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SEC's Director Of Enforcement Jokes About HFT, Front Running, Algos, Calculus, A Black Box and Other... Stuff
Fragment from a speech given by Robert Khuzami, Director, Division of Enforcement at the U.S. Securities And Exchange Commission.
Speech by SEC Staff:
Remarks Before the New York City Bar: My First 100 Days as Director of Enforcement
New York, New York
August 5, 2009
I. Introduction
Thank you, Pat, for that kind introduction. It's great to be back in New York. And I am grateful to the New York City Bar for providing me with this opportunity to talk about the Enforcement Division. There is lots to talk about.
As I was thinking about this speech, a colleague mentioned that I had been with the Commission approximately 100 days. Aside from making me wonder why my colleagues are counting, it caused me to pause and reflect — how did my 100-day accomplishments compare with those of others? That often over-weighted yardstick of accomplishment — did I measure up?
Franklin Roosevelt set the bar pretty high. In his first 100 days in office, he reopened failed banks under Treasury supervision; he established the FDIC; and he created extensive farm subsidy and federal jobs programs.
More recently, President Obama has also achieved impressive accomplishments in his first 100 days. First off, President Obama appointed a brilliant, experienced, and transformative leader of the SEC … and I'm not just saying that because Chairman Schapiro might read this speech. After that, President Obama passed the economic stimulus plan, funded stem cell research, took on the health care crisis and crafted a plan to withdraw troops from Iraq.
All that being said, I'm pretty proud of my own 100-day accomplishments. So how have things changed? Before I joined the Division in March, the Dow was struggling around 6500 points. Now the Dow is over 9200. So am I really responsible for a 41% increase in the Dow? I am, and I'd explain it, but it's very complicated. It involves algorithms, and calculus, and a black box and other … stuff. Now, when I ran this speech by my wife, she looked (kind of like some of you out there) a little incredulous. She said, "you're not claiming credit for the stock market, are you? While you're at it, are you also taking credit for the mild hurricane season or the sharp decrease in lethal shark attacks world-wide." Well I am, and I'd explain it, but it's very complicated. It involves algorithms, and calculus, and a black box and other … stuff.
Jokes aside, the Enforcement Division has accomplished much in the 100 days. This reflects a dedicated and talented staff as well as a reinvigoration of our core mission of investor protection. Before I describe some of these accomplishments, I need to make an important disclaimer — my views are my own and do not necessarily reflect the views of the Securities and Exchange Commission or any member of the Commission staff.
and much more, although Zero Hedge stopped reading at this point.
h/t Matt
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He's f*&%ing hysterical........ now it can be the Barry, Benny, Timmy, and Robby "Manipulated Stock Market" Variety Show... wonder if they will have any dance numbers or just lame skits... maybe their guest host can be Lloyd Blankfein starring in a musical number called "It's Getting Less Bad Out There, Until China Stops Buying U.S.Treasuries, Then Watch How Quickly We Can Tank the Equity Markets".
Hey, Al Gore invented the internet.
Ol' Al also invented the Al-Gore-ithm. Talented Fellow!
LMAO
And he made up Global Warming.
show us the birth certificate al gore!!!
If it wasn't for Al Gore you would still think AOL was the internet. That might be going too far but it is possible to imagine the backbone being privatized to some extent and certainly the critical mass would have come much later.
How smart was Gore. He understood this thing 4 years before Bill Gates.
Did he find Rush Limbaugh's stash or something? It sure sounds like it.
This was just a government mix up on the paperwork. He applied for the comic relief job at the US Treasury, the papers were mixed up and the SEC called - it just so happens they were also looking for an enforcement director that would be "a joke".
Khuzami is a fucking asshole. Too bad nobody has anything on him.
Somebody has something on everybody..
Just think of all the interesting things you know nothing about today that you might learn something about at some point in the future.
paul,
true, true. just think of all the interesting things i might already know but for which i lack empirical/damning evidence. i think thomas jefferson has two quotes that apply.
"All tyranny needs to gain a foothold is for people of good conscience to remain silent."
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."
I'll follow with my quote of the day:
“Freedom of the press is guaranteed only to those who own one,”
A.J. Liebling
Media 2.0 is our gift to the Gerbervores that have yet to wake up.
BTW, this site provides a 411 nexus for those that can work around the strictures. I would ask that you consider using it. I am sure that you are a someone that knows something that others can piece together into a clearer pic.
Best wishes.
paul,
the tips? without empirical evidence, tough to make a strong, lasting argument. and, unfortunately, like everybody else can attempt to lead a horse to water but i can't make the damn thing drink. it drives me batty to be honest. hence, my use of the first of TJ's quotes that i posted.
A successful intel or counter-intel operation is all about collecting 411. Let the folks at the home office sort it out. Remember, this thing called ZH is about all of us and what we can contribute. It is good to know you fully appreciate the difference between an idea you are wed to and what you have witnessed in passing. I rather suspect that there are others that share your frame of reference.
the info was forwarded. i maintain the faith, particularly after reading this post from tyler this evening. i just wish i was the source, so thoroughly disgusted at this point that i would have NO problem blowing the whistle. again, i can attempt to lead the horse to water, but i can't make the damn thing drink. breath anon, recite mantra, keep the faith. repeat.
i hope TD presents that info to us ... oh, and thanks man ..
no problem. you can never have too many foot soldiers.
Yep. We are a combined arms force that understands the deep strike and the concept of a "go" strategy.
i suspect many here have seen/read/heard about the following. for those who haven't, you might want to sit down before reading the 27 pages at the URL below.
http://solari.com/assets/PDFs/myth_of_the_rule_of_law.pdf
"One of the mechanisms used to provide slush fund monies is with
mortgage securities that are created in whole or in part with fraudulent
mortgages. Churning mortgage defaults back through HUD
supports debt service."
~Page 27 of the pdf.
Well, looks like the last 10 years has more than replenished the slush fund if this was true.
I'll throw in this google news timeline. Marvel at the reluctance to countenance regulating 3 x US GDP in derivatives. Marvel at the BB shouting 'epic fraud' and being ignored.
http://newstimeline.googlelabs.com?date=1999-01-01&zoom=2&subs=anews.bro...
Wanted: Whistle Blowers. We Believe you
Especially when you may doubt yourself and what you have borne witness to.
Keep the faith and remain loyal to the institution of free markets.
Two guys from gs at treasury can do it, one holds his head in the water and the other one sucks on his ass. Frank
Wait a few minutes
That's so fucking marvelous. These pinheads in Washington are so aloof. The world is going to wake their stupid asses up when the next bomb hits. The cavalier arrogance of the bastards is maddening. They haven't fixed a fucking thing.
I'm glad you think your first fucking 100 days is such a smashing success, you worthless piece of shit. The taxpayers are getting ass-raped blind by the Wall Street bloodsuckers you're supposed to be watching and you're cracking fucking jokes about it? Guess what? Welcome to the list -- The Top Twenty Assholes To Be Drawn-and-Quartered After the Revolution. Fuck us all while you can, you little bitch. Dream about that Goldman Sachs job you're gunning for. We're watching.
MORE BLOOD!!! MORE BLOOD!!! MORE BLOOD!!!
http://www.econocataclysm.com/1m-baseball-bats/
I'm down, yo. A million baseball bats on the Mall in DC? Try TWENTY-FIVE MILLION, that many people are out of work and the number is only growing because of these pricks and their "funny jokes". Joke's gonna be on THEM, though. Bankrupt government equals no cops to scare us into not showing up for this thing...
what a piece of shit. instead of giving speeches that asshole should be doing his fucking job.
Actually, he should be euthanized this evening.
Naawww...
He is one of those folks Jim Rogers is planing on using as ag labor...
he IS doing his fucking job, unfortuantely his REAL job isn't what we're made to think it is.
His "job" is to run interference for these frontrunning assholes on behalf of the politicians they put into power while sniping off the occasional obvious case in a messy, public manner to make it look like the SEC is actually helping to stabilize the markets, in other words doing the job we THINK it's supposed to do. It's just a fucking con game, that's all, the part that convinces you the market is stable.
But it's mainly directed at Americans which is funny, because it's the Chinese they have to convince of the shit and they ain't buying it anymore...
Only 2 bank faiilures today! Hurrah! Green shoots!
http://www.fdic.gov/
It's only 4:40 MDT, 3:40 PDT.
There is plenty of time.
"Working with the New York State Attorney General, we pursued placement agents and others for allegedly extracting kickbacks from investment management firms seeking to manage the assets of New York's largest pension fund, the New York State Common Retirement Fund."
Apparently, Rattner got away just in time. Case closed.
worthless piece of shit this guy is ... hey man if you are reading this i hope your wife caughts herpes from her meth dealer and you get it while you ass fuck her ... goddamn piece of SEC shit ..
If you keep holding back your emotions, its going to lead to hypertension and ulcers.
Just let go and tell us what you really think.
CB- Don't worry. His car is going to stall in the center lane of a busy freeway during rush hour. After all, we do supply the folks that fix his car...
ditto ... but this shit needs to go viral, i mean his speech, is there a recorded video of the speech so we put it on youtube ...
No doubt!
BTW, I am sure you have noticed that these folks are doing a marvelous job of making our job easier. They just cannot help themselves. Like horizontal pillow talk. Time to go fishing in the CEE barely legal community.
you really have to wonder if their arrogance and total lack of social sensitivity is on purpose; to provoke some crazy sob who lost most of his money in the market to do something, so they can blame the blogs, and put a Cyber Czar as the superior emperor of tEh Int3rn3tz and monitor us .. would not surprise me ... oh and here's a book recommendation if you want something to read that suits this web-site ... http://www.scribd.com/doc/15785269/The-Poker-Face-of-Wall-Street
I see it like this. Sooner or later these folks will try and tell us something along the lines expressed in this letter.
http://www.brotherswar.com/Fredericksburg-15.htm
Thanks for the excellent read.
Honey,listen to my speech..the four "S's" as they will come to be known:
First, to be as strategic as possible. ......
Second, to be as swift as possible......
Third, to be as smart as possible. ....
And last, to be as successful as possible......
.....
Well, yes.. smart is really built in to the other three, but in some of the books I have read you need a 4 point plan.....That's how you get maximum effect...
....
How does that work...well, it's one more than three..
"Jokes aside," - then please step aside.
"Somebody has something on everybody.."
ORLANDO, Fla. (AP) - Republican Sen. Mel Martinez of Florida said Friday he will step down from the Senate before his term ends, adding fresh intrigue over who will fill the seat.
Maybe someone caught him screwing a goat.
LOL
Before or after it was buried for BBQ?
The US and the so called 'stock' market is a pile of "£%^ in that case.
It is a laughing stock market run by front running crims that get away with massive losses that rape hardworking citizens of the hard earned savings that now get zero interest for being prudent while they peddle it for many times that amount just like they have always done.
Time for
Vive la US Révolution!
He invented Dark Stanleys, Goldman Sach's preferred claw hammer for bashing ...
Well, don't you get it.. the joke is on you, me, the public. His speech is a reflection of his body of work---comedy. Look at what this priest says who worked at GE during the 80's says about the accounting..
"I called Father Martin, now an editor at America magazine, a Jesuit publication, and asked him to read the S.E.C. complaint and call me back. He did.
“Little of this is surprising,” he said.
“I was sometimes asked to squirrel away ‘excess earnings’ in fake accounts with made-up names, to be used when earnings were down in later months,” he said. One such account was called “Plug.”
http://tinyurl.com/lvwh6z
this fraud went further back than you/we know.....but whats the penalty? 50 million...chump change when you consider the billions taken down through the whole scheme...forget about justice...
Fundamental problem. People in position of regulation are not the brightest bulb. They get there by socializing and sucking ass. Idiocracy
Since 2004, Mr. Khuzami, 52, has been General Counsel for the Americas at Deutsche Bank. In that role, he has supervised more than 100 lawyers supporting the bank's various businesses in the Americas, and has overseen Americas-based litigation and regulatory enforcement actions. From 2002 to 2004, he served as Global Head of Litigation and Regulatory Investigations for the bank.
Of course this a$$hole is covering for any "bank"
Dooche bank is one of the collaborators in HFT. Honey, its just 'black box and stuff'. Fucktard, find what's inside the blackbox that's your job arsehole.
he doesn't want/need to i suspect. he might even already know what's in there.
I've said it before and I'll say it again.
"it's very complicated" is the refuge of all who must explain their fuckups to a very upset populace. Granted in this context this jagoff was being facetious, but in my book this is enough to get him on my shitlist.
Before anyone pops the Dom and takes credit for this rally. Here are some headlines from the last credit based recession. I do beleive there was some premature euphoria. I personaly find the Jan 21, 1930 quote particularly fascinating.
September 1929
“There is no cause to worry. The high tide of prosperity will continue.”
- Andrew W. Mellon, Secretary of the Treasury.
October 14, 1929
“Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board.”
– New York Times
October 29 1929
Stock market crash
December 5, 1929
“The Government’s business is in sound condition.”
– Andrew W. Mellon, Secretary of the Treasury
December 28, 1929
“Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression.”
– Associated Press dispatch.
January 13, 1930
“Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today.”
– News item.
January 21, 1930
“Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction.”
– News dispatch from Washington.
January 24, 1930
“Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast.”
– New York Herald Tribune.
March 8, 1930
“President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.”
– Washington dispatch.
May 1, 1930
“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.”
– President Hoover
June 29, 1930
“The worst is over without a doubt.”
– James J. Davis, Secretary of Labor.
August 29, 1930
“American labor may now look to the future with confidence.”
– James J. Davis, Secretary of Labor.
September 12, 1930
“We have hit bottom and are on the upswing.”
– James J. Davis, Secretary of Labor.
October 16, 1930
“Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment.”
– Charles M. Schwab.
October 20, 1930
“President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President’s special committee on unemployment.”
– Washington dispatch.
October 21, 1930
“President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter.”
– Washington dispatch.
November 1930
“I see no reason why 1931 should not be an extremely good year.”
– Alfred P. Sloan, Jr., General Motors Co.
January 20, 1931
“The country is not in good condition.”
– Calvin Coolidge.
June 9, 1931
“The depression has ended.”
– Dr. Julius Klein, Assistant Secretary of Commerce.
August 12, 1931
“Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work.”
– The Nation.
The following is a nice visual of the charts with some related quotes-
http://www.gold-eagle.com/editorials_01/seymour062001.html
In truth those who ignore history are doomed to repeat it
So it looks like we are in between January 21, 1930 (Green Shoots) and January 24, 1930 (Obama says "worst may be behind us" AP)...so based on this we have another 8 or 9 months before labor is on the upswing and 1.5 years before the government actually tells us we are in a depression (HAHA).
When you hear them talking about the ingenuity of the American people, you know you're f*cked.
Why not talk about what really counts, like the best weapons, biggest army, great strategic position, least regulated and most connected banking system etc.?
We know where the bodies are buried. We buried them.
Thanks for the delivery - excellent.
I once interviewed with a few attorneys at the San Francisco SEC for a clerkship. They were clueless and did not appreciate my politics.
"It involves algorithms, and calculus, and a black box and other … stuff."
Confidence men enjoy sticking the truth in the face of their marks. Their sociopathy and overall sense of superiority -- intellectual, charisma, and otherwise -- is the root cause of their grandiosity (and often the cause of their downfall).
Wrapping the truth in a skewed context, in this case sarcasm, is a preferred method.
"How did I make my fortune? I robbed the taxpayers obviously. Hahaha. No, really, I...."
bingo!
yup, bingo
Whats funniest is nobody is even really talking about this. Not enough chatter to warrant 'jokes.' If he was joking he should be joking about twitter or something.
Khuzami won't be laughing come fall!
The $1 QUADRILLION Derivatives Time Bomb
http://theautomaticearth.blogspot.com/
Waterdog
I do not blame you for not reading anymore. I am not sure I want to read the rest. I have experience in regulatory auditing. 20 years worth at the front line. I am so mad right now I can't think. I think this will make a good piece for me to write.
THe solution is simple: PULL YOUR MONEY OUT OF THE MARKET AND OUT OF BIG BANKS.
There. Problem solved.
/buy PUTS first, maybe.
Can we see if he gets a bonus from this.
This is my favorite passage from the text of the speech (from section II.):
"It is imperative that we convey to all defendants in SEC actions that we are prepared to go to trial and we will win"
Go get 'em Bob. You show 'em with that $33 million/no admission of wrongdoing settlement with BAC over the ML acquisition.
damn, i left something out. go get 'em, you fuckwad.
His comments are inappropriate and absurd of course.... But the one thing the SEC has done is help the short squeeze emerge as an ongoing theme. Just ask anyone on a stock loan desk what's involved in borrowing AIG for instance. If you cant borrow it, you cant short it. And if you've shorted it without borrowing it (not that anyone would do that.......), you're probably considering closing out your position don't you think. The only question I have for these crackerjacks is....If you've been holding this in your back pocket, and they had to be to some degree.. see deep capture, why wait till now to play your ace and ramp this market. Might have stopped this market in its collective tracks as everyone was shorting financials last year.... They had to know this was going on, why the wait?
deep capture is a lie. the only difference between patrick byrne and the average pump and dumper is he's on nasdaq. you can't cover up running a shitty company by blaming it on shorts, patrick!
shouldn't you be drunk, jacked up on coke and banging a teenage hooker by now? it is friday night after all.
the naked short story was made up by fraudsters like patrick byrne, james davidson of the NTU (took out full page ads about it back in 2005), and bill bonner of agora inc. to give the penny stockers on the message boards something to "rally" against.
naked shorting alone doesn't exist as patrick suggests it does. the mafia is on his side, and he probably paid a pretty high "tax" to the mafia to do what he did. otherwise they would have gave him problems.
you believe what you want to and i will believe what i want to. deal?
hedge funds aren't the enemy. they play both sides and simply provide nearly immediate price arbitration. the market crashed because cdos are worthless, because the american consumer is worthless.
if hedgefunds were out there naked shorting to infinity without hedging, volkswagen would have gone up a lot higher than 1000.
Weiss is that you?
Bagley is that you?
Where's Marla. I'm ready for Marla.
SEC Staff: Majority of male lawyers are Homosexuals and the women are just ugly skanks.
Marla,
the more i use this wonderful tool i'm using right now the more i learn. i am guessing you already knew the info below but, if not, anything i can do to help.
it appears that not only are unfair labor practices complaints possibly subject to the FOIA but FOIA may not need be invoked as per the following (from the FLRA handbook):
FLRA COMPONENTS, ADDRESSES, LOCATION OF FLRA READING ROOM, AND DESCRIPTION OF INFORMATION ROUTINELY MADE PUBLICLY AVAILABLE
TYPES AND CATEGORIES OF INFORMATION AVAILABLE
Title: Unfair Labor Practice Case Files
These files contain the documentation of cases that have reached the Authority after a hearing before an Administrative Law Judge (ALJ), or that are received from Regional Offices for decision based on a stipulation of facts.
Everything is going according to plan except the credibility part:
Cox To Make A Biz-Friendly SEC
"SEC policy will become more pro-business and less investor-friendly
http://tinyurl.com/lrnyz3
Nothing has changed..nothing will...that's why its a joke..he knows it....we don't.
Speak for yourself, When Mary Madoff Shapiro was appointed, EVERYBODY knew she would continue her SIA agenda...
http://www.rrbdlaw.com/2002/Q3/NASDPR/prcmtelist.htm
Tyler when I first read this I thought you were joking.
Now I am actually pissed. What a fucking disgrace.
PM: It's supposed to be broken...you don't bite the hand that feeds your Master. The Bitch who let Madoff run his Ponzi left and joined a white shoe lawfirm who opened a DC office representing white collar criminals for serious $$$$....No conflict, just business as usual...
Yeah, Goldman's frontrunning assholes are going to be taking Christmas in the Bahamas on the Taxpayer's dime, meanwhile we'll be doing Christmas eating cold beans from a can in a tent city... IF WE'RE LUCKY.
It's all a big funny joke to these people, hoo hoo ha ha ha.
Kill them. Kill them all.
more blood, more blood, more blood !!!!!!!
Soon, very soon... I can smell it already...
The Black Freighter approaches the SEC building, waiting to collect the only booty it really cared about...
THIS MAN'S ETERNAL SOUL!!!
MUAHAHAHAHA!!!
Wait... This is for real? Why isn't this on the front page of the NY Times, and the WSJ???? ...This is TREMENDOUS! The major media had better pick this up if they want to hang on to any last shreds of legitimacy. Wow. Wow. Wow.
Thanks TD for going where others who are too blind, bumbling or bought won't.
appears real to me. link to full text of speech (also posted here by Mr. Durden) is in paragraph 5 of the article below.
http://amlawdaily.typepad.com/amlawdaily/2009/08/meet-robert-khuzami-you...
Who let The Tool out of the Toolbox?
Slide
Funny metrics he has:
The more the merrier it seems. However, do I miss something here? Yes indeed. How many of the indictments were won? That would be the all important metric for the quality of work, IMO.
Interesting that this metric does not even enter his mind, simply not important to him.
He should have gone further back in time with GE.
Inside G.E., a Little Bit of Enron
By FLOYD NORRIS
Published: August 6, 2009
http://tinyurl.com/lvwh6z
As for General Electric, don't believe the hype that the SEC was the victor. As is often the case, the lawyers were the real winners.
After a four-year investigation, the SEC found that GE had used improper accounting methods to boost its earnings by more than $1 billion during a two-year period. With this week's settlement, GE puts the matter behind it without admitting guilt.
The Small Price to Pay for Financial Fraud
http://tinyurl.com/nfv3nu
I think I'll just re-iterate what Cramer thinks about SEC enforcement:
Bull!