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Put This Guy In Charge Of The SEC

Tyler Durden's picture




 

Yesterday, a retiring 38-year veteran trial lawyer's remarks shone a brighter light on the farce that the SEC has become in recent years. The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, adding that his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases. The agency’s penalties, Kidney said, have become “at most a tollbooth on the bankster turnpike.” As the full letter below shows, he had a lot more to add on just how the toothless agency should be run...

"The only other item I want to be serious about, besides some personal observations in a minute, is the metric of the division of enforcement: number of cases brought. It is a cancer. It should be changed.

 

The metric we have now is built into the soul of the Division. It has to be removed root and branch"

His concluding questions leave management mouths open...

"Are we so sure that our own domestic corporations and audit firms are law abiding that we can spend vast quantities of staff time and taxpayer money worrying about firms in other countries because a handful of ADRs are sold on U.S. markets?

 

Are we so paralyzed by the organizational stovepipes we have created and made more and more of that we can’t flood the zone on important cases instead?

 

Do we have to preserve bureaucratic organizational boundaries by sweating the minutiae just so each organizational unit can claim to have enough to do to protect some manager’s turf?"

Kidney's Full Retirement Comments below:

Retirement Remarks

 

Still think he must be exaggerating and is just venting after a lifetime of thankless litigation.. think again...

As The Wall Street Journal reports,

Bruce Karpati, a former top Securities and Exchange Commission lawyer, is heading to private-equity giant KKR & Co. to become global chief compliance officer, said people familiar with the matter.

 

Mr. Karpati, most recently the chief compliance officer for Prudential Financial Inc.'s mutual fund business, is expected to start at KKR later this month, one of the people said.

 

...

 

Mr. Karpati will oversee KKR's compliance with regulations around the world. KKR is a registered investment adviser and has a broker dealer in the U.S. He succeeds H.J. Willcox, who left KKR last year for a similar position at AQR Capital Management LLC.

 

Mr. Karpati spent more than a dozen years at the SEC, rising through the ranks to lead the enforcement division's asset-management unit. He oversaw investigations into a wide variety of investment firms, including a probe that ultimately led to a settlement between hedge-fund manager Philip Falcone and the SEC that banned Mr. Falcone from the securities industry for several years.

As a gentle reminder, here is what Kidney said...

Kidney said his superiors were more focused on getting high-paying jobs after their government service than on bringing difficult cases.

Shocked...? So does the C in SEC stand for Cronyism of another "C" word?

 

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Wed, 04/09/2014 - 18:23 | 4641075 johngaltfla
johngaltfla's picture

Obviously not a squidlike creature....

Wed, 04/09/2014 - 18:39 | 4641111 ghengis86
ghengis86's picture

more a like a jelly-fish until a few days ago.  I don't know if that's a spine he grew or an eleventh hour confession...

Wed, 04/09/2014 - 18:49 | 4641135 Looney
Looney's picture

All these phuckers find their religion only AFTER they become an EX-somethin’. Where was he 2, 5, or 10 years ago? Has he just found out ‘bout all this shit going on? When the day comes, all of them, including current and former ones, must be Robespierred. I think? ;-)

Looney

Wed, 04/09/2014 - 18:50 | 4641145 NOTaREALmerican
NOTaREALmerican's picture

He's in the same place all the "Libertarian" OldFarts are when they say nobody should have socialist medical coverage.

Everybody loves the Big-Gov scam they are living off of, looting, or planning to retire comfortably on. 

I know I do.

Wed, 04/09/2014 - 19:15 | 4641208 SilverIsKing
SilverIsKing's picture

What did Mr. Kidney accomplish while at the SEC?

Not defending the criminals but perhaps he is speaking out due to sour grapes. No cushy corporate job for him and a shitty retirement package?

Wed, 04/09/2014 - 23:41 | 4642064 James_Cole
James_Cole's picture

Not defending the criminals but perhaps he is speaking out due to sour grapes. No cushy corporate job for him and a shitty retirement package?

He's heading to kkr, the very definition of cushy corporate job. 

Wed, 04/09/2014 - 19:35 | 4641256 LetThemEatRand
LetThemEatRand's picture

"All these phuckers find their religion only AFTER they become an EX-somethin’. Where was he 2, 5, or 10 years ago?"

The large majority don't find religion at all.  The guy seemingly made waves (per his account) and never cozied up to TBTF, so he was never in line for the revolving door.  As a result of that and not kissing internal ass, he probably needed the paycheck/pension, knowing that he was going to end up on the short end of the stick if he left, due to his "bad attitude."   Maybe he thought it would change over time.  Who knows.  But kudos to him for calling out the bastards upon retirement in a very public way.  That takes balls, even if it took him a while to really find them.  Better to find your balls late than to tea bag them on a bankers forehead as do the vast majority of his "superiors."

Wed, 04/09/2014 - 19:39 | 4641282 Greenskeeper_Carl
Greenskeeper_Carl's picture

exactly, i posted something similar on another article about this guy. We should be thankful he is doing this at all. Most people, even if they feel essentially the same way, just do their time, retire, and thats the end of it. If more people di what this guy did, maybe there would actually be some progress. Dumping on him for being late to the party accomplishes nothing. Better late than never

Wed, 04/09/2014 - 21:18 | 4641618 TheReplacement
TheReplacement's picture

I'm confident that certain people here are dumping on him because they are getting paid to do so.  Along they way they trash libertarians and basically paint everybody with the same brush and make it seem okay to go along to get along.  These government agents need to be banned.

Wed, 04/09/2014 - 21:04 | 4641576 The Gooch
The Gooch's picture

Where is Jon Corzine's forehead?

Thu, 04/10/2014 - 11:41 | 4643468 The Third Man
The Third Man's picture

When commenting on his fellow prisoners at the Nuremburg war crimes trial, soon-to-be-dead Field Marshal Hermann Goering is rumored to have said, "All you see here are YES men, because all the NO men are buried six feet under."

Hierarchies don't promote "NO" men.

Thu, 04/10/2014 - 08:19 | 4642586 TruthHunter
TruthHunter's picture

"All these phuckers find their religion only AFTER"

I'd be more impressed if he said, "Oh by the way, I've been collecting

evidence...

 


Wed, 04/09/2014 - 18:40 | 4641113 TideFighter
TideFighter's picture

Prolly the only one not able to use the SEC on his CV. Strangly, porn was not mentioned. 

Wed, 04/09/2014 - 21:03 | 4641571 The Gooch
The Gooch's picture

Fuck all that.

Burn the fiat casino down.

END THE FED.

Legalized insider trading for CONgress?

 

Wed, 04/09/2014 - 18:50 | 4641146 ultimate warrior
ultimate warrior's picture

OT

 

My avatar died today.

RIP Ultimate Warrior

Wed, 04/09/2014 - 20:30 | 4641450 Colonel Klink
Colonel Klink's picture

Don't feel bad, if things keep going the way they are, my avatar will be reborn.

Wed, 04/09/2014 - 21:49 | 4641727 Terminus C
Terminus C's picture

What do you mean "will be"? He's running the fucking show.

Wed, 04/09/2014 - 19:34 | 4641262 WhackoWarner
WhackoWarner's picture

So tell yourself, honestly, how much you would snitch when you have a wife and kids?

Wed, 04/09/2014 - 20:17 | 4641393 MeelionDollerBogus
MeelionDollerBogus's picture

So basically to be safe snitching on the criminals you need a fake life - wife & kids - and once you're in you can tell them they can go take off so when they finally come for your 'family' you can rest safe because you didn't have one in the first place. In other words, you have to totally James-Bond your way into it from the outset. Or pull a Snow(den)-job on 'em.

Wed, 04/09/2014 - 20:02 | 4641361 WhackoWarner
WhackoWarner's picture

On second thought maybe he should not be hailed for his opinions.  Maybe prosecuted for collusion; aiding and abetting?

Wed, 04/09/2014 - 21:21 | 4641622 TheReplacement
TheReplacement's picture

You can't prosecute him for aiding and abetting when there is nobody charged with the primary crimes he supposedly aided and abetted. 

Free Corzine!

Wed, 04/09/2014 - 18:23 | 4641076 Cattender
Cattender's picture

those guys at the SEC are pro's. keep up the good work guys!

Wed, 04/09/2014 - 19:39 | 4641281 Aussie V
Aussie V's picture

Not much good having a wife and kids if you can't sleep at night due to your conscience continually nagging at you.

It's a personal thing but, I have always liked a good honest fight against ponsy fuckers!

Wed, 04/09/2014 - 18:26 | 4641082 The Alarmist
The Alarmist's picture

So you want the SEC to start profiling?  That's just rayciss!

Wed, 04/09/2014 - 18:45 | 4641133 Cacete de Ouro
Cacete de Ouro's picture

Let me be clear! The SEC exists to serve the people

(some of the people, all of the time)

Wed, 04/09/2014 - 18:38 | 4641095 logicalman
logicalman's picture

It's called bureaucracy.

Nature of the beast.

One question, however.

How can you put up with that shit for 38 years?

Wed, 04/09/2014 - 18:50 | 4641148 CH1
CH1's picture

Bureaucracy: It sucks the life out of everything it touches.

Let's have more of it!!!

Wed, 04/09/2014 - 18:53 | 4641155 NOTaREALmerican
NOTaREALmerican's picture

Re:  How can you put up with that shit for 38 years?

The benefits are good.    Would be like working for company making a known cancer causing agent,  or maybe a TBTF bank stuffing young debt serfs with more debt narcotic.    

You can tell the adults from the children by how happily they live duplicitous lives. 

Wed, 04/09/2014 - 19:31 | 4641250 logicalman
logicalman's picture

My goal in life has been to enjoy it as much as possible.

I could never work for a large corporation, whatever the benefits.

My 'soul' (I'm an atheist, hence quotes) has never, and never will be, for sale.

 

Wed, 04/09/2014 - 19:42 | 4641291 Aussie V
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If you're an athiest surely you don't believe you have a soul?? (or was that what the quotes are meant for?)

Wed, 04/09/2014 - 20:07 | 4641375 MeelionDollerBogus
MeelionDollerBogus's picture

Ya, that's what the "quotes" are for.

Wed, 04/09/2014 - 20:28 | 4641444 logicalman
logicalman's picture

thanks.

Wed, 04/09/2014 - 21:28 | 4641641 TheReplacement
TheReplacement's picture

Simple, he didn't.  Most of that time he was probably in or very close to the trenches where you can only see the enemy directly opposite you.  Over time he would have moved up and each step up would have given him a better view of more of the picture.  Perhaps at some point he recognized what was happening and vowed to stop it.  After all, if you wanted to stop corruption on Wall Street what better agency to work for?  Feeling he was the right guy in the right place at the right time he might have worked diligently for years only to be foiled again and again by insiders and higher-ups.  Eventually any man would have said, 'Only X years until I retire.  I'll make that and then go public.  Just have to hold on...'

I highly doubt he knew 38 years ago what he knows today.  Things creep up on you, like ear hair.  You never even think about ear hair until the day you happen to catch a glimpse of something resembling a daddy longlegs crawing out of the side of you head.  It's all downhill from there.

Wed, 04/09/2014 - 18:34 | 4641102 The Fonz...befo...
The Fonz...before shark jump's picture

It's called a CAPTURED REGULATOR...

Wed, 04/09/2014 - 18:46 | 4641118 ebworthen
ebworthen's picture

"There are three major reasons for my misanthropy at the SEC. They are the bureaucracy, the incredible over pleading of minutiae and picking on the little guys."

You could replace "SEC" with "ZZZ" .gov agency and be spot on.

EPA

IRS

DEA

DHS

DOJ

etc.

Nice topic sentence there, Mr. Kidney.

Wed, 04/09/2014 - 18:48 | 4641140 NOTaREALmerican
NOTaREALmerican's picture

Joey Naylor: Dad, why is the American government the best government?

Nick Naylor: Because of our endless appeals system.

 

Wed, 04/09/2014 - 18:42 | 4641120 Joebloinvestor
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They should have put Harry Markopolos in charge.

Wed, 04/09/2014 - 18:43 | 4641122 Cacete de Ouro
Cacete de Ouro's picture

Midgets R'Us

Wed, 04/09/2014 - 18:52 | 4641152 unplugged
unplugged's picture

this guy is going to commit suicide in 3...2...1...

Wed, 04/09/2014 - 19:42 | 4641288 Greenskeeper_Carl
Greenskeeper_Carl's picture

or a tragic car accident in his late model luxury sedan

Thu, 04/10/2014 - 23:25 | 4641362 MeelionDollerBogus
Wed, 04/09/2014 - 18:54 | 4641161 WhoMe
WhoMe's picture

Well they did put the powerful, diabolical Martha Stewart in prison. A tip of the hat to the SEC for their "fine" work.

Wed, 04/09/2014 - 20:31 | 4641457 logicalman
logicalman's picture

She didn't do time for what she did.

She did time for lying about it.

Clapper, anyone?

 

Wed, 04/09/2014 - 18:55 | 4641164 infinity8
infinity8's picture

That was weird. Like Stockholm Syndrome that had a fatal break.

Thu, 04/10/2014 - 06:10 | 4642400 pies_lancuchowy
pies_lancuchowy's picture

correct, this is creepy . Like an overgrown schoolboy bullied for 38 years

Wed, 04/09/2014 - 18:58 | 4641170 Seasmoke
Seasmoke's picture

This is going to cost him more than a kidney.

Wed, 04/09/2014 - 19:18 | 4641181 williambanzai7
williambanzai7's picture

Yep, one big club (Club Nolo)...Bear in mind it is essential to maintain the shallow facade that our markets are fair, transparent, efficient and well regulated. That is all it is about. It has nothing to do with catching big fish. It is all about creating distractions and running interference while the big boys ply their trade. If you see anything that resembles a big case, it is because someone has to be thrown under the bus to save the edifice of Bull Shit.

One can assume that most Americans think the SEC is the Oprah Channel. 

Every "brass ball" regulator initially appointed by Clownbozo is now leaning back in a leather seated Midtown corner office.

At least they nailed the CHIPs penny stock co-conspirator with a cease and desist order.

To this they will retort, look at all the insider traders we nailed, to which I will retort: what is the significance of that in a country where the chief legislative branch is allowed to do the same thing with impunity?

Thu, 04/10/2014 - 12:02 | 4643607 novictim
novictim's picture

Nicely said!

Wed, 04/09/2014 - 19:06 | 4641195 nmewn
nmewn's picture

"Are we so paralyzed by the organizational stovepipes we have created and made more and more of that we can’t flood the zone on important cases instead?"

In a word, yes.

Wed, 04/09/2014 - 19:23 | 4641225 Pike Bishop
Pike Bishop's picture

Oh man, that SEC is a horrible fuckin' mess. We know it, we've known it, but it doesn't make it any less gruesome in bold display.

We are clearly at the point to just end the SEC, and the pretense of Financial Industry regulation with it. I'm not sure if the CFTC would part of the elimination. But if it isn't, it should surely be next in line for wholesale elimination.

Rather than feign preventing the Big Houses from looting and stealing by favor and thuggery, we should just let them run hog-wild until they destroy everything, and no longer have anything remaining on which they can feed, The disembowlment of the Middle Class has been a good start, but there are a few bricks of this Economy still remaining to be toppled.

We have suffered these society-devouring Zombies and their Belief Systems long enough

Wed, 04/09/2014 - 19:56 | 4641249 MeelionDollerBogus
MeelionDollerBogus's picture

"Read all about it! Read all about it! Zerohedge reports Kidney has the stones to run the SEC!"

Wed, 04/09/2014 - 19:44 | 4641279 Pee Wee
Pee Wee's picture

So, where is the bastion of enfarcement, himself - Chris Cox?

Blast from the past http://content.time.com/time/business/article/0,8599,1843519,00.html

Another Bush mercenary of injustice.

Wed, 04/09/2014 - 21:32 | 4641657 TheReplacement
TheReplacement's picture

That makes so much sense because Bush hasn't been in office for five years. Red, blue, me, and you.

Lay it down clown.

Wed, 04/09/2014 - 19:48 | 4641317 Pumpkin
Pumpkin's picture

Government stamp of approval = their cut.

Wed, 04/09/2014 - 20:17 | 4641406 enloe creek
enloe creek's picture

simply amazing to me that anyone cares anymore theres no bringing back lost virtue once it is gone

Wed, 04/09/2014 - 20:21 | 4641415 Colonel Klink
Colonel Klink's picture

They will never put someone honest in charge of anything or the game is up.  Once the truth starts coming out then the huge dirty lie is revealed.

Thu, 04/10/2014 - 06:10 | 4642402 pies_lancuchowy
pies_lancuchowy's picture

this is creepy . Like an overgrown schoolboy bullied for 38 years

Thu, 04/10/2014 - 11:24 | 4643343 Chuck Knoblauch
Chuck Knoblauch's picture

A new rule that makes it a crime to accept employment with a publicly traded company 2 years from leaving an SEC enforcement post.

Thu, 04/10/2014 - 11:53 | 4643538 novictim
novictim's picture

The government isn't doing enough to police the Banks and Wallstreet...

...so, of course, we need LESS government.  Right?

That is what passes for logic on ZH where deregulators out populate the sane by 5:1.

---

The reason why we have the revolving door between regulators and the Financial sector, and the reason we have poor regulation/rules to begin with is that our "democracy" is owned by the highest bidder.  We are all screwed as a result.  Rome wasn't built in a day but it will fall in a day.

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