...That's about how late to the party the SEC usually is. In today's news, the Securities & Exchange Commission is under fire because staffers were hopelessly addicted to porn.
Among findings in a report:
- A senior attorney at the SEC's Washington headquarters spent up to eight hours a day looking at and downloading pornography. When his government computer ran out of hard drive space, he burned the files to CDs or DVDs. He later agreed to resign.
- An accountant was blocked more than 16,000 times in a single month from visiting "sex" or "pornography" sites, but still managed to amass a collection of "very graphic" material by using Google to bypass the SEC's internal filter. He wound up with a 2-week suspension.
- Seventeen of the randy employees were "at a senior level" earning salaries of up to $222,418.
As congressman Darrell Issa put it, it is "disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking action to help stave off the events that put our nation's economy on the brink of collapse."- The number of cases jumped from two in 2007 to 16 in 2008. The cracks in the financial system emerged in mid-2007 and spread into full-blown panic by the fall of 2008.
And he's right. From the SEC's own report on Bernie Madoff:
The OIG investigation did find, however, that the SEC received more than ample information in the form of detailed and substantive complaints over the years to warrant a thorough and comprehensive examination and/or investigation of Bernard Madoff and BMIS for operating a Ponzi scheme, and that despite three examinations and two investigations being conducted, a thorough and competent investigation or examination was never performed. The OIG found that between June 1992 and December 2008 when Madoff confessed, the SEC received six! substantive complaints that raised significant red flags concerning Madoffs hedge fund operations and should have led to questions about whether Madoff was actually engaged in trading.
So, what to do? My good friend and I constantly argue about this, and he comes down on the side of better funding for the SEC. I don't know that I agree. Even the family of an SEC investigator into Madoff's invested $2million with him...
So what's the answer? I don't quite know, but change at the SEC should come from the top. SEC chief Mary Schapiro's former job was at FINRA, and in addition to her attempts to circumvent the law and impose union-friendly rules on SEC-regulated companies, she was paid many many millions while FINRA lost, well, a LOT more than that:
From the WSJ:
FINRA's Form 990 for 2008 reports
that Ms. Schapiro's compensation was $3.3 million,
not bad for an outfit that lost almost $700 million that year thanks largely to
an overly aggressive strategy of investing FINRA's portfolio in hedge funds and
other exciting opportunities. Last year FINRA changed to a more
conservative investment approach, but as far as we're aware it made no effort to
claw back some of Ms. Schapiro's salary.
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