Shredding Documents Is Always The Right Way to Go
An enforcement lawyer at the Securities and Exchange Commission says that the agency illegally destroyed files and documents related to thousands of early-stage investigations over the last 20 years, according to information released Wednesday by Congressional investigators.The destroyed files comprise records of at least 9,000 preliminary inquiries into matters involving notorious individuals like Bernard L. Madoff, as well as several major Wall Street firms that later were the subject of scrutiny after the 2008 financial crisis, including Goldman Sachs, Lehman Brothers, Citigroup and Bank of America.
The S.E.C. is the very agency that is charged with making sure that Wall Street firms retain records of their own activities, and has brought numerous enforcement cases against firms for failing to do so.
The agency’s records were routinely destroyed under an S.E.C. policy, since changed, that called for the disposal of records of a preliminary inquiry that was closed if it did not get upgraded to a formal investigation, according to Congressional records and people involved in inquiries into the matter. The agency believes that both the original policy and the new rules comply with federal document-retention laws.
John Nester, an S.E.C. spokesman, said that while the agency was not required to retain all documents, it changed its policy last year regarding destruction of files for “matters under investigation,” the category of initial inquiry by the S.E.C.’s enforcement division that is the subject of the current scrutiny.
Changes were made to the S.E.C. policy after questions about the document destruction were raised in early 2010 by Darcy Flynn. Mr. Flynn, an employee of the S.E.C.’s enforcement division for 13 years, began a new job in January 2010 helping to manage the disposition of records for the division. Mr. Flynn, who continues to work at the S.E.C., has sought protection under federal whistle-blower laws.
The document disposal, which was first reported by Rolling Stone magazine on Wednesday, is the subject of inquiries by the Senate Judiciary Committee; the National Archives and Records Administration, which oversees laws governing federal agency records; and the inspector general of the S.E.C., according to the records and to people involved in the investigations.
Thank god for Taibbi and Rolling Stone who explain what this means:
Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – “Hey, chief, didja know this guy had two wives die falling down the stairs?” No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation’s worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – “18,000 … including Madoff,” as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.
Under a deal the SEC worked out with the National Archives and Records Administration, all of the agency’s records – “including case files relating to preliminary investigations” – are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term “Orwellian,” devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation. Amazingly, the wholesale destruction of the cases – known as MUIs, or “Matters Under Inquiry” – was not something done on the sly, in secret. The enforcement division of the SEC even spelled out the procedure in writing, on the commission’s internal website. “After you have closed a MUI that has not become an investigation,” the site advised staffers, “you should dispose of any documents obtained in connection with the MUI.”
Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.
The widespread destruction of records was brought to the attention of Congress in July, when an SEC attorney named Darcy Flynn decided to blow the whistle. According to Flynn, who was responsible for helping to manage the commission’s records, the SEC has been destroying records of preliminary investigations since at least 1993. After he alerted NARA to the problem, Flynn reports, senior staff at the SEC scrambled to hide the commission’s improprieties.
I’m beginning to doubt the rumors there was a “red phone” inside the SEC that could be called by those in the know to get investigators to back off. It would just be redundant.
Like shutting down the protesters cell phones in Opbart, this is just the natural evolution of America into a police state on its way to NLS collapse.
Assanges system killer is WAI.
the “freed” market, not so much.
:)
August 18th, 2011 at 11:28 am
Those responsible for this policy at the SEC need to hang.
August 18th, 2011 at 11:33 am
Ummmmmmm. This has been going on for twenty frickin’ years, and has
I take it “since changed” refers to since the Obama admin took over. That sneaky low life corporatist. How dare he reverse a Clinton admin policy like that. Uppity.
August 18th, 2011 at 11:34 am
The 2009 prelim report on Goldman Sachs, could have been because of the settlement GS did with the SEC. I’d like to know if this is the case.
August 18th, 2011 at 11:34 am
Some criminals are more equal than others.
Nice racket they got going.
August 18th, 2011 at 11:39 am
@Maude:
Seems to me, as logic would have it, that reaching a settlement on a dispute with a GS, or any other company would render moot any prelim investigation reports. Whether destroyed or not.
edit – not knowing the details on the case or cases, it is impossible to say for sure.
August 18th, 2011 at 11:41 am
OT, but it looks someone seems to want to take the title ‘King of the Oklahoma White Trash Rednecks’ away from Jim Inhofe:
Tom Coburn –
Coburn again –
August 18th, 2011 at 11:44 am
It has all happened before:
That’s cases, not prelimiary inquiries. Time to look forward, I say.
August 18th, 2011 at 11:49 am
Can anyone think of an example, say, involving a number of documents stored say, in a basement at the Met since 2006 that proved rather interesting when looked at after a long period of being dismissed as nothing special? Not be be obvious or anything.
August 18th, 2011 at 11:51 am
I would think that some of this would depend on what they mean by “preliminary inquiry” when it’s the kind of job of the SEC to kind of go poking around all of the time.
August 18th, 2011 at 11:52 am
@ stuck
yes, since changed after a whistleblower came forward to other agencies and congress a year into the administration.
i realize dates and numbers confuse you, but this was a thoroughly bipartisan (obama included) plutocratic conspiracy.
August 18th, 2011 at 11:52 am
@General Stuck:
That’s what I thought and there would have been a final report. I get a tad nervous when Taibbi goes on the warpath. He likes to tarnish Obama.
August 18th, 2011 at 11:54 am
@aisce: well…the Holy Freed Market just failed. how do you change a system that America, and indeed, the global economy is wholly dependent on?
Ans. very, very carefully.
August 18th, 2011 at 11:58 am
@Maude: Taibbi is an equal opportunity tarnisher.
August 18th, 2011 at 11:59 am
@aisce: I know, because he could have tortured the whistle blower and left the policy in place.
August 18th, 2011 at 12:01 pm
@aisce:
A year into a new administration is nothing, as it takes that long just to get new appointees confirmed and for them to evaluate what the previous administrations were up to in any particular government agency.
And I and others have been posting all sorts of recent examples of Obama stepping up investigations and prosecutions in recent months, from fraud cases hard to prove, that take a long time to investigate. So you are full of shit, as always, and a condescending fact challenged fruit loop.
The point remains that the policy was changed under Obama, that had been in effect for 20 years, regardless of any recent whistleblowing.
August 18th, 2011 at 12:02 pm
Shall we make book on what the SEC inspector general does? I’ll put $5 on Whitewash.
August 18th, 2011 at 12:04 pm
@aisce: Irony on the ground, abounds.
August 18th, 2011 at 12:05 pm
Well, this information goes a long way in explaining why Harry Markopolos had such a difficult time getting the SEC to investigate Madoff.
August 18th, 2011 at 12:07 pm
Wow, pre-emptive ball washing. Who’d a thunk? Meanwhile in reality:
“Since changed” as in the last month or so. But yes, I’m a hateful firebagger for pointing out the obvious. I also love how some of us have been lectured by all you financial geniuses how “what they were doing was legal, if shameful” as a way of insulating the administration from their tepid (at best) record of going after the people who crippled this economy while “looking forward”. Sure, the DoJ has some cases, but this, the SEC basically wiping out investigations and histories? Yes, please, tell me again how most of these scum-sucking assholes on Wall St. may have been abusing the rules but not breaking them.
Oh well. Look forward! Let’s not quibble over who gamed the system, what watchdog agency aided and abetted and how many of our Galtian overlords are living large after repeatedly breaking the law.
We live in a banana republic. It’s a fucking joke.
August 18th, 2011 at 12:07 pm
@Samara Morgan:
13 and 14, yup.
August 18th, 2011 at 12:07 pm
Does Taibbi have a Pulitzer yet? He ought to. Tho I do miss the giant bat days of Rolling Stone journalism.
August 18th, 2011 at 12:09 pm
@Jay B.:
Go ask Bill Clinton why a lot of what Wall Street did was legal.
We do not grow bananas here.
August 18th, 2011 at 12:10 pm
@Thoughtful Black Co-Citizen:
It’s a riot, claiming Obama was part of a “plutocratic conspiracy” during his first months in office, and came clean from news that the SEC was a fucked up useless corrupt agency that has been well known by everyone, and my parakeet for many years.
August 18th, 2011 at 12:10 pm
Another great piece by Taibbi, with just one quibble. Nowhere in this article should there be the use of the word “amazingly”.
August 18th, 2011 at 12:11 pm
so causality is a foreign concept to you?
August 18th, 2011 at 12:11 pm
@General Stuck:
And you are hilariously and stupidly wrong. The fucking files—this is the story here genius—are gone. Things that could be used in investigations, because they are the products of investigations, have been deleted. Up until a month ago.
Key takeaway:
Could it be the reason fraud cases are so hard to prove is that the government helped make it that way?
August 18th, 2011 at 12:13 pm
@General Stuck:
LINK
August 18th, 2011 at 12:13 pm
@Jay B.:
Why yes, yes you are. The truth will set you free.
August 18th, 2011 at 12:13 pm
Hm. Obama has made one appointment to the structurally bi-partisan SEC Board of Commissioners, i.e. the current Chair. Mary L. Schapiro. Wiki has the background, including this:
Mutatis mutandis.
August 18th, 2011 at 12:16 pm
I’m sure the old SEC records on the investigation of GW Bush and his insider trading in Harken Energy are gone. That’s one I know something about as I was an enforcement attorney at the SEC at the time. There was a very active investigation until it was killed by the higher ups in the agency. George HW Bush was president at the time and word was the ‘shut it down’ orders came directly from the WH.
August 18th, 2011 at 12:16 pm
@Dennis SGMM:
I said confirmed AND needing time to figure out what was going on in any agency. So you are going to claim Obama was part of this “plutocratic conspiracy” according aisce, then suddenly came clean and changed the policy in place for twenty fucking years, and hang your hat on one case of deleted files for a company (GS) that reached a settlement with the Obama administration.. Really?
So does anyone know when actually the policy was changed within the SEC?
August 18th, 2011 at 12:18 pm
Rush to judgment based on incomplete information much, y’all?
August 18th, 2011 at 12:19 pm
Mutatis mutandis, panties separandis
August 18th, 2011 at 12:19 pm
Amazing. The government destroys the files on investigations of the people who have destroyed the global economy and you still think there’s some justification because Bill Clinton says it’s all on the up and up? Seriously? This shows rot and illegality at the core of our entire system. It has been totally gamed. The elite have a completely different standards of rules and laws than we do. This double standard is transparently obvious, yet you still want to make the hilariously dumb claim about what, rule of law? Financial regulation? The unimpeachable wisdom of Bill Clinton?
Banana. Republic.
August 18th, 2011 at 12:20 pm
i just don’t see what’s the point in pretending that every administration in the last thirty years hasn’t had a vested interest in abetting institutional financial fraud? present administration included.
do you think the SEC really wants to do its purported job? that even if they were theoretically motivated, that the realities of what it would entail don’t scare the fucking shit out them?
like lt. daniels said so cogently, “you start following the money, you don’t know where you’ll wind up.”
August 18th, 2011 at 12:21 pm
@wilfred:
Wilfred, don’t you know it is considered impolite at BJ to mention anything about 9/11 that doesn’t smell or look right? Best to move on, look forward, not back, blah blah blah…
August 18th, 2011 at 12:22 pm
@Jay B.:
Don’t be a hyperventilating idiot. I am only saying that to hang this rancid policy onto the Obama administration after one year in office, that was the administration that ended the policy, is a crock of shit.
And fraud cases are hard to prove, even under the best circumstances. The Obama DOJ is far and away been investigating and bringing charges in recent months, way beyond anyone else the past twenty years. Even with the fact that previous administration shredded pre lim reports.
You comment, as usual, is full of hyperbolic mush and polemic argument.
August 18th, 2011 at 12:23 pm
That’s what happens when the fox guards the henhouse.
Pretty sad.
August 18th, 2011 at 12:23 pm
Damn, I just read this. HOLY SHIT. Our overlords are a bunch of douchbags.
Meanwhile, Elisabeth Warren’s campaign site is up. I might actually make a donation.
August 18th, 2011 at 12:23 pm
@Maude:
It is awesome that you are so protective of your biases. God forbid chips fall where they may.
August 18th, 2011 at 12:24 pm
@General Stuck:
Was there one word in my post about Obama being a a part of any plutocratic conspiracy? Did I mention GS? No? Then what are you going on about? I merely referenced the fact that Obama’s appointee for the SEC chairmanship was confirmed within seven days of his inauguration. Yes, it would take any newly-confirmed appointee time to get into the job. At what point do we decide that the chair had enough time to determine that there was wholesale shredding of documents going on?
August 18th, 2011 at 12:25 pm
I’m never sure why the invocation of Bill Clinton is supposed to stand in as the be all end all for any critical topic.
Are we supposed to nod sagely, mutter incantations under our breath while performing a ritual handshake and then move on to another topic?
August 18th, 2011 at 12:26 pm
@burnspbesq:
Rush to what? It’s illegal. There’s not much dispute about that, at all. It took a whistleblower to turn attention toward it. The illegality benefitted the people who run (and have ruined) the global economy. It was done by the federal government who has, for the past 30 years, geared its efforts to enriching the elite. None of this is remotely controversial.
2010, you fucking moron. It’s in the fucking article. Because of the whistleblower, not any reform by the administration. He told Congress about it last month.
August 18th, 2011 at 12:27 pm
These were investigations by an administrative agency. Among other things, this means very little, if any, filtering of data for reliability or hearsay, and very little due process rights for those under investigation. It is entirely right and proper that such preliminary investigations, if not followed up, ought to be shredded.
It sucks, now that the economy has been ravished by the bankers and insider traders, that the evidence is gone. But the problem there is the GOP control of the administrative functioning of agencies like the SEC for most of the last 30 years, not the specific file retention policies of the SEC.
August 18th, 2011 at 12:27 pm
yes, when a career employee went running to a different supervisory agency (the national archives) and blew the whistle on his agency doing the dirt.
you’ll notice that the president, the white house, or any of his political appointees are involved in this story. that’s usually the way whistleblowing goes.
and now the story is blowing up because a republican senator is going after a democratic-donating hedge fund founder, and he’s gonna try and make the case that the administration was protecting the guy. which even if it turns out not to be true this time, specifically, we now know categorically that the SEC is institutionally guilty of doing this very thing in the past.
August 18th, 2011 at 12:28 pm
@General Stuck:
You have made idiotic excuses for 3 years now. At some point, even you might start questioning the wisdom of your cult.
August 18th, 2011 at 12:30 pm
you’ll notice that the president, the white house, or any of his political appointees aren’t involved in this story.
August 18th, 2011 at 12:31 pm
@Dennis SGMM:
To my understanding, from Taibbe, that the only case he mentions having been shredded under the Obama admin, was the GS one in 2009, which a settlement between the SEC and GS was reached for some of their bad acts. And the article above simply states the policy was since changed. If you have other instances where case files were shredded since then, then please list them. Otherwise, looks like the policy was changed early on in the O admin.
August 18th, 2011 at 12:31 pm
So this is Clinton’s fault. Amirite?
August 18th, 2011 at 12:33 pm
@Jay B.:
Blah Blah Blah. And you have been wanking Obama fail for just as long with dubious evidence. Maybe if you quit doing that, we could learn to love one another. Let’s get together now.
August 18th, 2011 at 12:33 pm
Blaming O for this is like blaming him for dadt.
August 18th, 2011 at 12:33 pm
@The Worst Person In the World:
My mommy taught me to always protect my biasis.
Taibbi is not a financial reporter.
August 18th, 2011 at 12:34 pm
Harry Markopolous, mentioned in the article, surprised Bill Maher by telling him that enforcement by the SEC under the Obama administration was greatly stepped up, that it was the difference between “night and day.”
I don’t know how true that is, or why Markopolous would say so if it were not, but I was glad to hear it.
August 18th, 2011 at 12:34 pm
@Culture of Truth:
He was afraid of catching a beat down from the Thug in Chief.
August 18th, 2011 at 12:39 pm
Well, I won’t step in the crossfire between those saying that this doesn’t tarnish Obama and those that are sure he’s part of the conspiracy. The truth is probably somewhere in the middle, the SEC (AFAIK and I’m sure someone will tell me if I’m wrong) is part of the Executive Branch.
So he’s their boss. Buck stopping and all.
What amazes me here is the revolving door between the regulatory agencies and the businesses they ‘regulate’.
Does anyone have any constructive ideas about how to get rid of the revolving door?
We could pay our regulators like Singapore does, the same level of money they would make at the businesses they’re regulating…that would help.
Some laws preventing regulators for going to work for that sector for 5 years might work as well.
Too bad with our current congress that isn’t possible. Anybody? Ideas?
August 18th, 2011 at 12:39 pm
yes. made undoubtedly worse by republicans.
of course it’s true. do you not remember the bush administration? or chris cox?
to have anything less than a “night and day” difference between the obama and bush administrations would be a massive scandal.
it’s scary how people struggle to hold multiple truths simultaneously. the obama administration is a strong, ethical, progressive improvement from clinton and bush. their enforcement agencies can improve by 1000% and still be dirty, financially, on some level.
August 18th, 2011 at 12:41 pm
@cleek:
Or Astroturf or the designated hitter, the list is long and winding.
August 18th, 2011 at 12:42 pm
@Maude: I’m sorry, that’s ridiculous. Ahem. His book about the financial collapse
He makes a lot of the same points that Michael Lewis does in the Big Short. He’s been reporting on Wall Street for a long time.
But hey, stick with your biases, I’m sure that will work out great for you.
August 18th, 2011 at 12:42 pm
@General Stuck:
Yeah, what does the Executive Branch have to do with the government anyway? Good analogy!
August 18th, 2011 at 12:46 pm
@General Stuck:
New Coke, DDT, Gallagher, reality TV, Nancy Grace, near beer, the heartbreak of psoriasis…
August 18th, 2011 at 12:49 pm
@singfoom:
55
Arthur Levitt said that it is good to have turnover at the SEC. That way no one gets hide bound.
People need to understand how the financial sector works in order to look into things.
You like Taibbi, I think he’s an emo writer that doesn’t fact check. We can disagree.
Micheal Lewis worked in the financial sector. his book Liars Poker is a basic primer on how it works.
August 18th, 2011 at 12:50 pm
@aisce:
I said I don’t know how true it is, just I’m sadly not fully knowledgeable on the exact ratio of the strong, progressive improvement to the depth of the plutocratic conspiracy.
August 18th, 2011 at 12:50 pm
“Plutocratic conspiracy”? Hey, Pluto is Mickey’s best friend. Goofy, OTOH, is Secretary of the Treasury.
August 18th, 2011 at 12:55 pm
Bust the oligarchy!
August 18th, 2011 at 12:57 pm
@Paul in KY: its the natural evolution of the “freed” market paradigm. the unrestrained market simply exhausts its resource base, and then turns on systems like education and healthcare for Profit!.... this was entirely predictable, like Peak Oil.
August 18th, 2011 at 1:06 pm
Lax enforcement of the industry is a feature, not a bug, John.
How scary is it that the GOP thinks that even this much effort is overregulation of industry.
The whole lot of them honestly believes that companies will regulate themselves out of an irrational faith in the anarcho-capitalist dogma.
August 18th, 2011 at 1:06 pm
@Culture of Truth: You don’t need to know the exact number, because it’s never enough to even be thankful for until it’s equivalent to 1/0.
August 18th, 2011 at 1:07 pm
why is “plutocratic conspiracy” driving some of you up the wall? what else would you call it?
a specific enforcement agency was systematically destroying its own paper trail, against federal records policy, for the obvious benefit of those firms under its supervision and no other.
unless other enforcement agencies for other parts of the economy have been secretly doing the same thing, i don’t see how you can’t come to the conclusion that this was a deliberate, narrow conspiracy to prevent and bury meaningful investigation into potential wall street fraud, going back many years.
August 18th, 2011 at 1:07 pm
@Comrade Dread: i think that is bulshytt too. Can someone actually give an empirical example of the “freed” market eating the rich?
i think it can never happen.
Emirically, the freed market just improves the condition of the overclass.
August 18th, 2011 at 1:08 pm
@Samara Morgan: Not that I don’t agree with what you’re pointing out in this particular case, but how many free market systems do you have to compare against? Do they all go this way, or is ours unique?
August 18th, 2011 at 1:09 pm
@AlphaLiberal: thass relly good, for the Atlantic.
August 18th, 2011 at 1:11 pm
just so I’ve got this straight –
as a lefty, I’m now supposed to advocate the government keeping files indefinitely on anyone they ever deem “suspicious.”
does this apply to occupants of the no-fly list too, or just wall street financial types?
August 18th, 2011 at 1:11 pm
@Samara Morgan: It’s certainly natural that when business people have no restraints placed on their behavoir, they will push any advantage to the max. Adam Smith had them pegged 200 years ago.
August 18th, 2011 at 1:13 pm
@AlphaLiberal: it reminds me of a quellism.
i think we are seeing a trend for all societies to be come quellist…via social media. its called the Arab Spring.
August 18th, 2011 at 1:14 pm
Move along Americans, nuttin to see here.
August 18th, 2011 at 1:15 pm
@aisce: Did the article describe why the decision to destroy preliminary investigations was made?
August 18th, 2011 at 1:15 pm
@Samara Morgan: I think in some cases Rich Person A will reduce Rich Person B to pauperism if they can do it. However, there’s alot of back scratching & the like that usually fixes it so that the person on the losing side of the battle still has substantial assets.
August 18th, 2011 at 1:16 pm
@Paul in KY: its more than that…the basic premise of Evolutionary Economics is that the “freed” market is teleologically incapable of delivering improvement to the human condidition.
It can only improve the the condition of the overclass.
August 18th, 2011 at 1:17 pm
@lethargytartare:
zing!
August 18th, 2011 at 1:19 pm
Elizabeth Warren Launches Exploratory Committee
I really do like this woman, and hope she runs and wins.
August 18th, 2011 at 1:20 pm
@Samara Morgan: If the market is ‘free’ the way the Repubs want it to be, then I would say that anyone not in the ‘overclass’ is SOL.
August 18th, 2011 at 1:22 pm
@Belafon (formerly anonevent): there are no “free market systems”....its a fantasy. There are only variations on the “freed” (lightly regulated) market system.
You can see the empirical evidence in todays markets. Any country that doesn’t have a command economy has some variant of the “freed” market, either more or less similiar to America’s.
They are all failing.
August 18th, 2011 at 1:23 pm
@Paul in KY: yup.
unregulated capitalism is simple survival of the greediest. it will always benefit the oligarchs, because they have the luxury of being ruthless amoral freemarketeers.
the “innovation of the market” is a myth told to a slave populace….
a lot of people even here still believe that.
August 18th, 2011 at 1:25 pm
@lethargytartare: Yes, because keeping the initial notes about an investigation against a Company is exactly the same as keeping data about an individual.
Keep fucking that false equivalence chicken.
August 18th, 2011 at 1:29 pm
@Jay B.:
The SEC is not part of the Executive Branch. It is an independent agency to which the executive appoints the Chair, very much like the Fed.
August 18th, 2011 at 1:30 pm
@lethargytartare:
You’d be in favor, then, of the destruction of case files in criminal matters if the case results in acquittal or no trial, yes? That sounds more glibertarian than lefty to me.
August 18th, 2011 at 1:32 pm
@General Stuck:
Scott Brown is already using her name to raise funds, even though she’s not yet running officially. Already spreading the “She’s a carpetbagger from Oklahoma!” meme, even though she’s been teaching in this state for nearly two decades.
He used the same technique earlier this year when there were (unsubstantiated) rumors that Rachel Maddow was thinking of going for the seat.
Odd for an incumbent Senator, to always be running against someone.
August 18th, 2011 at 1:32 pm
@Samara Morgan:
My favorite part about your screeds is that 15 years ago when you were a Republican you were probably using the empirical evidence that the economies of the world were going strong as proof that the “freed” market is the best system in the world.
August 18th, 2011 at 1:33 pm
@singfoom:
Corporations are people, or haven’t you heard?
August 18th, 2011 at 1:34 pm
@lethargytartare:
There’s a difference between retaining files on individuals and retaining those on corporations. Individuals, even the most hardened criminals, usually have a limited number of years in which they can do harm. Corporations go on forever.
August 18th, 2011 at 1:36 pm
@Mike Goetz: Oh, I’ve heard it. But acting as if there is no semantic distinction between an actual individual and a corporation is silly.
Keeping notes on an initial investigation into wrongdoing for a company is absolutely necessary, especially if a civil or criminal case might be built later.
So lethargy’s comment still rings like false equivalence to me.
August 18th, 2011 at 1:37 pm
@Samara Morgan:
A certain Algerian pointed this out many decades ago.
Same old sun, nothing new, etc.
August 18th, 2011 at 1:38 pm
@MattR: ummm… i wasnt anything 15 years ago….not anything political at least.
i havent relly studied it but i suspect the freed market economies of the world were going strong because there was no Peak Oil and still a global unaware populace (underclass) to be farmed for Profit!
i know its hard for you, but we are seeing the fail of multiple paradigms.
August 18th, 2011 at 1:40 pm
@singfoom:
I agree, I was just being a little dry there.
I will say I have no problem with destroying files if a preliminary investigation comes to nothing. All kinds of small fries, including individual persons, come under SEC scrutiny. Not all of them deserve to live on in the filing cabinets in perpetuity.
August 18th, 2011 at 1:42 pm
@Judas Escargot: looks like a good book. i will read it. And it probably influenced Richard Morgan.
that was a new concept to me, since i was a sort of an anti-capitalist and crypto-anarchist at the time.
Classical anarchists just believe in destruction-without-replacement of the power structures.
now that seems kind of naive to me.
August 18th, 2011 at 1:44 pm
@Samara Morgan:
Or it could be that economies are cyclical and you shouldn’t draw major conclusions by looking at one phase of the cycle.
August 18th, 2011 at 1:48 pm
Singfoom’s comment is most clear and constructive.
What can be done?
What are solutions? I like the suggestions. Make the regulators income a million a year, and by law they cannot work in the industry once resigning, for 5 or 10 years.
Yves swith is pretty good at documenting this stuff, but I’ve stopped reading, because, again, what can be done?
August 18th, 2011 at 1:48 pm
GSD I wish there was a way we could pick muyloca’s reading list so we could chose which cut-n-paste prescription for reality and nym we would be gifted with ahead of time. I’m hesitating between The Borrowers and one of the Paddington series. Maybe something from Beatrix Potter would be a change.
August 18th, 2011 at 1:48 pm
@MattR: i dont think this is a cycle.
i think this is a fail of the free market paradigm.
for example, the movement of jobs to cheap labor is a natural consequence of the “freed” market. Are those jobs ever coming back? so i dont think this is a cycle. ditto Peak Oil. is cheap oil ever coming back?
but perhaps you can convince me otherwise.
as i recall you made a pretty spirited defense of free market theory during the Kain Wars.
August 18th, 2011 at 1:53 pm
@MattR: She was young & foolish then.
August 18th, 2011 at 1:53 pm
@Samara Morgan:
I’ll bet you’re a real hoot at parties.
August 18th, 2011 at 1:53 pm
@Mike Goetz:
Maybe a middle ground would be to keep those preliminary investigation files around for, say ten years. If nothing else turns up then shred them. Whether or not a preliminary investigation goes forward is up to the discretion of senior staff and I’d be more comfortable if the records outlasted any given administration.
August 18th, 2011 at 1:53 pm
@singfoom:
for what it’s worth, I don’t disagree with you, and acknowledge that different sphere’s of justice probably merit different standards and practices. I wasn’t really making a case one way or the other, just commenting on my reaction to Taibbi’s oddly discomfiting presentation:
“Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case.”
I just imagined the guy was innocent, and suddenly this seemed like a description of a pretty good idea.
August 18th, 2011 at 1:55 pm
@Samara Morgan: So if/when the economy recovers then what? Does that mean you were wrong about “freed” markets? Or does that just mean that there is some other factor that you forgot to take into account?
August 18th, 2011 at 1:56 pm
@scav:
“muyloca” LOL! She only talks about pie from my POV. It was a tough decision because I had to overcome a slowing-down-to-look-at-an-accident-on-the-freeway urge to read her comments.
August 18th, 2011 at 1:57 pm
@MattR: You keep this up you’ll become the next target of one of her obsessions. Just warning you dude.
August 18th, 2011 at 1:58 pm
@Dennis SGMM:
Sounds eminently reasonable to me.
August 18th, 2011 at 1:58 pm
@Yutsano: Been there. Done that. Forgot to buy the T-shirt.
(EDIT: Though I should probably have been avoiding anything that could raise my blood pressure since I am now off to the doctor)
August 18th, 2011 at 1:59 pm
“Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case.”
We don’t have to imagine it, that’s exactly what happens.
August 18th, 2011 at 2:00 pm
If we just cut back the SEC’s budget and totally deregulated the financial industry, like the GOP and Tea Party People want, then these harried workers wouldn’t have to shred documents. As always in the Galtian alternate universe, it’s the Democrats’ fault.
More seriously, this sounds bad in all kinds of ways.
August 18th, 2011 at 2:06 pm
@MattR: Economies sometimes recover, sometimes don’t. The US economy will never ‘recover’ to the growth and gains it made during the 1950s. Real wages have been in steady decline for over 40 years. We’re experiencing the greatest income and wealth disparities since the Gilded Age. The list goes on.
The pragmatic case against the current form of ‘free markets’ is inarguable: ever increasing job losses, declining wages, profits not re-entering the domestic economy to create or sustain jobs, devastating trade deficits. But eventually, people will become employed again – for less wages with less benefits and with a lower standard of living. If you want to claim that as a victory for ‘free markets’ you’re more than entitled to. But if so, you’re using the word in a vacuous or a heavily propagandistic way.
August 18th, 2011 at 2:08 pm
@General Stuck: Second that.
August 18th, 2011 at 2:09 pm
OT, but there hasn’t been an open thread all day. The NYTimes has a piece up about a Perry campaing stop in NH under the title “Perry Parries Hecklers.” The leadoff to that has him being asked how old he thinks the Earth is, by a 9-year-old kid. I guess the standards for “heckling” have really declined.
August 18th, 2011 at 2:10 pm
@sb:
I’m going to vote for Elizabeth Warren, Setti Warren, Warren Sapp or the corpse of Warren Zevon if it means voting against Scott Brown.
August 18th, 2011 at 2:13 pm
I hate to sound like an apologist and I do think that destroying those documents was an objectively bad thing, but why exactly are we calling this an illegal act? It was SEC policy, they were quite open about it, and no one has actually pointed to a law that required them to retain the documents.
August 18th, 2011 at 2:14 pm
@Gin & Tonic:
“I would have been President if it weren’t for you meddling kids!”
August 18th, 2011 at 2:15 pm
@lethargytartare:
This caught in my craw, too. Being arrested for something basically means that somebody with a badge thought you might have done something illegal. If there’s no conviction, what is the point of keeping this? What can happen is like the above, where somebody innocent gets arrested a couple of times due to bad luck or some cop having it in for him, and then keeps getting harassed since “he must have done something wrong, look at all these arrests.”
And yes, corporations are NOT PEOPLE as far as I’m concerned. Keep the records on them, although criticizing the administration that changed the policy for not doing it fast enough or with enough zeal or panache or derring-do sounds like another pile-on.
August 18th, 2011 at 2:16 pm
@Mary:
shhh…
August 18th, 2011 at 2:17 pm
@Mary:
That’s from the post at the top of the page.
August 18th, 2011 at 2:18 pm
@ mary
If you take the whistleblower’s word, that is.
August 18th, 2011 at 2:18 pm
Do some of you have any idea how big and involved the executive branch is? How many staff layers are conformable by congress? How many pages of regulations and rules there are in each one of the 15 cabinet agencies? And you want the president to be involved in each decision? From day one?
Whatever you are smoking, I’m pretty sure it’s not legal nor safe.
August 18th, 2011 at 2:20 pm
@Mary: You should read the Taibbi article. The money quote in reference to what you’re talking about
Dennis beat me to it.
August 18th, 2011 at 2:21 pm
@lethargytartare: Fair enough. I guess for me, when I’m reading Taibbi, I expect hyperbole and cursing. He likes to make extreme analogies.
I just want the semantic distinction between a real person and the synthetic person to be made, because keeping records on one for a long time offends my sense of liberty, while keeping records on a corporation, which is a synthetic person who only exists for legal and tax purposes, doesn’t offend me.
August 18th, 2011 at 2:24 pm
@Ruckus: I think you’re reading implied meaning into some other’s comments. I for one, don’t want Obama involved in every decision.
That’s micro managing and as you’ve noted, is not possible on the scale we’re talking about. However, the behavior of those who he appoints to delegate those tasks to reflect on him, do they not? (Not a hater)
August 18th, 2011 at 2:25 pm
How boned are we that we’re relying on Rolling Stone to produce this level of reporting?
August 18th, 2011 at 2:26 pm
@singfoom:
We’re not talking about “keeping records on” anybody, we’re talking about maintaining open case files. I’m not seeing the great threat to civil liberties in doing so.
August 18th, 2011 at 2:29 pm
@Ruckus:
Seems to me that the destruction of records that may have shed light on the genesis of the financial collapse, may have pointed out culpability by SEC senior staff, and may have pointed to a pattern of fraud by large financial institutions might be worth presidential involvement. Of course, it’s only the economy.
August 18th, 2011 at 2:31 pm
Just another exmaple of govt-run entities being incompetent, inefficient, and corrupt.
Yet, you keep clamoring for more govt, from health care to light bulbs. If it’s so damned delinquent in everything it does, why are you so eager to have more of it?? Perhaps you are just doing what you’re told like a good little progressive supporter – don’t question it, just support it!
August 18th, 2011 at 2:34 pm
Kinda shitty of the NYT to bury the Rolling Stone article in the middle and to not even mention Taibbi by name.
August 18th, 2011 at 2:35 pm
There’s a new troll in town,
Everybody’s talkin’ ‘bout the new troll in town…
August 18th, 2011 at 2:39 pm
@James: Hmm, I wonder if the business sector that the SEC is regulating has anything to do with this issue of inefficiency and corruption.
The fact that regulators overlooked cases and then went to work for the businesses they were supposed to be regulating doesn’t bother you?
If there was no enforcement, exactly what’s to stop companies from doing whatever they want?
I like the light bulb reference though. The private sector doesn’t so much do anything to protect the public commons, bub, hence the reliance on the government to do so.
August 18th, 2011 at 2:41 pm
@MattR: like stillwater says, i simply do not see a way that can happen.
feel free to hypothesize a scenario, though.
Like i keep saying, Evolutionary Economics states that free market theory is TELEOLOGICALLY incapable of delivering improvement to the human condition of the underclass. And the underclass fuels the global economy with spending.
And if you consider empirical data, there is no counter evidence to this theory.
August 18th, 2011 at 2:42 pm
@fasteddie9318: Please look upthread, I am responding to other’s concerns. I don’t see the threat either.
August 18th, 2011 at 2:42 pm
@MattR: you’ve never been a direct target, only an oblique one….in that you were fanatically defending EDK’s Free Market Fantasy Forest.
August 18th, 2011 at 2:46 pm
@Mike Goetz:
i am.
i have excellent taste in musiks.
my partymixs are teh awesome.
August 18th, 2011 at 2:51 pm
@MattR:
What I think you understand, but did not mention, is that for some there are no such things as “cycles”. Whatever incredibly astoundingly bad belief is held at this very moment in time is the one and only correct truth.
When the truth shifts (cycles), then the next correct truth will be formed and vigorously espoused. Repeatedly.
August 18th, 2011 at 2:58 pm
@singfoom:
@Dennis SGMM:
My point was that no one lands in a job the size of the president and knows the scope of what went on before them without input from those who were there and doing or not doing their job. He has to take information from those there. He is going to have to trust some people even if he shouldn’t. Sometimes that trust is well founded, sometimes not at all. Even if he wanted to micro manage, if that is the only way he knows how to work, he would be unable to. It’s too big, the momentum is too large to turn around quickly. And in the case of the current administration, he has a few other distractions. The economy is a pretty big one that I wish he would handle better. The financial mess like this post is about is another mess. With what looks to be both internally to the government and externally screwed up. The teatards and republicans in general come to mind as a major problem. That’s three, two of which he inherited.
August 18th, 2011 at 3:00 pm
@Corner Stone: thats science baby.
the orthodoxy is replaced by the heresy, which in turn becomes the new orthodoxy….until a better model comes along.
LOL
August 18th, 2011 at 3:00 pm
@Samara Morgan: There is absolutely nothing, and I repeat nothing, about your approach to adopting convenient belief systems that refers to science or the scientific model.
August 18th, 2011 at 3:03 pm
@James:
The light bulb you’re using in that projector just threw my shadow all the way to Hiroshima.
August 18th, 2011 at 3:03 pm
@Ruckus:
Obama’s nominee for the SEC chair was confirmed seven days after he took office. Now I only rose to Senior Manager and that in technology but, one of the first few questions I asked when taking over a new department was “What are our record keeping and archiving regimes?”
I’d like to think in taking over an agency with the responsibilities of the SEC that same question might have even more importance especially in view of the fact that corporate criminality is more often a result of a pattern of acts rather than one bold stroke.
August 18th, 2011 at 3:19 pm
@Dennis SGMM:
I always ask, “What does this red button do?”
August 18th, 2011 at 3:30 pm
@Dennis SGMM:
Don’t get me wrong I think you are totally correct in that I would be asking the same kinds of questions and would hope to have good answers in a fairly short time frame.
So in this case I ask what would the answer be? Would it be we are following protocol?
Now what do you do? A total review of procedures and policy? That would have to be my next step unless I trusted the answers. How long would that take?
August 18th, 2011 at 4:04 pm
Thanks all. My brain’s too tired to do anything that requires effort like actually read something I’m commenting on.
August 18th, 2011 at 4:18 pm
I don’t care what did or didn’t happen and who was involved or how it affects any business or investment, or who released the information first, and with what official imprimatur. If I see Matt Taibbi’s name, then I don’t have to listen to it because then it’s obviously hyperactive nonsense, because, well, it just is.
August 18th, 2011 at 5:06 pm
@Dennis SGMM:
You got nuthin’ buddy. Give it up.
August 18th, 2011 at 5:35 pm
@General Stuck: No. The policy was changed after the whistleblower brought it to the attention of Congress and the National Archives. That is, the policy was just recently changed. It was not a change made when Obama took office.
August 18th, 2011 at 6:15 pm
Perhaps this comment is too far down the thread for anyone to notice, but for the record, I worked for more than 25 years as a senior staff attorney at the SEC. Matt Taibbi’s article is an accurate description of how business was being conducted by the time I left. It is true that the SEC has never had enough staff or enough money to do the job that congress has given it to do. Sarbanes-Oxley only made it worse. When I went to the SEC (and I did not work in enforcement) we actually conducted reviews of the documents companies filed with us. We did a decent job with the resources we had. Nowadays it is literally true that the SEC could say it “reviewed” a document and that review could have consisted simply of a new employee spending half an hour skimming through a company’s 10-K looking for something to “jump out” at him or her. Of course, new employees do not know what they should be looking for, and staff training disappeared years ago because it cost too much money and the new employees they’re hiring don’t believe regulation is important anyway. It’s just something to get on your resume so you can go to work in the industry and make the big bucks. It’s hard to believe now, but once upon a time the SEC was one of the most respected agencies in the government.
August 18th, 2011 at 6:36 pm
@Pink Snapdragon:
Give me some links , as evidence of that. The Only thing Taibbi talks about is shredding happening in 2009 with a couple of cases, and not since then. If you have this evidence that the shredding just now ended, then I will change my opinion on the matter. In this instance. Not that Obama is doing more investigating and prosecuting elsewhere through the DOJ. Which is a fact.
August 18th, 2011 at 7:01 pm
@Corner Stone: you are just wrong. i usta believe in Pax America.
Now i understand America the Unjust, and the Powerless Hyperpower.
I usta believe in classical econ.
now i believe in Evolutionary Economics.
i usta believe in logic and reason and now i believe in social brain hypothesis.
in every case, the new heretical model i have adopted explains the empirical data better.
you doan liek me because i beat up on on your community members.
its ok.
i doan mind.
i’ll just swim to reach the end.
August 18th, 2011 at 7:07 pm
@Corner Stone: wallah…you think Sufism is convenient? Sufism isnt Islam-lite, its Islam-l33t.
westerners simply do not understand al Islam.
it makes them cuckoo-bananas evertime.
August 18th, 2011 at 7:43 pm
@Samara Morgan: Thanks for the link to that video. Like that band :-)
August 19th, 2011 at 8:50 am