• secbuilding


    SEC Staffers Have Made Remarkable Progress Re: Learning What Constitutes Appropriate Use Of A Work Computer

    If you had asked us two years or two months or two days ago if we thought that there would be a time in the near future when Securities and Exchange employees would not be getting reprimanded for watching porn on their work-issued computers, we would have said absolutely not. No judgment, but in our professional opinion, people do not go from, among other things:

    * Receiving “over 16,000 access denials for Internet websites classified by the Commission’s Internet filter as either “Sex” or “Pornography” in a one-month period”
    * Accessing “Internet pornography and downloading pornographic images to his SEC computer during work hours so frequently that, on some days, he spent eight hours accessing Internet pornography…downloading so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office.”
    *,,, and

    …to living a porn-free existence at l’office. Did we think they’d take baby steps toward that goal sure? But when you’ve tried to log on to your websites of choice, on average, 533 times a day, assuming weekends were worked, baby steps means getting yourself to a place where you can do a solid two hours of work each week without hitting up So you can imagine (and probably share in) our surprise to hear that, according to a probe by Interim Inspector General Jon Rymer re: “misuses of government resources,” the worst offenses one office was charged with claiming they needed iPads to do their jobs when really they just wanted to watch movies on them at home and going to hacker conferences without encrypting the data on their computers.

    Granted, it doesn’t look so great that the group that was running around with computers that didn’t even have anti-virus programs on their computers was the one that “is responsible for ensuring exchanges are following a series of voluntary guidelines…concerning computer audits, security, and capacity” but still, no ladyboyjuice while on the job– that’s huge.

    In a 43-page investigative report that probed the misuse of government resources, SEC Interim Inspector General Jon Rymer discovered that an office within the SEC’s Trading and Markets division spent over $1 million on unnecessary technology. The report also found that the staffers failed to protect their computers and devices from hackers, even as they were urging exchanges and clearing agencies to do just that. Although no breaches occurred, the staffers left sensitive stock exchange data exposed to potential cyber attacks because they failed to encrypt the devices or even install basic virus protection programs…On Friday Reuters reviewed a copy of the full report, which details an even broader array of problems, from misleading the SEC about the office’s need to buy Apple Inc products, to cases in which staffers took iPads and laptops home and used them primarily for pursuits such as personal banking, surfing the Web and downloading music and movies. The report says the staff may have brought the unprotected laptops to a Black Hat convention where hacking experts discuss the latest trends. They also used them to tap into public wireless networks and brought the devices along with them during exchange inspections…The report also found that some people who worked in the office had little or no experience with exchange technical matters.

    SEC staffers used govn’t computers for personal use – report [Reuters]
    Earlier: SEC Supervisor Surfed Tranny Porn To Cope With Stress Of The Job; SEC Official Who Surfed Tranny Porn To Deal With Stress Of The Job– Not Alone!;

    / Nov 12, 2012 at 1:53 PM
  • So that's nice then.


    JPMorgan May Soon Be Rid Of One Of Many Bear Stearns Mortgage Investigations

    Mortgage-backed securities are sort of conceptually simple – put mortgages in a pot, stir, sell […]

    / Nov 7, 2012 at 5:46 PM
  • News

    Securities And Exchange Commission To Make A Couple Calls Re: Vikram Pandit’s Breakup With Citi

    The Securities and Exchange Commission has launched a probe into the messy departure of Vikram Pandit as chief executive of Citigroup and whether the board of directors of the big bank properly disclosed his ouster, the FOX Business Network has learned. One person familiar with the matter says the SEC’s inquiry is informal and has not reached the level of a full-blown investigation. But it is a sign the SEC is clearly interested in the circumstances surrounding Pandit’s official “resignation” from the big bank. Those details have been in dispute since the October 16 announcement. Both Pandit and Citigroup chairman Michael O’Neill have said in interviews and during conference calls with analysts that the decision was Pandit’s to leave the firm. [FBN, earlier]

    / Oct 23, 2012 at 6:59 PM
  • Yorkville President Mark Angelo in happier, though still pensive, times


    The SEC Is Pretty Sure It’s Better At Investment Valuation Than At Least One Hedge Fund

    The SEC has a thing called the Aberrational Performance Inquiry that runs a screen of […]

    / Oct 17, 2012 at 1:43 PM
  • News

    Fabulous Fab To Take The Stand Next Summer

    Three years after Fabrice Touree was sued by the Securities and Exchange Commission for allegedly misleading investors, the (soon-to-be) Dr. of Economics and Love will go to trial, assuming finals don’t pose a conflict.

    U.S. District Judge Katherine Forrest in Manhattan set the July 15 trial date at the end of a hearing in which an SEC lawyer argued that she should reinstate some claims against Tourre that another judge dismissed earlier in the case. Last year, U.S. District Judge Barbara Jones threw out some of the SEC’s claims after Tourre argued that he couldn’t be held liable under U.S. securities law for transactions that occurred outside the country. The SEC argued today that the claims should be reinstated because of a recent appeals court ruling that applied a broader definition of “domestic securities transaction” than the one used by Jones. Tourre’s case was assigned to Forrest last week.
    Tourre, 33, who is studying for a Ph.D. in economics at the University of Chicago, wasn’t present in the courtroom today. His lawyer, Pamela Chepiga, told Forrest that she will check with her client to make sure there is no conflict between his exams and the trial date.

    Goldman Sachs’s Tourre Gets July 15 Trial Date [Bloomberg]

    / Oct 12, 2012 at 4:59 PM
  • It's a dark pool of lava, or something, whatever.


    Dark Pool Operator Fined For Letting Its Computer Operator Store Data On The Wrong Computer

    Much success in financial innovation is due to coming up with a sexy name; “dark […]

    / Oct 4, 2012 at 4:59 PM
  • Your money is safe with this lion, who is unfamiliar with the word "homophone"

    Hedge Funds, News

    SEC Advises Investors To Read Hedge Fund Documents, Especially The Secret Ones Containing All The Fraud

    I think if I were running a small hedge fund far from prying eyes, every […]

    / Oct 3, 2012 at 5:35 PM
  • Isn't it weird that robot traders are sort of perceived as dorky math-nerd robots but actual traders all, like, played lacrosse? This robot probably plays lacrosse.


    Broker Fined For Helping Some Robots Rip Off Other Robots

    What is your model of the SEC’s recent crackdown on the naughty forms of high-frequency […]

    / Sep 25, 2012 at 5:57 PM
  • FYI, never search Google Images for "computer penis"


    NYSE Fined For Selling Product That Was Too Good

    The standard illustration of the efficient markets hypothesis is the thing about the economists and […]

    / Sep 14, 2012 at 3:01 PM
  • News

    There’s Already An Investment Strategy Called ‘Buckets Of Money’

    I just thought you should know. To those of you who had your heart set […]

    / Sep 5, 2012 at 6:41 PM
  • If I'm ever named SEC commissioner, I will totally pose for my official photo in front of a Cayman Islands flag. OH HOW WE'LL LAUGH.


    Bloomberg Reveals That SEC Commissioners Have Friends (Who Are Former SEC Commissioners)

    Bloomberg has a big article today about former SEC commissioner Annette Nazareth’s current work as […]

    / Sep 5, 2012 at 5:51 PM
  • Unrelatedly, I'm not sure I'd invest with DEF no matter what their fees.


    SEC Finds Retail Investors Too Stupid To Invest Without SEC Assistance

    This is boring but short so focus for a minute, there will be an easy […]

    / Aug 30, 2012 at 5:35 PM
  • Tell her all about it.

    Hedge Funds

    New SEC Rules Practically Require Hedge Funds To Advertise On Dealbreaker

    The day when you can advertise your hedge fund on Dealbreaker creeps ever closer, so […]

    / Aug 29, 2012 at 3:48 PM
  • The letter is very good, you can tell that someone at the SEC had fun writing it and then someone else had less fun editing it to remove things like "look you pinhead, ..."


    SEC Not Going To Let Bankers And Research Analysts Nod Hello To Each Other In The Hallway Just Because Congress Told It To

    The SEC had a feisty week last week, telling off Congress with cheery abandon. Darrell […]

    / Aug 27, 2012 at 6:08 PM
  • News

    Bonus Watch ’12: SEC Whistleblowers

    A whistleblower who helped the Securities and Exchange Commission stop a multi-million dollar fraud will […]

    / Aug 21, 2012 at 4:49 PM
  • He's personally affronted


    SEC Wants Activist Hedge Funds To Share With The Rest Of The Class

    Financial markets are basically about information asymmetries, real and imagined, and financial regulation is largely […]

    / Aug 15, 2012 at 6:15 PM
  • John Stumpf hasn't read the PPM either. But who could resist that face?


    Wells Fargo Is A Little Sorry That It Sold Securities It Knew Nothing About

    Don’t do this: One particular municipal entity had been a customer of Wells Fargo, or […]

    / Aug 14, 2012 at 5:02 PM
  • This money is just so happy to be hanging out with its friends, the other piles of money.


    Money Market Funds Can Lose Money, Just Not Your Money

    Money market mutual funds are among other things “mutual funds,” meaning that they’re piles of […]

    / Aug 9, 2012 at 6:16 PM
  • Mary Schapiro: probably not working at Goldman Sachs soon, but who knows?


    SEC Lawyers Annoy Their Way Into The Hearts Of Private-Sector Employers

    So let’s say you’re a bank and, redundantly, you are in trouble with the SEC. […]

    / Aug 6, 2012 at 12:22 PM
  • Jed Rakoff is (1) the judge in the case and (2) delightfully smiley.


    Federal Jury Doesn’t Want SEC To Take This The Wrong Way, But It Thinks This Citi CDO Case Is Bullshit

    So remember when Citi did that thing that was all the rage in 2007 where […]

    / Jul 31, 2012 at 5:29 PM
  • Buzzfeed's 25 Photos of Mitt Romney Looking Perfectly Normal: Amazing


    Mitt Romney, Bill Ackman Undone By Forms

    Let’s talk about two tenuously related stories about government filings, why not. I don’t have […]

    / Jul 12, 2012 at 5:30 PM
  • Hedge Funds, News

    Phil Falcone Is Preparing For Trial On SEC Fraud Charges By Alienating All Of His Witnesses

    Even if Wilbur doesn’t testify I’m pretty sure that a trial of the SEC/Falcone case […]

    / Jul 5, 2012 at 5:42 PM
  • News

    Phil Falcone’s Alleged Piggish Behavior Made Him Some Enemies

    If you knew nothing about Phil Falcone but what you read in the SEC’s assortment […]

    / Jun 27, 2012 at 4:30 PM
  • News

    Market Volatility Soon To Be Just A Distant Memory

    So, um, news today, not great, huh? So no surprise that stocks are down. It’s […]

    / Jun 1, 2012 at 1:55 PM
  • News

    Chesapeake’s CEO Inconvenienced By Having To Find New Creative Ways To Exploit Shareholders

    You may remember that Chesapeake Energy got some bad press last week for giving its […]

    / Apr 26, 2012 at 4:07 PM
  • News

    The Securities And Exchange Commission Requests A Little Credit Where Credit Is Due, Please!

    Yesterday, the Wall Street Journal ran a front page story reporting that the Securities and Exchange Commission had “blown” the cover of whistleblower Peter C. Earle. The article claimed that Earle, a former employee of Pipeline Trading Systems turned government informant, had his identity “inadvertently” revealed through a “gaffe” on the part of an SEC lawyer, who showed a Pipeline exec “a notebook from the whistleblower filled with jottings about trades, calls and meetings.” The executive was said to have recognized Earle’s handwriting and told his colleagues, who had previously suspected but did not know for sure that “Pete’s the whistleblower.” The story was easy to believe because if you’ve been keeping up with the SEC over the last number of years, you know that this sound exactly like something they’d accidentally do. Except that whereas the regulator fully copped to, for example, missing Madoff while trying to access 385 times/day, it says that this accusation? Is bull shit. It did not “inadvertently” “blow” anyone.

    Here’s its strongly worded letter to the Journal saying as much:

    The Securities and Exchange Commission in no way exposed Peter Earle as a whistleblower, and our use of his notebooks in an investigative deposition was neither “inadvertent” nor a “breach” or “gaffe” (“Source’s Cover Blown by SEC,” Page One, April 25). It was a deliberate decision, which SEC lawyer Daniel Walfish discussed in advance with his supervisor, who was present for the deposition in which the notebooks were exhibited. Nor did the fully authorized use of the notebooks in any way compromise Mr. Earle or the integrity of the SEC’s investigation of the Pipeline Trading Systems matter.

    Although it was widely known among executives of Pipeline and Milstream Strategy Group that Mr. Earle had approached the SEC after he was terminated from Milstream—a fact volunteered by several witnesses and acknowledged by Mr. Earle long before any use of his notebooks—the SEC declined to confirm his identity and still treated his status as a cooperating witness as confidential. The SEC made sure to obtain all of the notes of the approximately six Milstream traders, and in the SEC’s deposition of Gordon Henderson (the supervisor of Mr. Earle and the other traders), the SEC used other traders’ notes along with those of Mr. Earle. The use of these traders’ notes—highly relevant evidence prepared in the ordinary course of their work at Milstream—in no way revealed whether Mr. Earle or any other trader was or was not cooperating with the SEC.

    George S. Canellos


    New York Regional Office

    U.S. Securities and Exchange Commission

    New York

    SEC Did Not Blow Source’s Cover [WSJ]
    Earlier: SEC Burns Whistleblower In The Most SEC Way Possible

    / Apr 26, 2012 at 1:25 PM
  • News

    SEC Burns Whistleblower In The Most SEC Way Possible

    In recent years, the Securities and Exchange Commission has had its share a fuck-ups come to light. The regulator took a pass on heeding the warning signals by Bernie Madoff himself that he was running a Ponzi scheme, it chose to go after David Einhorn rather than Allied Capital when the hedge fund manager suggested all was not right at the company, and yesterday, it was announced that the Commission is suing Egan-Jones for lying about having rated 150 ABS bonds on an SEC application four years ago (in reality it had rated zero), information that could have been fact-checked at the time but was not because there were new clips on,, and to watch. Today the team scored a new victory when it outed an informant.

    Federal securities regulators, in a sensitive breach, inadvertently revealed the identity of a whistleblower during a probe of a firm that ran a stock trading platform. The gaffe by the Securities and Exchange Commission occurred during an investigation of Pipeline Trading Systems LLC when an SEC lawyer showed an executive who was being questioned a notebook from the whistleblower filled with jottings about trades, calls and meetings. The executive says he recognized the handwriting. Pipeline, which didn’t admit or deny the allegations, was the subject of a page-one Wall Street Journal article earlier this month. The article didn’t name the whistleblower, but he has now agreed to be publicly identified. He is Peter C. Earle, 41, a former employee of a Pipeline trading affiliate. Mr. Earle said he was “disappointed” the SEC took steps in its probe that ended up disclosing his identity to Pipeline. The SEC confirmed showing the notebook to an executive of the business it was investigating. SEC officials said there is always a risk a whistleblower’s identity might be disclosed during an investigation, but its practice has been to avoid unnecessarily revealing an informant’s identity.

    The person shown the notebook (in a November 2010 SEC interview), Gordon Henderson, was the head of Pipeline’s trading affiliate, Milstream Strategy Group. He said in an interview that he previously suspected Mr. Earle was an SEC informant. Mr. Henderson’s desk was near Mr. Earle’s in Milstream’s New York office, and he said he recognized Mr. Earle’s handwriting in the notebook.

    Related: “Mr. Earle said he made other internal complaints about trading, and was fired on April 3, 2009. Mr. Henderson said the reasons for dismissal included poor performance and a belief Mr. Earle was having an affair with the wife of another Milstream trader at the time. Mr. Earle denied both allegations, calling the notion of poor performance ‘ridiculous.'”

    Source’s Cover Blown By SEC [SEC]

    / Apr 25, 2012 at 11:55 AM
  • News

    Quo usque tandem abutere, Egan-Jones, patientia nostra?

    Lawyers all know the old case in which a guy sued another guy over a […]

    / Apr 24, 2012 at 6:00 PM