It's been over a year since President Barack Obama appointed Anne K. Small, former special assistant to the president and former associate counsel to the president, to become the general counsel of the Securities and Exchange Commission. The president's appointment of Mary Jo White to head the SEC as chairwoman is now past the one year mark.
Has anything changed at the SEC? No.
Under this president, we have experienced Wall Street fraud on an epic scale with the criminals walking away without so much as a slap on the wrist.
(Photo by John Moore/Getty Images)
Take former New Jersey Gov. Jon Corzine, who oversaw the looting of customer accounts at MF Global Holdings, where he was the chairman at the time. After MF Global's $6.3 billion bet on bonds headed south, and the firm was headed to bankruptcy, $1.6 billion of customers funds went missing. MF Global, in many cases, took money from segregated customer accounts where they had no legal right to do so. Segregated accounts are considered the safest way to park money while waiting for a trade. It is nothing short of grand larceny on a massive scale.
Of course, Corzine denies any knowledge of the transactions, after all he was only the chairman of MF Global. What should he know about a $6.3 billion bet gone awry? It doesn't hurt that the former Democratic governor has given and raised piles of money for the democratic party or that he is big Obama supporter.
Enforcement actions at the SEC have remained flat for years. Meanwhile ex-Countrywide CEO Angelo Mozilo remains a free man after walking away from the mortgage disaster he helped create.
The U.S. government in October of last year won a major case against Bank of America who acquired Countrywide. The U.S. Justice Department is seeking $848 million in losses. The investors lose their shirt. The government gets back some damages and Mosilo walks away scot free. And it didn't hurt that many members of the banking committee received favorable mortgage financing from Countrywide by being "Friends of Angelo." His political contributions didn't hurt either.
No, nothing has changed at the SEC. It remains the premier spot to gain experience and then go make a fortune protecting companies from your former employer, the SEC. It certainly worked well for White and Small.
Investors cannot count on the SEC or Financial Industry Regulatory Authority to maintain a free and open marketplace. And we certainly can't count on the president or Attorney General Eric Holder to enforce the laws against prominent Democrats, no matter how egregious their actions.
When a connected bank makes bad bets, Obama's cronies run to the rescue with taxpayer money to bail them out. The super rich have done very well under Obama.
Meanwhile the president has abandoned the middle class who he claims to be an ardent supporter of. Corporate greed has paid off handsomely for those connected to the White House. The rest of us are left holding the proverbial empty bag.
John Lawrence Allen, a nationally recognized legal expert, represents investors nationwide in securities arbitration. Mr. Allen’s second book, “Make Wall Street Pay You Back,” was just released. For more information visit www.MakeWallStreetPayYouBack.com.
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