The Tortured Attempts of SEC Reform
Bloomberg has a huge, detailed piece on Mary Schapiro’s efforts to reform the SEC. Its today’s required reading:
“Schapiro became SEC chairman in January, having been nominated by President-elect Barack Obama to attack Wall Street’s “culture of greed” and bring the “new ideas, new reforms and new spirit of accountability” to an agency whose failures, Obama said, helped spur the 2008 market meltdown.
In her first year in office, Schapiro’s found that issuing proposals is easier than finalizing them. “You get zero points in history for what you proposed,” said former SEC Chairman Richard Breeden, who now manages a hedge fund that tries to remove directors at companies he believes are underperforming. “You get points for what you get over the goal line.”. . .
At a time when lawmakers were threatening to strip the SEC of power because of failures in policing Wall Street, she helped restore its credibility, former officials said, by cleaning up units that missed Madoff’s crimes and proposing regulations for credit-rating companies that assigned top grades to toxic mortgage securities.”
Long, but worth the read . . .
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Source:
Schapiro Whipsawed By Wall Street, Lawmakers, Defers SEC Rules
Jesse Westbrook
Bloomberg, Dec. 30 2009
http://www.bloomberg.com/apps/news?pid=20601109&sid=afUo_v5lEmwc
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December 30th, 2009 at 9:36 am
Welcome to the United States of Inertia. Catch the Fever.
December 30th, 2009 at 9:39 am
” The next year will be a real proving ground.” hmm.. understatement.. more like a nuclear test site.
December 30th, 2009 at 10:25 am
i guess kind of sad, she sound pretty good, knows what to do and gets zero support to do the right thing, thus, it’s business as usual, and she’ll probably leave in a few years in frustration after being praised as turning it around when nothing really was done
December 30th, 2009 at 10:35 am
more of my tax dollars being used to fund bad decisions. can someone point me to someone i can take my anger out on?
WASHINGTON (Reuters) – GMAC Financial Services is expected to get about $3.5 billion in additional U.S. government aid to help the troubled lender absorb mortgage losses, a financial industry source familiar with the matter said on Wednesday.
December 30th, 2009 at 10:36 am
Barry,
You should talk about this:
http://www.cnbc.com//id/34630585
December 30th, 2009 at 10:43 am
Like your mama always said, a good reputation is hard-earned and easily lost. SEC has zero credibility. Also, I’m wondering if she caved on the unannounced audit issue because the truth is SEC doesn’t have the qualified manpower to make all those site visits right now.
December 30th, 2009 at 11:01 am
GM in my area is heavily advertising, 72 month loans at zero interest………….seems like biz as usual
December 30th, 2009 at 11:08 am
free market extreemist-
the “recovery” is already priced in- but buy some more stock by all means
December 30th, 2009 at 1:30 pm
As my old football coach used to say when I missed a block and protested that I “meant” to block the guy, “The road to hell is paved with good intentions.” Shapiro may have good intentions. So does Goldman Sachs–for heaven’s sake, they believe they are doing “God’s work”. But the quarterback still got tackled, and we’ll still be paying for the good intentions of our leadership.
December 30th, 2009 at 5:49 pm
@ Free Market Extreemist
“You should talk about this” and this:
http://www.tulsaworld.com/news/article.aspx?subjectid=14&articleid=20091230_298_0_ArrowT541023
December 31st, 2009 at 11:49 am
[...public humiliation in September by a federal judge who called a proposed $33 million settlement of an enforcement case with Bank of America Corp. a “contrivance.” ...]
This event should have told Shapiro of the need to recommend public censure and criminal prosecution for certain offenses. Where she claims her Office does not have jurisdictional authority to file criminal suits, she falls short in acknowledging her Office can, make formal, recommendation for criminal prosecution to the appropriate authority.
The Merrill, John Thain, BofA debacle features Shapiro trying to serve the interests of large banking executives who conceal information from voting shareholders and also lie to them prior to polling their vote. This is raw Constructive Fraud and BREACH of DUTY. Offending parties in group, should go to prison with Madoff.
Both offenses are prosecutable with legitimate application of RICO statutes and to give the deterrent measure appropriate bite, tack on charges of conspiracy to commit fraud, and several counts of Fraudulent Conversion. Minimum 5-8 years + same fine as she tries to collect in civil suits (which name no offending party outright in the offense being settled – disgraceful work there Mary. Quite Contrary to conceal the names of offenders in a settlement, after accusing them of concealing information from shareholders. )
The fact that Shapiro sees herself as an guardian of Investors, specifically [...“Investors are looking to the SEC to assure the safekeeping of their assets,” Schapiro said at the time. “We cannot let them down.” ] and sees herself as the type of person who collects evidence to leverage civil claims, obligates her to make recommendations formal, for more serious criminal action.
In such obligation she and her entire office should be making pledges and promises, to American investors, that criminal prosecution and prison is what is needed to curb incidence of abuse and discourage exectives in financial firms and students coming into the industry, from trying to exploit people’s trust, while acting as custodians for other peoples money.
Shapiro should be more diligent and it is the failure on her part to show the shrewd talon of an EAGLE featured on the emblem of her agency, is one important reason she does not get support.
She needs to turn the agency into a powerful clutching force for good. And she is clearly missing the mark in her handling of John Thain. This is a clear-cut-case of the worst type of offense a custodian of other people’s money can perpetrate: Concealment of information require to disclose + Fraudulent Conversion from that deceitful practice. There is sufficient evidence that the concealment and deceit, was part of a pattern, to deceive and with the end result of converting other people’s money, into executive wealth or individual wealth for parties who acted in that ongoing deception.
-snip-
December 31st, 2009 at 4:04 pm
She needs to turn the agency into a powerful clutching force for good. And she is clearly missing the mark in her handling of John Thain. This is a clear-cut-case of the worst type of offense a custodian of other people’s money can perpetrate: Concealment of information require to disclose + Fraudulent Conversion from that deceitful practice. There is sufficient evidence that the concealment and deceit, was part of a pattern, to deceive and with the end result of converting other people’s money, into executive wealth or individual wealth for parties who acted in that ongoing deception.
‘Driving Hard’ …?…
More like deliberately trying to fumble the ball, because she has a side wager. People get banned from sports for that kind of “action.”
She should have the talons of her office wrapped up so firmly around John Thain’s life he cannot move to the left or to the right until he agrees to make confession of his criminal behavior. She should have already had his accounts locked up, and be making him beg for money to pay his lawyers like she is doing to anyone else who is not affiliated with Goldman Sachs, such as Texas financier Allen Stanford. What an un-even, non-equitable purveyor of favoritism, has been appointed to run the SEC.
Is it any wonder she does not get support for her “proposals?”
Mrs. Shapiro puts the cart before the horse. She does not need proposals. She simply needs to do her job.
She is so caught up in appearing effective to garner the support of her mentors, that she is letting the mud of corruption and picking favorites collect on her hips.
The EAGLE moves with much better care, to keep the feathers clean.
January 1st, 2010 at 2:49 pm
Study the EAGLE. Its the best mentor a person can have in a regulatory capacity. You don’t have to impress it with consensus building or fashionable appearances. The EAGLE cares for a few things, the fewer the better. Effeciency there. Shrewdness is one of them. Strength is another. Its talons are sufficiently powerful to make every vermin under foot, squeal from the center of its being.
John Thain should have already been indicted and posted bond. Shapiro’s office acts like they have no clue how to rain in abuse. (Without writing a myriad of proposals.) How much time is spent writing proposals and getting staff involved, in proposal writing? When the focused regulatory agency, all it needs to do is look for vermin – scout for vermin. Scout for vermin – look for vermin.
Study the EAGLE. The eyes across its beak, do not smile nor favor any vermin under its talon. It is determined and narrowly focused. Its effectiveness is in this simple ability to maintain focus. Even from a distance, it knows exactly what to look for – and does not need to build consensus, nor propose – maybe we should wait for a cloud to be raised so high, until we strike that vermin.
Its stare from close overhead, strikes fear in the core of each vermin, irregardless of color or habitat. The EAGLE is a solitary creature and has sufficient wisdom in itself to know what it needs to do. The EAGLE has few friends in the natural world, and does not need consensus building to perform good and powerful work detail. This is more at practical efficiency that the EAGLE does NOT try to perform-consensus maneuvers.
Wastes no energy. Serves in a narrow range of functions.
You want respect and support? Do your job. There should be about 7 to 18 people indicted with John Thain. Some for lesser offenses, but all fined, all named in any settlement and all subjected to swift justice Madoff got.
The Merrill Lynch, BofA suit, is an ideal situation to invoke rigorous prosecutorial rights or recommendation, so that offenders can get the sense that some fraud is simply not tolerable. Mandatory no exception: Civil and criminal settlements to include recommendation for public censure, or the same ban Neil Bush got.
The work of the SEC is to strike fear into people, not build concensus. …? Make example tall and large and offer no offender any quarter, less they provide evidence of greater network. Good deterrent is essential in a time like this, to restore public trust. Deterrent is crucial to separating the bad chaff from good wheat. How can the good be considered good, if they are littered with many bad elements?
Fear is important in deterring future abuse, long term, going forward. Sheer terror, from vermin, when they see the eye of the EAGLE, looking down its beak. …FEAR… So that in the future all people will think twice and be discouraged from acting in a fraud or culture of fraud with others.
The Allen Greenspan style of condoning fraud is also, a Bernard Madoff friendly idiology. Stop skirting around with proposals. Do your job.