off, peasants!"
  3. Mary Schapiro is the regulator most responsible for Bernie Madoff.  One can only conclude that she was appointed specifically for her inability to recognize a Ponzi scheme.

And the sad part is, they're sitting around in Washington, scratching their heads wondering why the retail investors left.

Thu, 12/02/2010 - 20:27 | 773789 FreeStateYank
FreeStateYank's picture

Shapiro is a tool of the first order. It is very disappointing to see the one of the few members of my gender appointed to such a lofty position revealed as unworthy of the honor. Uggh. Don't get me started on the elite lynching of Brooksley Bourne.

Thu, 12/02/2010 - 17:26 | 773235 whaletail
whaletail's picture

Implied admission: we think the number of potentially meritorious cases the SEC will be tasked to investigate by whistleblower tips will be too numerous for our anticipated budget that we won't even try to comply with the law except by an insignificant gesture of having our existing staff work the cases. 


[Madoff grinds his teeth, knowing if he had just been a LITTLE more sly, this would have all gone away under the current Administration...]

Thu, 12/02/2010 - 17:31 | 773263 cosmictrainwreck
cosmictrainwreck's picture

+10 In spite of gross inefficency, if they did get lean & mean (let's pretend), they would in fact be hard-pressed to pursue all the "meritorious" cases

Thu, 12/02/2010 - 17:48 | 773335 Common_Cents22
Common_Cents22's picture

Did the SEC really take down Madoff? 


NO, margin calls did.  A run on his fund did.

The SEC merely showed up to clean up the bodies.

Thu, 12/02/2010 - 17:54 | 773359 whaletail
whaletail's picture

Yup, there's one in every bunch.

Thu, 12/02/2010 - 17:32 | 773268 MarketTruth
MarketTruth's picture

The so-called whistleblower office won't be staffed; its functions will temporarily be carried out instead by existing enforcement staff...

What enforcement staff??? They have been getting great tips/data/info for years from various sources (don't ask me how i know) and they have done NOTHING, zinch, nada. The SEC/CFTC are a joke, or perhaps just working for those in power versus what is the law. So maybe they are working hard, the question is who are they working for?

Thu, 12/02/2010 - 17:34 | 773275 Shameful
Shameful's picture

What I'm waiting for is the headline

SEC Kills Whistleblowers

In a move to restore trust and faith to the market Mary Schapiro has signed off on a program to liquidate all whistleblowers.  "The markets don't need any more loss of confidence and facts just sent into the marketplace of ideas are highly damaging to market mechanism" says Schapiro.  The location of the liquidation center remains undisclosed but inside sources have suggest they are held off shore for legal reasons.  Harry Markopolos could not be reached for comment and is reported as missing.

Thu, 12/02/2010 - 17:52 | 773348 whaletail
whaletail's picture

You've got it ALL wrong.  There is NO way this provision would ever be portrayed as openly and honestly as you have so portrayed here, Shameful. It would be sold as a departmental budget cut:  in order not to spend money, whistleblowers that call the "tip" line would be handled with extreme prejudice.  GS, of course, would front run the liquidation.  After the identification of the whistleblower, GS would obtain life insurance policies through relatives of these whistleblowers through a cleverly designed insurance proceeds assignment package.


Thu, 12/02/2010 - 17:43 | 773309 carbonmutant
carbonmutant's picture

This bill was never about whistleblowers.

That was just the marketing to guarantee a $Billion of SEC pork so Mary could hire some more of her "Special Friends."


Thu, 12/02/2010 - 17:45 | 773320 Cdad
Cdad's picture

Fire Mary Schapiro?  What?  She is still taking comments from the criminal syndicate known as Wall Street regarding which laws the SEC should enforce or ignore so that revenue streams, and hence bonus flows to syndicate banks, are not altered or reduced in any way. 

Oh, and she is apparently still working on a more plausible answer to what happened during the flash crash, since her first "cover up" story did not exactly inspire public confidence, that Flash Crash causing 30 consecutive weeks of equity outflows...flows out of Average Joe's 401 k account.

She has unfinished business.  And I think you guys just need to be more patient with her and the poor underfunded federal employees that, on average, only make twice as much as any of us [those of us who still have jobs because of the negligence of bankers and SEC agents].  Oh.  Wait a minute....

Thu, 12/02/2010 - 17:47 | 773331 Lndmvr
Lndmvr's picture

Just when ya thought ya seen/heard it all.

Thu, 12/02/2010 - 17:52 | 773352 whaletail
whaletail's picture

Who Watches The Watchmen [when the Watchmen are watching internet porn]?

Thu, 12/02/2010 - 18:06 | 773403 Bob
Bob's picture

See no evil, hear no evil, fuckers--just keep pretending you're doing your jobs. 

And get ready to hang when the mobs overwhelm the barricades. 

Thu, 12/02/2010 - 18:26 | 773486 barroter
barroter's picture

Typical.  A rich hedge fund owner can make off with untold amounts of money, ruining how many lives?  While some kid who robs a car radio gets plenty of cops and tax $ to chase his ass down.

Trust the business world suckers! They'll always have YOUR best interests at heart.

Thu, 12/02/2010 - 18:29 | 773498 Black Friday
Black Friday's picture

What's the problem, here?

I bet I can get 100 volunteers to regulate this monster more efficiently using a free online blogging service as a base of operations.

Thu, 12/02/2010 - 18:34 | 773515 mark mchugh
mark mchugh's picture

I'm in.

Thu, 12/02/2010 - 18:40 | 773534 Black Friday
Black Friday's picture


Thu, 12/02/2010 - 18:31 | 773507 tony bonn
tony bonn's picture

mary schapiro is a slut....there isn't a crime or deceit in the world which she would prosecute unless it was against someone who revealed the color tone of her hair dye....and total and complete bitch.

Thu, 12/02/2010 - 20:22 | 773778 karzai_luver
karzai_luver's picture

I have it!

Maybe we could set up a pay for play porno site and use the SEC clowns as the stars.

They have plenty of practice and we could use the funding to get the blowers whistling.

Thu, 12/02/2010 - 18:39 | 773532 jmc8888
jmc8888's picture

That legislation has more holes than Dodd's brain, and that's ALOT.

1st of many gridlock fuckups.  The only succesful collaborations in the upcoming session will be of the fascist type. 

Who would've thought a victory garden is now public enemy #1 from DHS.  Can we get anymore away from the American ideal and the FDR mentality than this?

At this point we have as many discarded cornerstornes to build the pyramids of GIZA. 

They could of at least found one room o' porn and shut it down and put all five in that.  At least that would of been an horrible, but honest try. 

Maybe if we could form complaints in the visual style of a gloryhole they'd understand better? Kill two birds with one stone.  I mean at least then you wouldn't have to prioritize a bit and find a way to fit five rooms and a few staff into a 1.23b budget because these cornerstone issue aren't what's supposed to be the driving force of the SEC and the type of 'corporate' culture they would attempt to export to form such a well known motus operandi for all of Wall Street and the American public to see. 

Instead they need to keep doing what isn't working, and hold off on this other stuff.  Thus in reverse, we all see, Wall Street's M.O. is surely alive and well at the incorruptable SEC and it's dear leader Mary Schapiro (and Frank/Dodd bill has always been a fucking joke).


Thu, 12/02/2010 - 19:34 | 773689 Hephasteus
Hephasteus's picture

I don't stop at stoplights because my brakepad budget is insufficient.

Thu, 12/02/2010 - 20:58 | 773852 FreedomGuy
FreedomGuy's picture

Claim that you are being "green"/energy efficient. Stopping at empty intersections and streets is the top waste of fuel in the Western world.

Thu, 12/02/2010 - 20:55 | 773840 FreedomGuy
FreedomGuy's picture

I am leery of whistleblower laws, myself. I don't know how they work in the SEC, but in my industry with myriad regulations anyone can make a buck or million by ratting out his/her company on some minor regulatory infraction. There are so many laws these days I seriously doubt anyone operates without violating something. Plus, many are discretionary and it depends on who's judging the situation. Like corrupt speeding tickets it become profitable for the state to prosecute all manor of infraction. Put it this way, if they promised your kids a free trip to Disneyworld how many would rat you out for not wearing seatbelts?

Personally, I believe our government is in a wholesale moral meltdown. It's rapid and pervasive and it will be the excuse for a totalitarian society. It's really a great ruse. Government corrupts society then take power to un-corrupt it, lol! We will fall for it.

Thu, 12/02/2010 - 21:05 | 773867 prophet
prophet's picture

Anything they can do we can do better.  A few good lawyers and some investigative journalists.  Lets get busy.  Yes we do!

A lot of house cleaning would get done with $1B.

Thu, 12/02/2010 - 21:36 | 773913 ZackLo
ZackLo's picture

Fire all of the sec and set up just an office for whistleblowers....and allocate the whole budget to that...all other forms of regulation up to this point seem to lead to only regulatory capture....

Thu, 12/02/2010 - 21:54 | 773946 Kina
Kina's picture

Why do they or any of the other regulatory bodies bother.


Almost nobody believes they are there to do anything other than facilitate Corporate America's corruption of markets and to smother all and every complaint.


And they have done their job well. Corruption by corporate America is now systemic and total and whistleblowers none existent. Well done SEC you achieved your verbally given charter to perfection.

The CFTC on the other hand failed in their hit job on the Mcguire whistleblower. Too late for a mulligans for them.


Thu, 12/02/2010 - 21:55 | 773948 Kina
Kina's picture

More power to Wikileaks.

Fri, 12/03/2010 - 09:17 | 774752 ibjamming
ibjamming's picture

Do they think we're fucking stupid?  They must...  Who in their right mind would believe a "Government whistleblower program" would be honest?  OK...I get it...I come to you as a whistleblower and report some bigtie evaluate it and decide what to do?!?  Whether to cover it up or not?  I don't think so Tim...  I think WikiLeaks and others like it will do just fine!

Fri, 12/03/2010 - 11:59 | 775479 MrBoompi
MrBoompi's picture

I guess I have to agree when we doubt the honesty of a government whistleblower program, but now the government is pretty much admitting it would be nothing more than a sham and a waste of money.

--- The US government does not control Wall Street or the banking cartel.  The global financial elites control them.  Anyone who portrays the struggle as one between Democrats and Republicans or Conservatives and Liberals is totally missing the reality of the situation. 

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