Senators Say SEC Likely Involved in Cover-Up, Obstructing Justice

Followers of this blog will experience absolutely no surprise when they read the following article, in which Senators Grassley and Specter basically say that the SEC appears to be a den of lying, thieving pit vipers more interested in running interference and covering-up Wall Street felonious activity than in doing its job to protect investors.

In fact, most thinking upright bipeds came to that conclusion years ago when they understood the import of Reg SHO's grandfathering provision, or saw the SEC's Christopher Cox kibosh the subpoenas into the activities of some connected journalists, or allow the two year stock manipulation in cases like NFI and OSTK.

But it is always nice to see the mainstream press figure it out, albeit years late. And buried as far back as it can be buried.

This article about says it all.

My favorite takeaway:

"...extraordinarily lax enforcement by the SEC and ... may even indicate a cover-up by the SEC," Specter said. The SEC's handling of the matter, including a review of the attorney's allegations by the agency's inspector general, "has all of the earmarks of the obstruction of justice," he said."

Wow. Not much to quibble with there. The nation's top securities cop is basically either so incompetent that it can't police a subway turnstile, or so crooked that it makes 1920's Chicago look like a priory.

Is that bad? The country's securities regulator appears to be involved in a COVER-UP (hmmmm, which blog has been using that term to describe the SEC's actions since day one?) and seems to be obstructing justice rather than punishing wrongdoing?

"All the earmarks of obstruction of justice."

Is that like the local sheriff being caught dead drunk and covered with blood, wielding a knife over the body of a butchered victim, screaming, "Die Die Die!!!" has all the earmarks of a suspicious death?

How bad does this have to get before a special prosecutor is named, and the self-protection engine at the SEC is exposed for what it is? Or are they going to allow the agency whose latest investigation has resulted in an apparent cover-up, pretend to investigate its handling of that cover-up, in the hopes that this time it won't have all the earmarks of obstructing justice?

Folks, the NY press is busy arguing for less regulation, pretending that the reason Wall Street is losing business faster than a Hummer burns premium is due to too much restrictive regulation, rather than because its cops' actions are confirmation that crime pays handsomely, to anyone with a working cerebral cortex.

Jim Cramer basically wipes his backside with an SEC subpoena, understanding that it is about as serious as kleenex because the Commission is bought and paid for, and yet we are supposed to keep investing in the market so the hedge funds who prowl the markets like bucaneers can mug and rob us with brazen impunity, fearless of retribution of any sort.

This is nuts.

How long does this have to go on, and how obvious does it have to be, before even a Wall-Street financed Congress figures it out, and brings in adult supervision to clean up the cesspool?

Maybe the SEC can "study Congress' conclusions" for a year or two, as they have with the evidence of blatant thievery from naked shorting, while they do nothing and allow investors to be brutalized out of everything? That seems to be popular there. Do nothing while holding the door of the getaway car. And if you need to engage in a little Watergate-style cover-up and obstruction of justice, hey, why not?

I have been writing fewer blogs over the last few weeks because I am basically sickened by the blatant corruption evidenced in every move of the regulators and the market. I feel like I have said it all. Over and over. There isn't much left to say. "Look, another investor having his life savings stolen, while the country loses another business, so some pencil-necked miscreant on Wall Street can update his G-5 interior!" What more needs to be said?

And the media pretends that it isn't happening. None of it. Soviet Russia would have been green with envy over the mind control and media lock-down on the truth in play here. It is really the triumph of capitalism that our media can be more censored than a dictatorship. And yet, try reading anything about this. Or about the SIA spreadsheet showing countless billions FTD and FTR. Or the massive ongoing manipulations by a handful of well known hedge funds and prime brokers in stocks that have been on the SHO list for years.

Why is that? From the article:

"These findings paint a picture of a troubled agency that faces serious questions about public confidence, the integrity of its investigations" and its ability to protect investors large and small evenhandedly, Grassley said. The SEC "circled the wagons and it shot a whistle-blower," he said."

That is political-speak for, "They are a bunch of crooked rat bastards incapable of performing their job."

Time for a special prosecutor, just as in 1933, when the Pecora hearings resulted in the creation of the SEC. Fitting that a special prosecutor should be called in to dismantle the agency, and prosecute the miscreants there who believe themselves to be above the rule of law.

Get the emails cranked up. It's time.