Bloomberg columnist Susan Antilla says Wall Street scoffs at the Securities and Exchange Commission, and she tells us why in her article entitled, “Four People Who Get Why Wall Street Can Scoff.” One reason seems to have something to do with money and self-interest.
According to Antilla, former SEC general counsel, David M. Becker, had a personal stake in Madoff (inasmuch as he and two brothers inherited a $2 million Madoff account in 2004), but the SEC’s ethics counsel, William Lenox, who was supervised by Becker, allowed him to work on policy related to the Madoff Ponzi scheme that could have benefited the three brothers.
Lenox reportedly said in an email to Becker, that Becker’s personal stake did not present “a financial conflict of interest.” Madoff bankruptcy trustee, Irving Picard, apparently disagrees, and has filed a claw-back suit in the amount of $1.5 million, the gain in Becker’s mother’s account, according to the article.
Antilla quoted Gary Aguirre, who was fired by the SEC after he pushed to depose Morgan Stanley Chief Executive Officer John Mack in an insider-trading investigation, as saying that the SEC “has been so compromised by its connections with Wall Street, it cannot function’. [A] guy at the SEC makes $200,000 a year, leaves for a $2 million a year job, and when he needs a favor, calls an old pal at the SEC.”
Antilla also quoted Denise Crawford, former Texas securities regulator and president of the North American Securities Administrators Association, an organization of state securities regulators, as saying that the SEC has “a failed culture” and doesn’t work anymore, because it “hires lawyers who ultimately will go to private practice and make big bucks. Maybe it’s time to do away with the SEC.”
Or as one former regulator put it, SEC senior lawyers need to stop issuing lunch invitations to Wall Street executives and start issuing subpoenas.