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SEC's $1 Billion Budget In Full Enforcement Mode: Unprecedented Clamp Down On 62 Year Old North Carolina Criminal Mastermind Couple

Submitted by Tyler Durden on 09/08/2009 12:27 -0400

With such criminal masterminds as 62 year old couples from North Caroline daring to promise "extraordinarily high" returns, why on earth would Mary Schapiro have any incentive to look for the petty thieves of trillions in taxpayer money, masking as investment bankers on Wall Street.

This just out, proudly, on the SEC's website:

SEC Obtains Asset Freeze of North Carolina Couple Orchestrating $32.5 Million Investment Scheme

FOR IMMEDIATE RELEASE

2009-194

Washington, D.C., Sept. 8, 2009 — The Securities and Exchange Commission today announced fraud charges and an asset freeze against the perpetrators of a Charlotte, N.C.-based investment scheme that bilked $32.5 million from approximately 500 investors by falsely promising extraordinarily high returns.

The SEC alleges that Sidney S. Hanson and his wife Charlotte M. Hanson solicited investors at church gatherings and in other face-to-face meetings, persuading them to cash out their retirement funds and invest in so-called private loan agreements that the Charlotte couple offered through a dozen companies they controlled (collectively, Queen Shoals Entities). Through their Web site and a widespread sales force of at least 45 "consultants," the Hansons falsely promised investors that the investment contracts they were offering would generate them yearly returns ranging from 8 to 30 percent, and that their funds would be safe in a diversified portfolio of treasury bills, precious metals, and foreign currency.

When one sees this kind of action, what else can one say, but brilliant allocation of resources and "talent."

The PR also highlights that of the $900 million budget, at least $1 million goes to enhancing the agency's photoshopping skills.

This enforcement action should be sufficient for the SEC to sleep peacfully and justify their excessive budget will into the next millennium, soon to be adjusted for hyperinflation.

h/t Lizzie

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Tue, 09/08/2009 - 12:32 | 62336 JohnKing

CNBC will do a two hour special on The "Charlotte Church Scam" with Mary Shapiro making many robust comments.

We will all sleep better at night knowing we are safe from financial predators.

Tue, 09/08/2009 - 12:35 | 62338 zeropointfield (not verified)

I am wondering if they have any idea of how ridiculous they are. They are loosing their credibility with every such event.

Tue, 09/08/2009 - 12:38 | 62346 taraxias

Again, can someone remind me who appointed Mary Shapiro to head the SEC.

Tue, 09/08/2009 - 12:42 | 62351 JohnKing

Goldman Sachs

Tue, 09/08/2009 - 12:47 | 62352 Sancho Ponzi

The problem with fraud is that sooner or later you run out of other peoples' money. Then you have to borrow money to print more money which makes the money less valuable, so you have to print more money.

Tue, 09/08/2009 - 12:46 | 62355 Anonymous

CNBC "BREAKING NEWS!"

"this is Mary Thompson of CNBC, reporting from Mayberry R.F.D., where the trial of Sidney and Charlotte Hanson is underway...we here at CNBC just spoke to prosecutors, and they confirmed they have asked the court to repossess the defendant's red 1969 Dodge Challenger with a rebel flag on the roof to help defray losses among investors..."

Tue, 09/08/2009 - 13:39 | 62424 gmrpeabody

Will that in any way have an adverse affect on the Hansons ability to use the cash for clunkers program?

Tue, 09/08/2009 - 18:53 | 62875 Problem Is

I bet there were plenty of fire arms seized in that '69 Challenger... You know guns IS currency. That should help reimburse investors.

Better than Bernanke bucks...

Tue, 09/08/2009 - 12:48 | 62358 Project Mayhem

wow i'm glad the SEC shut this operation down. millions is bigger than trillions, right?

Tue, 09/08/2009 - 13:11 | 62386 Anonymous

Absolutely, as soon as the fed starts issuing the million trillion dollar bill next year to help the US' balanced budget.

Tue, 09/08/2009 - 18:55 | 62880 Problem Is

Dimon/Blankfein > $trillions > $billions > -$13 trillion > tax payers...

Yep millions are bigger than trillions.

Tue, 09/08/2009 - 12:51 | 62363 CD

Tsk, tsk. You are failing to see the grand strategy. By capturing the real sharks in this "retail investor" arena only once they had been torpedoed by other outside factors (see: Stanford, http://www.sec.gov/litigation/complaints/2009/comp20901.pdf, Madoff, http://www.sec.gov/litigation/complaints/2008/comp-madoff121108.pdf) and crucial evidence collection has been done by other parties, the SEC is preserving its precious investigative resources to focus on the much more sinister problem of the thousands of so-called "minnows" out there. Why, if the SEC were to even attempt an investigation of major Wall Street players like primary dealers, GS or anyone in the HFT arena, all of its resources would be tied up in the litigation these firms would immediately initiate. It's much more productive to go after the "smaller" guys with no such recourse, and produces a much better batting average, too.

Tue, 09/08/2009 - 12:53 | 62364 Anonymous

crisis-f***ing-averted!

Tue, 09/08/2009 - 12:57 | 62370 Hephasteus

32.5 million dollars!!!! Why that is 2 bankers bonuses. What a HAUL.

If they adopt this system to drugs then we'll get $10 crack and 20,000 dollar drug busts. Woot.

Tue, 09/08/2009 - 12:58 | 62372 Sardonicus

I bet next they prosecute posters on Yahoo stock boards who say C is going to go lower

Tue, 09/08/2009 - 13:24 | 62380 AN0NYM0US

moved

Tue, 09/08/2009 - 13:21 | 62400 Anonymous

Read ...Devil Take the Hindmost--A History of Financial Speculation
there is a chapter on Kamikazee Capitalism

Everybody in Japan...the regulators, the politicians, the bankers, ...they were all in on it....same thing here in the states.

The little fraudsters will be pounded...the big frauds are too big to preosecute!

Tue, 09/08/2009 - 13:32 | 62414 Anonymous

I left out the financial media which was used to shape perceptions....sound familiar?

Tue, 09/08/2009 - 13:25 | 62408 TomJoad

Just who the hell do they think they are fooling with this crap?

Tue, 09/08/2009 - 16:15 | 62465 TumblingDice

Unfortunately, many people. But there are more and more critical minds wisening up.

Tue, 09/08/2009 - 13:54 | 62438 Anonymous

Shapiro is carrying on in the grand tradition of her FINRA
regulation. It ain't the size of the pelt, it's the
number of pelts!!!! Woe to all the small fry. But be
completely obsequious with all the big fish.

Tue, 09/08/2009 - 13:55 | 62439 Spiro

I feel much safer now.

Tue, 09/08/2009 - 15:24 | 62598 Hephasteus

Those grandma's. They can be pretty slick with the fancy brochurs and the here have a cookie dear. They must need more flu shots if they are still able to mastermind. A few years in prison and a little aluminum in the brain pan and they won't be so upity.

Tue, 09/08/2009 - 14:08 | 62462 Bankster T Cubed

Yes, I feel much safer now, too. LOL

Tue, 09/08/2009 - 14:10 | 62469 Anonymous

32.5 Million! Woohoo! What a bust! Nice work SEC! Thanks for keeping America safe.

Fucking keystone cops.

Tue, 09/08/2009 - 14:10 | 62470 Anonymous

Is it not comforting to wake up in the am....

Just knowing that the SEC is watching over its flock...

While waiting in line for the "Levitt" paydays ....?

Let's see....

Arthur Levitt ex SEC chief gets paid by...

SEC
Goldman
Bloomberg

Feel better now ....?

Conflicted enough for you ....?

Tue, 09/08/2009 - 14:46 | 62517 Anonymous

What's the difference between that couple and State Pension Fund managers who lost those Funds' money in recklessly risky Wall Street derivatives and real estate schemes?

Tue, 09/08/2009 - 15:04 | 62539 Anonymous

Markopolous gave the SEC Madoff, not once, but several times over the years, and they still couldn't be bothered to put together a case against him.

Therefore, I can only conclude the Hanson's themselves made several attempts to surrender. Shapiro finally got so annoyed by their repeated surrender attempts she had no choice but to take action.

Honestly, it's the only scenario that makes sense.

Tue, 09/08/2009 - 23:31 | 63145 anastos

As an industry compliance professional, the SEC makes me sick. They expect me to be out there, persecuting every advisor that sold a 65 year old an annuity as if they killed a cute puppy. They expect me to put my professional ethics and standards on the line every day and expect me to quit my job if I see malfeasance happening that management won't fix. I can literally be drummed out of the industry if they feel I wasn't discharging my duties with the utmost care. How do they expect me to take any of that seriously when this is their big press release? How do I know that, if I quit my job and call them (as they expect) that my tip will even be handled properly? Why put my ass on the line for an organization that's a blind referee in the biggest royal rumble in history?

Tue, 09/08/2009 - 23:59 | 63172 Anonymous

being too big to fail means never having to say you're sorry.

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