Posted on 07/03/2009 5:05:02 PM PDT by FromLori
If anyone thinks the Securities and Exchange Commission's goal is investor protection, they should read this WaPo article by Zachary Goldfarb.
The goal of the SEC is the same as that of all government agencies:
1. To protect their turf
2. Expand their turf
SEC investigator Genevievette Walker-Lightfoot clearly had Bernie Madoff in her sights. She knew something was up, outlined her suspicions and what steps should be taken next in examining Madoff. But, at the same time, the SEC was having a turf war with Eliot Spitzer over who would supervise certain mutual fund infractions. Rather than allowing her to pursue the clear problems she uncovered in her initial investigation of Madoof, she was transferred to the mutual fund sector.
Also of interest, it can be inferred from the WaPo report that Madoff's capture of the SEC may have been in play:
Walker-Lightfoot's supervisors on the case were Mark Donohue, then a branch chief in her department, and his boss, Eric Swanson, an assistant director of the department, said two people familiar with the investigation. Swanson later married Madoff's niece, and their relationship is now under review by the agency's inspector general, who is examining the SEC's handling of the Madoff case...Madoff boasted at a business roundtable discussion about his close relationship with SEC regulators, saying "my niece just married one"... After Walker-Lightfoot's inquiry concluded, the Madoff investigation was transferred to the SEC's New York office, and the documents collected by the Washington office were shipped there. The Office of Compliance Inspections and Examinations in Washington was too busy working on mutual funds and other cases deemed to be of higher priority, according to agency officials. A New York team ...found no evidence of fraud. Madoff received a private deficiency letter from the agency, warning him to improve certain practices.
The Senate controls the SEC and Madoff gave a LOT to Dems. He was protected at the SEC by the Dem Senators from NE states.
The real goal of the typical SEC lawyer is to get a few years experience so he can move up to a far more lucrative job at a securities law firm like Foley & Lardner.
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