First, let me say that I find the Motley Fool about as useful for meaningful business coverage as I find Ranger Rick useful for meaningful information on epidemiology.
What was once a reasonable idea, has devolved into another mouthpiece for Wall Street affirmations and propaganda dissemination.
That actually covers most of the NY financial press, so they are in good company.
Occasionally though, someone will alert me to some jabber that they believe I might find relevant or entertaining - usually erroneously, but what the heck, everyone's a critic.
The Fool jumped on the Gradient/SEC bandwagon today, stretching the facts to arrive at some startling conclusions. You can read the ruminations here, if you think they might be of interest.
We agree on one thing. This isn't receiving nearly enough coverage.
However, I think 'ol Seth won't like the rest of this piece. I can actually guarantee it.
Word out of the Beltway today is that Gradient's PR flacks are working overtime to spin this as the SEC clearing Gradient of wrongdoing.
Tut tut. That would be nice, wouldn't it? I mean, if one simply ignores, as has Seth and the Fool, Senators Specter and Grassley concluding that the SEC is either incapable of running a coherent investigation, or is a tool for Wall Street cover-ups and obstruction of justice. I suppose Seth feels that the SEC terminating the investigation should be heralded, but the findings of the Senate Judiciary don't merit attention.
To which I say, hmmmm, how odd, one of the biggest stories of the year being the watchdog of the markets engaging in a cover-up for Wall Street powerhouses, and not a word out of most of the NY financial press, or the Motley Fool. Isn't that something? That is actually hard fact, recently breaking big news, and yet Seth goes deaf and dumb on it. Big story. No coverage to speak of. How very odd.
But a non-public company in flyspeck Arizona has their investigation terminated, surprising nobody, and it is worthy of his mighty quill's furious machinations.
Here's my take:
I hear the spin is that the SEC couldn't corroborate the stories of the, what, 8 witnesses who testified under oath to tell the truth, and nothing but the truth, so help they God, and under penalty of perjury.
Just couldn't prove it true or false, so gave up. You know, because knowing whether they were all lying on the record is so, well, uh, difficult, and stuff.
Which doesn't surprise me given the way they went about the Aguirre investigation, which consisted of cover-up and obstruction of justice, per the good Senators.
Here are some reasonable questions that the SEC and Seth and the rest of the suck-up financial press have failed to ask or answer...but perhaps some of you can ask them, and see what their responses are, presuming they don't just pull a DTCC and stonewall you? I don't particularly care much, but it would be amusing to see them twist and backpedal like boneless Chinese twin acrobats.
1) The witnesses testified to specific telephone conversations where hedge funds, research writers, and "reporters" were on conference calls and in constant telephone communications, colluding to fabricate research and time short positions to maximize the financial gain to be had by the dissemination of the "research" findings. Did the SEC ever pull the telephone records of those hedge funds, research writers and "reporters" to see if they were actually on those calls?
2) If so, what did they find? Were they all in constant phone and IM communication, or was it a fabrication?
3) If a fabrication, is the SEC planning to go after the affiants criminally via the DOJ for committing perjury? They should. Unless they are afraid that the truth will be used as the defense, and the records introduced into the record, where they will have been in fact on the calls - making the SEC look as honest as the petroleum official in the latest email I got from Nigeria.
4) If the hedge funds, research firm and "reporters" were in fact on the line when the affiants claim, is the SEC's position that just isn't incriminating enough? As in, "Well, we don't have video of the hedge fund guy laughingly asking which bank account to transfer the offshore funds to for the reporter and researcher for writing the hatchet job, so barring that, no proof is enough proof?" Or, "How can we really know anything, really? They could have been exchanging recipes, or chitty chatting about the weather - it doesn't necessarily mean they were involved in a RICO-style collusive criminal scheme, that they repeated over and over and over with multiple companies on multiple occasions...I mean, all those affiants could just be bad people, or possessed by demons, or confused....?"
5) Did the SEC ever do anything besides ask Gradient if they had been bad, and when they said no, take them at their word? If so, what did they do that the Fool and the Post and the rest find so compelling? Or did they have a list of hedge fund personnel with too much "juice" to interview, as in the Aguirre matter? Did they interview any of the people accused of being bad? All of them? None? We know that Cox couldn't quash the subpoenas to the journalists fast enough, so barring pulling their phone and email records, how did they go about determining that what is sworn testimony, is actually unknowable for even marginally skilled investigators - presuming the SEC has any left who haven't been fired when they get too close to a bigwig?
My take is that discovery in the lawsuits is going to show what the Senate already knows - that the SEC is a petty, corrupt, vindictive tool of special interests on Wall Street, used as an attack dog against public companies targeted by large hedge funds for bear raids, and as an obstructionist enabler by the brokerage interests on Wall Street - passing rules that clearly violate the letter and spirit of the 1933 and 1934 Acts so that Wall Street can rob the rank and file blind.
That the media machine has both ignored that the SEC should be getting the cuffs put on them now - after Grassley and Specter basically came out and called them lying liars lying about their lying - as well as celebrated the predictable and ritualistic throwing-in-of-the-hardly-used towel, merely confirms how badly broken this system is. I mean, that's a tall order, that kind of selective blindness. Ignore the SEC is bent and being called bent by the Senate Judiciary, while claiming the bent SEC's dropping an investigation they publicly killed before it could even get a week old means something other than the obvious.
My back hurts just from imagining the contortions that requires.
I wish I could tell you that this isn't exactly what it looks like - that the media, Wall Street, the regulators, and much of government is involved in a massive abuse of the citizenry they are hoping we are all too stupid or preoccupied to recognize as such.
But I can't. It is. We as a nation lose. And the direction from here is down, unless this ship gets turned around. Which apparently most of the stewards are reluctant or incapable of doing.
On another note, not everyone is so busy watching the boob tube or wondering what killed Anna-Nicole or buying poorly designed and built 10MPG SUVs, that they haven't noticed the theft of a generation's wealth. This letter at the SEC site is a great example that what everyone in the media and on Wall Street and at the SEC is busy pretending isn't obvious, is, in fact, completely obvious to many thinking upright bipeds.
That the SEC has delayed doing what they should have done for years, namely fixing SHO so it complies with the 1934's mandates (not options or hints or suggestions or, "hey, if you get around to it after all your important stuff is done" advice) is yet more evidence that we are the tipsy 18-year old cheerleader, and Wall Street is the escaped-from-prison-felon with an amorous agenda and a precocious style. And the SEC is offering him coke and tequila, and telling him we're just asking for it.
Nice, huh?
And that's the tame version.
What's it going to take to get a special prosecutor and some hearings? Do they have to find Patrick's head stuck to his grill like a hood ornament with, "Don't mess with Wall Street" scrawled across the windshield before they understand how out of control this has gotten? I mean, Keerist, how frigging huge and obvious and wrong does this have to get?
BTW, if you feel that these little blog trifles are of merit, note the Digg It button at the bottom right of your screen. Take out a second and Digg these blogs - they get far wider coverage that way, which should alert more people to the situation, which should get even more folks Digging it, and so on.