Finance Reporter Looks At ‘Why The SEC Won’t Hunt Big Dogs’

[MissMillie]

After years of investigations into the Wall Street deals that were at the heart of the financial market collapse, the SEC, the agency charged with protecting investors and maintaining fair practices in financial markets, has only brought civil actions against two low- level bankers. The last one was the case the SEC settled this month with Citigroup.

The agency said the bank had misled its customers, selling them investments which the bank’s own traders were betting against. And according to internal emails, the bank’s managers were so sure the investment was going to fail, they were angling to get credit for the profit from betting against the investment even as they were selling it. But the government did not charge any managers, only one, relatively low – level bank employee.

ProPublica reporter Jesse Eisinger looks at why the SEC isn’t investigating bigger fish in the pond.




http://hereandnow.wbur.org/2011/10/28/wall-street-sec

Can't imagine why anyone would want to protest.... (/sarcasm)

[elleng]

1. 'O.K., so what is it? Risk aversion.

Based on the major cases the S.E.C. has brought, a pattern has emerged. It is making one settlement per firm and concentrating on only the safest, most airtight cases. The agency's yardstick seems to be, who wrote the stupidest e-mail? Mr. Stoker of Citigroup wrote an incriminating e-mail that recommended keeping one crucial participant in the dark. Goldman's Fabrice Tourre, the other functionary the agency has sued, wrote dumb things to his girlfriend.

But the S.E.C is not the G-mail G-man. It is the securities police. Imprudent e-mailing is not the only way to commit securities fraud.

Maybe the agency hopes that private litigation will take up the slack. It cannot investigate and wring a prosecution or settlement out of every corrupt deal. Instead, it has long aimed to plant a flag and let private litigants take care of the rest.

But private litigation has failed.'

[MissMillie]

2. I think it's a combination

but what caught my ear was this guy speculating that the SEC folks might someday be looking for work on Wall Street.

Anyway, for all the folks who say the OWS folks are loons.... they need to hear this. They're not crazy.

(I'm sure most folks here agree w/ that already)

[elleng]

3. Right; we sure agree.

IF I were speaking to my 'husb, who works at SEC, I could discuss this with him, but nevermind.

Yes, probably a combination, risk averse, habit, 'we ain't never done that before.' That's recently, of course. In the old days, they sure did; that's why they were established.