The SEC fucks up a lot. A whole lot. This is more or less a given. David Einhorn has been saying this for eons– from personal experience, having dealt with the brain trust in the case of Allied Capital–, as has Bernie Madoff who, from the jail cell in which he rots, made no bones about the fact that he was eternally grateful that the regulator operated at the intelligence level wherein it wouldn’t know not to stick its (collective) dick in a pencil sharpener. Still, for those of you who need just a little more proof, SEC inspector general David Kotz is happy to add some color.
About two miles separate the Securities and Exchange Commission’s headquarters in Washington from the offices of Allied Capital, a District-based private-equity company. But over the course of an 18-month government probe into whether Allied Capital overstated the value of its holdings, nobody from the regulator ever visited the firm to ask questions, according to a new, internal SEC review that raises questions about the agency’s oversight of the financial industry.
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As some of you may have observed, we’ve given Bank of America and Ken Lewis a lot of shit over the past year, most of it well-deserved. Since sometimes it’s hard to detect when we’re actually being sincere in our praise, let us just say that when we say Bank of America and its commander in chief are awesome right now, we absolutely mean it because holy case of Strawberry Hill have they outdone themselves. Here’s the response they elicited from Congressmen Edolphus Towns, after he subpoenaed their emails in an attempt to gain clarity re: why and how the Merrill Lynch deal went down. The best thing about Lewis and Co’s decision to send a fuck you message to the House Committee on Oversight and Government Reform by deluging the team with everything that passed through their servers is that they, of all people, can most convincingly play the dumb card. “What? You said you wanted our emails, didn’t you?”
In addition, many of the documents produced so far are clearly irrelevant to the committee’s investigation. My August 6 letter requested records “created between September 1, 2008 and January 16, 2009 that relate to the financial losses at Merrill Lynch or to Bank of America’s receipt of financial assistance from the United States Government.” You responded to this request by providing hundreds of pages of unrelated, extraneous information.
For example, you sent copies of numerous emails you received from your own employees expressing admiration for your “awesome” performance on 60 Minutes. You also included copies of emails alerting Bank of America employees to discounts at Wal-Mart, Target, and Costco; an announcement of the “Annual Pecan sale,” featuring “This Year’s Crop of Mammoth Pecan Halves”; and an invitation to attend a conference on investment in East Asia, written in Chinese. There were numerous other pages of obviously irrelevant material.
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