Take a Look at This, and Tell me How We Got Into this mess.

Discussion in 'Wall St. News' started by flytiger, Nov 7, 2008.

  1. http://online.wsj.com/article/SB122610357752310183.html?mod=googlenews_wsj

    The remarkable thing is, the pressure on the SEC is enormous. And they STILL do stupid stuff like this.

    It won't stand. But I found it absolutely startling.

    * NOVEMBER 7, 2008, 8:34 P.M. ET

    SEC Won't Discipline Its Enforcement Chief


    The Securities and Exchange Commission said it won't take disciplinary action against its enforcement chief and others who were criticized in a report by the agency's inspector general.
    [Linda Chatman Thomsen]

    Linda Chatman Thomsen

    The clearance of SEC enforcement chief Linda Chatman Thomsen and David Nelson, head of the agency's Miami office, came amid a congressional review of the agency's performance in recent years. Recent SEC inspector-general reports have highlighted potential issues raised by a revolving door between the government and industry.

    One report by the inspector general found Ms. Thomsen had improperly released information about an insider-trading investigation involving hedge fund Pequot Capital Management and John Mack, a well-known Wall Street executive. The inspector general concluded Ms. Thomsen improperly relayed information when she told lawyer Mary Jo White, who was working for Morgan Stanley's board and vetting Mr. Mack as a potential chief executive, that there was smoke but not fire in the investigation.

    A separate inspector-general report concluded Mr. Nelson failed to vigorously enforce securities laws by dropping a probeinto whether Bear Stearns Cos. overvalued certain securities, even though Bear had tentatively agreed to a $500,000 settlement.

    The SEC's chief administrative-law judge reviewed the allegations and decided not to discipline Ms. Thomsen over the insider-trading case. The judge said Ms. Thomsen did disclose to Ms. White information about the status of the SEC investigation, but "[t]here are no indications that Thomsen's disclosure was committed maliciously or for gain, or was frequently repeated."

    "I am pleased with the decision," said Ms. Thomsen. "We are all acutely focused on pursuing our mission during this very important time."

    The inspector general is currently investigating an anonymous tip that alleges Ms. Thomsen provided J.P. Morgan Chase & Co. information about its investigation into Bear as J.P. Morgan was negotiating to buy Bear. Ms. Thomsen declined to comment on the current investigation. A spokesman for J.P. Morgan said, "Allegations of improper discussions are wholly untrue."

    The judge also cleared Mr. Nelson, who said he was pleased with the result.

    SEC Inspector General David Kotz said he was "surprised and disappointed" by the decision.

    Write to Kara Scannell at kara.scannell@wsj.com

    Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

    Copyright ©2008 Dow Jones & Company, Inc. All Rights Reserved
  2. For Immediate Release
    November 7, 2008

    Senator Grassley says SEC refuses to hold anyone accountable for misconduct exposed by two independent inquiries

    Senator Chuck Grassley issued the comment below about the decision made today by an administrative law judge for the Securities and Exchange Commission to effectively disregard recommendations made last month by the Inspector General for the commission for disciplinary action against senior enforcement officials for their actions in firing SEC lawyer Gary Aguirre and failing to prosecute a case against Bear Stearns for mispricing collateralized debt obligations. Senator Grassley had asked the Inspector General to investigate both cases in response to complaints brought to him about the way the SEC handled both matters.

    “It looks like the lawyers for the wrongdoers wrote the decisions. It’s hard to believe that after everything that’s happened over the last two years, the Securities and Exchange Commission is refusing to hold anyone accountable for the misconduct exposed by two independent inquiries.”