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SEC Ponzi Scheme Cover Up


This is a few days off, I’ve been working on end of semester projects.

I said the other day, how the SEC investigation into Goldman were politically motivated, specifically following the bootlegger and baptist model. Well according to this Business Insider article, the timing of the announcement provides another piece of evidence that it was politically motivated.

The timing of big announcements is often chosen with the aim of maximizing coverage (or minimizing it, in the case of bad news), or with the aim of pushing other stories out of the headlines.

What other stories might the SEC have wanted pushed out of the headlines yesterday?

Perhaps another one about the agency’s past incompetence and, possibly, corruption.

Yesterday, amid the Goldman fraud outrage, the results of another investigation into the SEC’s failure to spot Allen Stanford’s ponzi scheme were published.  They were devastating…

The piece then links to the WSJ story on Allen Stanford. (I linked to the un-gated version via the Oracle.)

The Securities and Exchange Commission suspected Texas financier R. Allen Stanford of running a Ponzi scheme as early as 1997 but took more than a decade to pursue him seriously, according to a report further tarring the agency that missed Bernard Madoff’s huge fraud.

The report by the SEC’s inspector general says SEC examiners concluded four times between 1997 and 2004 that Mr. Stanford’s businesses were fraudulent, but each time decided not to go further. It singles out the former head of the SEC’s enforcement office in Fort Worth, Texas, accusing him of repeatedly quashing Stanford probes and then trying to represent Mr. Stanford as a lawyer in private practice.

So we have not only gross incompetence but also serious ethics violations at the SEC. So the whole Goldman thing can also be construed as a serious “Cover Your Ass” ploy. But today another bomb was thrown at the SEC, while Rome burned, the SEC was surfing pRon. (pRon is LOL speak for porn)

One senior attorney at SEC headquarters in Washington spent up to eight hours a day accessing Internet porn, according to the report, which has yet to be released. When he filled all the space on his government computer with pornographic images, he downloaded more to CDs and DVDs that accumulated in boxes in his offices.

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An SEC accountant attempted to access porn websites 1,800 times in a two-week period and had 600 pornographic images on her computer hard drive.

Talk about equal opportunity. Don’t you sleep better knowing that there are government personnel surfing porn on your taxpayers dime. The SEC couldn’t do it’s job in the first place, so instead of real reform, we get over 1,000 pages of new regulations. That’s Liberal Logic, in all its glory.

So here’s what we know so far. The SEC is desperately trying to cover its ass over watching Rome burn in 2008. They are going after Goldman because its politically convenient for both the SEC and the Obama administration. Goldman doesn’t care, they will have access to billions in back door bail out from the Treasury, at the discretion of the Executive, whom which has already been bought.

The timing is very politically convenient as well, as it buries what would have been front page material behind the Goldman case. What the one thing that the public hates more than a Ponzi scheme cover up? Going after Wall Street of course. It worked. The Stanford case had nary a peep, while the Goldman case is they could talk about.

Unfortunately for them, the Pron surfing thing came out. Will it have a renewed interest in the Stanford case? I doubt it, but it will, hopefully, make people think twice, that the Government is all wise and all knowing.

I’m sure there is a whole lot more to know, its just a matter of time before the details leak out.

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