SEC Report: Employees Browsed Porn, Ran Private Businesses
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May 1, 2010 The Securities and Exchange Commission is taking a drubbing these days for its abject failure - despite detailed tips - to catch Bernie Madoff in what appears to be the biggest Ponzi scheme in our nation's history. Now, thanks to little - noticed report from the agency's inspector general, we have a detailed glimpse into other bad behavior by some SEC employees. |
| US Securities and Exchange Commission. | |
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The report, released the day after Thanksgiving, reveals that some employees at the agency were clearly preoccupied
with matters other than their mission of "protecting investors and maintaining fair, orderly, and efficient markets."
The semi-annual report to Congress, which covers the period from this past April to September, details among other
things a handful of employees circumventing internal controls to download porn. Let's pause for some detail: [Investigators] uncovered evidence that an employee who was still in his probationary period had used his SEC laptop computer to attempt to access Internet websites classified as containing pornography, resulting in hundreds of access denials. The OIG investigation also disclosed that this employee successfully bypassed the Commission's Internet filter by using a flash drive. Presumably, that's not the kind of initiative the SEC is looking for. There were also more serious misdeeds raised by the report. For example, there is the case of the senior-level commission employee who clearly and purposefully identified herself as a Commission employee when dealing with brokers about a family member's account, making the broker in question feel like she was trying to intimidate and bully him. The OIG referred the matter to management for "disciplinary action, up to and including dismissal." By the end of the period covered in the report, management "had not proposed or taken action." There are other examples where the punishment was less than fulsome. Investigators found employees in separate offices operated private photography businesses out of the commission: An employee repeatedly and flagrantly used Commission resources, including Commission Internet access, e-mail, telephone and printer, in support of his private photography business for several years. |
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Some SEC employees were watching porn and running their own private businesses when they should have been noticing the multiple signs, like ponzi scheme of Madoff and Sanford.
Time to Demand More From the SEC
Written by Diane Dimond
Saturday, 01 May 2010 07:34
I wish there were a way to indict an entire government commission. OK, well, maybe just the senior staff?
I'm speaking, of course, about the Securities and Exchange Commission, where as many as 33 of its top management -
including senior lawyers and accountants - were apparently too busy looking at XXX-rated Internet porn sites to notice
brewing financial tsunamis like the implosion of the U.S. housing market, the demise of giant Lehman Brothers and rouge
billionaire investment gurus like Bernie Madoff and Robert Allen Stanford, who decimated countless thousands of
Americans' retirement plans.
It was the SEC's job to look out for our financial well-being, and we now see how miserably it failed. As Wall Street
quaked, the financial structure of America began to crumble and Ponzi schemes percolated, these Bozos were more worried
about feeding their own sexual appetites.
Just a short time after the Office of Inspector General's recent Porn-Gate report made news, it was revealed that the
SEC had filed a blockbuster mortgage fraud suit against investment giant Goldman Sachs. Headlines screamed the news,
Congress immediately jumped on the "we've-got-to-have-hearings-on-this!" bandwagon, and attention was averted away
from the SEC employees' own criminality.
I want to shine the spotlight back where it belongs. And I don't use the word "criminality" lightly.
Some of these top echelon employees were raking in as much as $222,000 a year - all taxpayer money, of course. These
ne'er do wells, one who was reported to have spent at least eight hours a day for weeks on end perusing and downloading
porn sites, might as well have walked into a convenience store and stolen all the cash out of the register.
This report on porn viewing at the SEC is chilling in its detail. It concludes that most of the X-rated behavior
began in 2008, just as the U.S. economy began to wobble and the problem hasn't stopped! The most recent case of an
SEC executive spending more time surfing nasty sites than working on our behalf occurred just a few weeks ago.
One senior SEC attorney spent so much time drooling over and capturing pornographic images on his office computer
that he ran out of space on his hard drive. He began to download the lewd material onto discs, which filled multiple
boxes and were stored right there in his government office. This is an attorney who surely knew what he was doing was
wrong.
A female SEC accountant tried to access vulgar porn sites 1,800 times in just one two-week period. Investigators
found 600 pornographic images burned onto her government-issued laptop computer's hard drive.
Another SEC accountant brought his own sexually explicit videos in to work and used the commission's computer to
upload them to porn club sites he'd joined online. And a regional staffer's computer showed that he'd tried to access
pornographic Websites but was stopped by the commission's Internet filter 16,000 times in one month! That averages
out to 800 times every workday! What the heck was this guy doing in between trying to view porn?
Mike Leahy, author of the bestselling book "Porn Nation," asked about that type behavior, said simply, "Trust me,
these guys are addicts."
Two years after the porn-fest at the SEC began, it is little comfort that they've now apparently been shamed into
using their computers only for official business. It's somehow just not enough when the SEC's spokesman, John Nester,
announces that "each of the offending employees has been disciplined or is in the process of being disciplined.
Some have already been suspended or dismissed."
Really? Just "some" of them? And, what about the possibility of criminal charges being filed against the worst
offenders - maybe charges of accepting government funds under false pretenses - because I sure feel like I've been
ripped off ... in more ways than one!
It's not just the pornography scandal that should force a major revamp of the SEC. It's the culture of uncaring
evident for many years there that must change. Way back in 2000, the SEC was warned about the unscrupulous
activities of billionaire con man Bernie Madoff. He should have been thoroughly investigated and stopped then, yet
it took nine years to bring him to justice. The SEC first heard that Robert Allen Stanford was up to no good in 1997,
yet his scheme continued for more than a decade, growing to an astounding 8 billion dollars.
I don't hear Congress clamoring to hold hearings on the Securities and Exchange Commission, but I think they should.
Those SEC scoundrels who spent time sexually arousing themselves instead of doing the job we taxpayers paid for
should have to pay a price.
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