SEC charges former Fannie and Freddie execs

On Friday, the Securities and Exchange Commission brought civil fraud charges against six former executives of Fannie Mae and Freddie Mac.  The complaint charges that the executives knowingly misled the public concerning the extent of subprime and Alt-A (a step above subprime)  mortgages that they held. Read more

The government part of the Madoff scandal

After the $50 billion Madoff Ponzi scheme came to light, it was learned that, over a 16 year period, the Securities and Exchange Commission had received no less than 6 “tips” that the company was, well, a fraud.  The SEC did nothing. Read more

More EPA madness

Remember earlier this year when the President directed that all administrative agencies review their rules so as to strike an appropriate balance between the need for the regulation and the economic impact of the regulation?  It should come as no surprise that the EPA either didn’t get the memo, or assumed that the President’s directive did not apply to it. Read more

So much for transparency: SEC says they are now exempt from FOI requests

Having a government gig can be hard work. It also can be lucrative and easy work for some. For Security Exchange Commission (SEC) employees, the gig just got a bit easier since they no longer have to deal with the public or news organizations filing freedom of information requests.

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The SEC and global warming

On Wednesday the Securities and Exchange Commission issued “guidance” to public companies concerning the issue of global warming.  As a bit of background, all public companies are required by the SEC to disclose to investors information which might have a bearing on an investor’s decision to, let’s say, purchase or sell stock in that company.

The SEC states in it’s press release,

“We are not opining on whether the world’s climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics,” said SEC Chairman Mary Schapiro. “Today’s guidance will help to ensure that our disclosure rules are consistently applied.”

Having said that, here is one of the things companies are required to do, and, in some cases, disclose to investors:

a company should also evaluate the potential impact of pending legislation and regulation related to this topic.

So, I thought, as a public service, I would take a pass at drafting language for the annual report, for example, of your electric company that trades on the New York Stock Exchange.

“Congress is considering passing Cap and Trade legislation which would require our company to pay a tax to the government to continue producing electricity.  We have no idea what the amount of that tax will be, and, we may or may not be able to pass that tax on to our customers.  We will be limited in the amount of electricity we can produce, and that limit may or may not be sufficient to meet our customers’ demand.  If we need to produce more electricity, we may or may not be able to purchase “credits” from other companies, but, we have no idea what the cost of those credits will be, or whether any credits will be available.

If we cannot meet our customers’ demand either under our own limits, or, through purchasing credits, we may or may not need to implement rolling blackouts, which may or may not result in litigation filed against our company which we may or may not win.

All of the above is subject to change  depending upon Congress, which may or may not draft any legislation in the open (see: health care), in which case, we may or may not be able to tell you what may or may not happen in the future.”

I would guess that you all will agree that policing this new requirement will be far more productive for the SEC than, say, discovering the next Bernie Madoff.

Madoff Whistleblower scorches the incompetent SEC

Harry Markopolos first blew the whistle on Bernard Madoff 9 years ago and no one listened. The story he tells is compelling. A securities fraud investigator he was asked to look into the Bernie Madoff Invesment Fund:

He said he contacted the SEC in 2000 after a four-hour review of Madoff’s investment strategy showed the promised return of more than 10% was impossible.

Over the next nine years, his team of investigators raised 29 red flags about Madoff to SEC officials in Boston, New York and Washington – all for naught.

Watch this video, he scorches the SEC for their incompetence  This is fantastic video.


You can see the full 4 hour and 38 minute testimony here.