Harvey Pitt Loves Conflicts O' Interest

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Harvey Pitt has been named deputy attorney general of Alabama where he will be investigating "short sellers and false rumors involving Colonial BancGroup, actions designed to drive down the institution's stock price." CNB apparently approached Pitt about the gig knowing that rumor mongering and wicked short selling are favorite topics of the erstwhile SEC chairman and current private citizen, which he believes are "serious problems...[that have] led to a whole host of additional problems in the marketplace." Pitt also hilariously noted that he has been contacted by other firms known by those in the know to be short-seller targets, but has thus far been rebuffed because they're self-conscious about having their asses tapped (sayeth Pitt: "They don't want it known that they are the targets of short sellers").
The P-man's compensation for the job has been disclosed but even if he's being paid in Lehman stock the whole thing sure to pay off in spades. The plan is prettay prettay genius--make up some stuff up based on speculation and hearsay about malicious shorts being responsible for CNB's horrific performance (the bank's stock lost 53 percent of its value this year), and then take the case study to Cox as evidence that the SEC really needs to extend now-defunct emergency rule to all financial companies which would mean KA-CHING for Pitt's newly formed RegSHO.com. RS is a web-based real-time electronic stock lending and location service that matches traders with available stocks that can be borrowed for short sales and offers immediate data on the short-sell market. Obviously the biz would be made exponentially more profitable if the SEC expands and extends the rule, practically forcing Pitt and Co to charge customers for both locating and pre-borrowing.
One error in Pitt's flawless money-making scheme, however, is the matter of his partner, John Tobacco. Anecdotal evidence shows that he's a bit of a Tim Sykes (please refer to the last comment on this thread).
Call Him Deputy Attorney General Pitt [NYT]
CEOs Launch Web Site To Protect Short Sellers: Firm Aids Compliance With SEC Naked-Sale Rules [Washington Post]

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