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.
RollingStone.com
Destroying documents illegally? Check
Killing investigations in return for a cushy job at the bank you were investigating? Check
17 years of criminal negligence and dereliction of duty. Check
In a long, must read article by Matt Taibbi at Rolling Stone today titled "Is the SEC Covering Up Wall Street Crimes", the answer Matt paints for you is an obvious YES.
To sum things up, the SEC put out a memo asking employees to turn in evidence of wrong-doing, and one employee took them a little too seriously, because the SEC meant other people's wrong-doing, not their own, and thus, a whistleblower was made.
Her name is Darcy Flynn, and she discovered that MUI reports, or "Matters Under Inquiry", wherein the SEC begins an investigation into a financial institution were being destroyed systematically and illegally by the SEC since 1993. Curiously, many of these MUI's were abandoned, the SEC stopped pursuing their investigations of Wall Street players right around the same time that SEC employees who were investigating those banks became employees of those same banks who they were investigating. Some of the cases that were abandoned and later were discovered to have the records of their MUI's destroyed include the Bernie Madoff scandal that "no one saw coming", as well as instances of insider trading at Too Big To Fail banks and more. As Taibbi says . . .
To read through the list of dead and buried cases that Flynn submitted to Congress is like looking through an infrared camera at a haunted house of the financial crisis, with the ghosts of missed prosecutions flashing back and forth across the screen. A snippet of the list:
PARTY MUI # OPENED/CLOSED ISSUE
Goldman Sachs MLA-01909 6/99 - 4/00 Market Manipulation
Deutsche Bank MHO-09356 11/01 - 7/02 Insider Trading
Deutsche Bank MHO-09432 2/02 - 8/02 Market Manipulation
Lehman Brothers MNY-07013 3/02 - 7/02 Financial Fraud
Goldman Sachs MNY-08198 11/09 - 12/09 Insider Trading
One MUI – case MNY-08145 – involved allegations of insider trading at AIG on September 15th, 2008, right in the middle of the insurance giant's collapse.
RollingStone.com
One reason that our economy sucks, if I might be so bold as to opine, is that the FUBAR Too Big To Fail banks are fraud factories that exist only to exploit and manipulate. The corporate capture of the SEC is complete, and every one of their top officials who have served since 1993 should be put into jail, along with the Wall Street fatcats whose crimes they have been covering up in that time.
More below the fold . . .
The nation's top financial police destroyed more than a decade's worth of intelligence they had gathered on some of Wall Street's most egregious offenders. "The SEC not keeping the MUIs – you can see why this would be bad," says Markopolos, the fraud examiner famous for breaking the Madoff case. "The reason you would want to keep them is to build a pattern. That way, if you get five MUIs over a period of 20 years on something similar involving the same company, you should be able to connect five dots and say, 'You know, I've had five MUIs – they're probably doing something. Let's go tear the place apart.'" Destroy the MUIs, and Wall Street banks can commit the exact same crime over and over, without anyone ever knowing.
RollingStone.com
At this point, I think it is inevitable that the banks will crash again, their entire business model seems to be based on continuing the fraudulent behavior they were up to before the crash in 2008, and since then the chief culprits on Wall Street have only gotten bigger and wealthier, making their influence on the economy as a whole even more dangerous, considering that if they crash, we all crash. This is why we should have broke them up in the first place, but since we did not, we will have to go through the whole crash/panic again at some point, if not sooner, than later.
Again, I strongly encourage you to read Taibbi's whole article, as it is a thorough look at the culture of fraud and bribery that has lead to the corporate capture of the SEC and the consistent criminality of the "job creators" who live on Wall Street and exploit the rest of us with their fraudulent schemes. Seriously, in Taibbi's article Senator Chuck Grassley almost comes off as a good guy when compared to the utter corruption that takes place at the SEC, corruption that was paid for by the Wall Street plutocrats who crashed our economy, demanded bailouts, gave themselves bonuses and are now busy trying to steal your social security and medicare. The rule of law doesn't count for the super-rich anymore, they get to get away with robbery over and over again, and the evidence goes down the memory hole. I mean, of course "no one could have seen is coming" if the banksters bribed the regulators into destroying any evidence of wrong doing for over a decade. If a restaurant tried bribing a health inspector his place would get shut down and he would go to jail, but replace the word restaurant with Too Big To Fail bank and all of a sudden he is a "job creator" whom we must shower with tax breaks and deregulation, or he will go galt and destroy us all.
Now, I know a regular day at the office for Attorney General Eric Holder usually involves driving to work, punching in, taking an 8 hour nap and then driving home at the end of the day, but maybe, just maybe, someone should punish the lawbreaking barbarians in Brooks Brothers suits down on Wall Street. I have a feeling if the never-ending fraud that goes on down on Wall Street were put to a halt, maybe, just maybe that would be good for the rest of the economy, as well as the whole notion that we are not a two-tiered Oligarchy where the rules only apply to people below a certain income level.
The fraud and cover up based Plutonomy is doing just fine. The rest of you peasants shall have to sacrifice so the fraud and exploitation and wars can go on as they did before. Eurasia is at war with Oceania and always has been at war with Oceania. AUSTERITY NOW!
Insanity later.
The sanity only begins when we start putting these crooks in jail.
You can follow me on Twitter @JesseLaGreca