-------------------
Sign the Market Reform Petition now. Click here to view it.
-------------------
Apparently the SEC's record of non-pursuit of NSS cases isn't a singularity. Allowing Wall Street to rip-off mainstream investors is just one of their deficiencies, although by no means their smallest.
If you're a company that has been naked shorted into the ground, and is now unable to meet your listing requirements, you are going to get a can of whup-ass opened on you by our fine regulator. If you are a largely defenseless high profile CEO of a company a cartel of short sellers has made a huge negative bet on, you are going down in a very public way.
But if you're a hedge fund cartel serendipitously short a shocking number of Reg SHO list companies, or a reporter that's been helping them jack the system, you can sleep well - nobody will trouble you with embarrassing questions.
Here's a fun article from the WSJ, wherein the SEC's decline in enforcement actions is covered.
That's one way to show the bad guys. Prosecute less, and when you do, pick on companies at the end of their ropes versus well funded cartels of predators. Huh. How would you expect an agency largely believed in some circles to be captured by Wall Street to behave? Prosecute the folks being sued for malfeasance, again and again? Or go after Eagletech? Force the system to right the Global Crossing 99.7% reduction in their market cap, or go after Patrick Byrne?
That's a tough choice. Not a lot of delisted companies are going to be offering mid and upper level SEC staffers ten-times-the-money jobs when they get tired of looking the other way in their official positions.
Speaking of looking the other way, Richard "Don't fix it if it ain't broke" Shelby of the see-no-evil Senate Banking Committee issued a tersely worded snipe reminding us all of how his committee is the overseer of the SEC.
From Bloomberg:
``Oversight of SEC enforcement of U.S. securities laws falls entirely under the jurisdiction of the banking committee,'' Jonathan Graffeo, a spokesman for Shelby, wrote today in an e- mail. ``The chairman does not feel that further regulation of hedge funds is necessary at this time; however the banking committee will continue to conduct vigilant oversight of hedge funds and the overall regulation of U.S. securities markets.''
Apparently Shelby has a short memory. Given that he did nothing, and completely missed (as did the SEC) EVERY major Wall Street scandal over the last decade or so, one has to wonder what the hell he and his buds were doing? Analyst scandal? No Shelby. Mutual fund frontrunning? Taking a powder. Specialist scandal? Out for a smoke. I mean, you'd have to be deaf, dumb and blind to miss these, and yet here he is, insisting that his special brand of oblivion should be the prevailing approach to regulating, or rather, not regulating, the Street.
So, given the massive outcry and media firestorm over naked short selling, where have the Banking Committee hearings been? Oh, nowhere. We'll have none of that. Tut tut. No probes into why hundreds of millions of FTDs are in the system daily, or why a company like Global Links can have its market cap slashed by 99.7%, with no regulatory action for two years. No questions as to how companies like NFI and KKD and OSTK can remain on the SHO list since day one, with virtually no break. No, apparently Shelby, in the best gangster tradition, is so selective in his focus that only praise emanates from his office - unless he is defending the rich special interests who are raping the investing public, in which case, inaction is the best action.
We have become a nation of lies, led by liars. Our elected officials routinely lie to our faces, and when confronted by the truth, pretend they can't see the data, or that the data isn't what it all so clearly is. The media goes along with it, and our regulators are towel boys to the biggest crooks on the planet. And it is getting worse, not better.
But we don't want anyone investigating our non-existent police force. Or, God forbid, regulating the largest financial power in the world - hedge funds, or as they were known in the Roaring Twenties, "Stock Pools." I mean, self-regulation worked so well then, why mess with such a successful formula? It's not like the world could be plunged into a decade-long global depression by their misbehavior....
And of course, Harvey Pitt would agree, as he did on Bloomberg yesterday. No investigating the cops. That's bad. There's no need.
Again, years on the SHO list? Not a problem. Aguirre fired after big merit increase and glowing review. Elephant, what elephant?
Wall Street is circling the wagons. And they can afford the best. Expect the rhetoric to heat up, with outraged outcry over the notion that our ineffective regulators should be held to any standard above paper shuffling and inaction on the big issues.
And thank heavens for Grassley, who apparently, along with Specter, understands the scale of the larceny at play.
Which actually isn't hard, at all. Maybe Shelby should go back and read a bit on the Pecora hearings before his next rubber-stamp and back slapping session in the SBP?
Some days I feel like Jon Stewart, playing clips of our top brass caught in complete lies, as they try mightily to rewrite recent history. It's really all the same side of the same coin - a societal acceptance of the most onerous sort of crookery and dishonesty. In today's climate, I have a feeling Nixon wouldn't have faced impeachment over Watergate - he would have been instead offered a tell-all book deal, and had Oprah to the White House to do a multi-part special on how honest the system was, and how effective at protecting the population it had been.
We are watching real time as our financial system re-distributes the wealth of anyone stupid enough to participate in its rigged game. The most heinous and obvious crookery is glossed over, while our regulators count paper clips and count the minutes until they can be getting seven figure gigs attending conferences held by and for Wall Street.
But ya don't wanna fix it if it ain't broke....
Speaking of egregious breaches of ethics and insider trading rules, here's a clip of Jim Cramer speaking at a recent event, wherein he appears to describe obtaining non-public information from a broker. You know, because it's just the way things work. Go to about minute number two as he describes being given the partnership agreements for Enron - info the public didn't know and had no way of trading on - basically a textbook case of insider trading, described by a hedge fund manager.
Of course, this won't be investigated by anyone. Jimbo is a member of "the media" - thus, if he admitted to having a body in the trunk of his car, anyone investigating would be toying with his free speech.
Anyone see how out of whack this all is?