Posts Tagged ‘SEC’

Harriet had worked hard to get the education, the skills and there was now the job if she could get past the interview. When she was called for one she was all excited. Her résumé was impressive and she had the right attitude that spoke volumes and she wondered if her peers had in them to see what an asset she was.

The local bank wanted to interview her. It was an institution that served the local community for long.   She thought a Bank that had stood for traditional banking needs of four generations of her family was good enough for her. She also was keen to be a part of it. This bank was looked upon in their region with affection and was called by young and the old as Grandma Fiduciary of Fair Lawns. But the grandma had decided to move with the times. The new management bought her lock, stock and barrel. She didn’t mind. She was all for change.

The hedge fund firm Fairfield Greenbottle Group assessing her strengths said, “You are a charmer. You can speak so sweet that even a skinflint will part with his money.”So she was taken on their payrolls and her task was to lie to investors. When she got a million in bonus at the end of the year she excitedly told the chairman Mr. Pupus Lupus, “ You do take care of your employees so well!” Then they handed her sheaves of papers and said,” here is a star who requires kid glove treatment.”
Later she went over the folder thoroughly. She asked her boss, “ I have a great foreboding about this fellow.” Her boss was aghast, and whispered, “ Bernard Madoff is a genius. You may call him a swindler but he can make our firm give millions in bonuses year after year. Only if you’re a team player. ” She was not still convinced, and did some soul-searching. She asked herself before  going to bed, “Grandma where is your ethics? Your responsibility for the community?” A question like that before going to bed will only make one sleepless. She wrestled with it whole night. Next morning she alerted SEC who came and rescued her before she could be lumped together with the rest .



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SEC probed Stanford companies; red flags abounded

‘Washington-As with the Bernard Madoff case, the scandal surrounding billionaire R. Allen Stanford now seems clear and obvious in hindsight. Yet Stanford managed to run his alleged scheme even while the Securities and Exchange Commission and other regulators had him on their radar screens and investigated his businesses. Stanford wasn’t charged until last week’.
No one could have missed out the  signs. Of course the man on the street was not asked to follow the leads as SEC was. Sure enough the Commission missed the red flags.
‘Among them:

_A finding by regulators in June 2007 that Stanford’s company lacked enough capital to function properly as a securities brokerage firm. The company paid $20,000 to settle charges by the National Association of Securities Dealers without admitting or denying them.
_A board of directors that included Stanford’s father, his college roommate and a family friend who remained on the board years after suffering a debilitating stroke.

_The Antigua-based accounting firm that audited the offshore bank was tiny and little known.

_A 1999 Treasury Department advisory that warned U.S. banks to scrutinize transactions involving Antigua. It said a new regulator in Antigua was essentially a captive of offshore banks it was meant to supervise. (The advisory was lifted in 2001.)

Last week, the SEC accused Stanford in a civil lawsuit of a “massive” fraud. It said he peddled sham promises and funneled investors’ money into real estate and other assets not easily turned into cash. FBI agents in Houston are running a parallel investigation.

Stanford, who was served legal papers by FBI agents last week, hasn’t been charged with any crime.

The SEC began investigating Stanford’s businesses in October 2006 but was asked by another, unidentified federal agency to suspend its inquiry, an SEC official in Texas told news organizations last week’.
(Ack: by Marcy Gordon, AP Business Writer )
In this context Obama’s choice to head the new Recovery Act Transparency and Accountability Board takes a vital role. Paper Democracy is where agencies are set in place to serve the interests of the citizens without fear or favor. Working democracies are yet another kettle of  fish. Where SEC has failed the new Chairman might succeed. Who knows?

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