SEC Updates Congress On Ponzi, Porn, Other Scandals

Wednesday, June 01, 2011 06:26
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SEC Updates Congress On Ponzi, Porn, Other Scandals

The SEC inspector general's latest semiannual report to Congress is lengthy but all that detail provides a rare look at how the regulator really operates -- warts and all.

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For one thing, an internal probe into former top SEC lawyer David Becker's disclosure of his conflict of interest as a beneficiary and a prosecutor of the Bernie Madoff scheme is far from settled.

 

SEC inspector David Kotz says that Mary Schapiro herself ordered the investigation in order to give members of Congress firm answers on just how Becker managed the apparent conflict.

 

His team has now reviewed 1.7 million email messages and is busy interviewing the principals. A full report is expected by September.

 

Likewise, the investigation into the SEC's rushed and expensive decision to lease 900,000 square feet of unnecessary prime Washington office space is still going on.

 

Sadly, internal controls are still catching SEC personnel surfing the Web for pornography on the job. An accountant, two lawyers, and an independent contractor who wasted the government's time and resources in this pursuit are now gone.

 

The report is sprawling at 109 pages, but the smallest details are the most surprising.

 

Apparently the SEC had never thought to set up small and flexible suburban "satellite" locations outside its existing offices until an employee suggested it as a way to save money.

 

And the regulator's email system is so old and overburdened that they're struggling with sending big attachments.

 

 

 

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