Posted on 05/17/2011 12:02:15 PM PDT by george76
Federal criminal authorities are investigating whether a former U.S. securities regulator inappropriately represented alleged fraudster Allen Stanford after he left the agency in 2005.
Spencer Barasch, former head of enforcement for the U.S. Securities and Exchange Commission in Fort Worth, Texas, is being probed by the U.S. Attorney's Office and Federal Bureau of Investigation, SEC enforcement director Robert Khuzami and SEC Inspector General David Kotz told lawmakers on Friday.
The criminal probe follows SEC internal findings that Barasch made numerous requests after he left the SEC to represent Stanford and was turned down each time.
Barasch persisted in his requests even though he directly dealt with Stanford matters while at the SEC and was partly responsible for ignoring repeated red flags SEC examiners raised about Stanford as early as 1997, Kotz found in a 2010 report. He later eventually did provide some legal counsel to Stanford in 2006, the report found.
"The rules clearly prohibited from ... in my view, representing Mr. Stanford," Khuzami told a House Financial Services oversight subcommittee on Friday. "We made a referral to criminal authorities."
In addition, Kotz and Khuzami said they had also referred the matter for investigation to the Texas and Washington, D.C. bars.
Republican lawmakers called the hearing to investigate why it took the SEC so long to probe Stanford, a Texas financier, despite repeated attempts by SEC examiners to bring the matter to the enforcement division's attention.
(Excerpt) Read more at ca.news.yahoo.com ...
I thought Stanford was in the Pac-12.
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