Anyone Surprised By This?

Stunner: Government employees sit around checking out porn sites all day?

Whodathunkit?

At the SEC, all they thought about was SEX.

The country's top financial watchdogs turned out to be horndogs who spent hours gawking at porn Web sites as the economy teetered on the brink, according to a memo released Thursday night.

The shocking findings include Securities and Exchange Commission senior staffers using government computers to browse for booty and an accountant who tried to access the raunchy sites 16,000 times in one month.

Their titillating pastime was discovered during 33 probes of employees looking at explicit images in the past five years, said the memo obtained by The Associated Press.

It says 31 of those probes occurred in the 2-1/2 years since the country's financial system nearly crashed.

The report was written by SEC Inspector General David Kotz in response to a request from Sen. Charles Grassley (R-Iowa).

Among the startling findings:

- A senior attorney at the SEC's Washington headquarters spent up to eight hours a day looking at and downloading pornography. When his government computer ran out of hard drive space, he burned the files to CDs or DVDs. He later agreed to resign.

- An accountant was blocked more than 16,000 times in a single month from visiting "sex" or "pornography" sites, but still managed to amass a collection of "very graphic" material by using Google to bypass the SEC's internal filter. He wound up with a 2-week suspension.

- Seventeen of the randy employees were "at a senior level" earning salaries of up to $222,418.

- The number of cases jumped from two in 2007 to 16 in 2008. The cracks in the financial system emerged in mid-2007 and spread into full-blown panic by the fall of 2008.

Ten Madoff Associates to Face Fed Charges, NYT Tells Victims to Get Over It

This report doesn't detail who'll be facing charges, but it's likely a safe bet his sons and possibly his wife may be brought up on charges.

Federal authorities are pressing a probe of 10 associates of Bernard Madoff despite a sentence that means the mastermind of one of the biggest financial frauds in history will spend the rest of his days behind bars, The Associated Press has learned.

A person, who spoke on condition of anonymity because the investigation is ongoing, wouldn't detail potential charges or say whether the 10 would include Madoff's family or former employees. So far, only Madoff and an accountant accused of failing to make basic auditing checks have been criminally charged in the multibillion-dollar hoax.

It will be interesting to see if there was anyone at the SEC who was looking the other way all these years.

Meanwhile, a business columnist at the New York Times tells the victims to quit whining. He has a point.

Besides, as I’ve argued before, the S.E.C.’s negligence notwithstanding, shouldn’t the Madoff victims have to bear at least some responsibility for their own gullibility? Mr. Madoff’s supposed results — those steady, positive returns quarter after blessed quarter — is a classic example of the old saw, “when something looks too good to be true, it probably is.” What’s more, most of the people investing with Mr. Madoff thought they had gotten in on something really special; there was a certain smugness that came with thinking they had a special, secret deal not available to everyone else. Of course, it turned they were right — they did have a special deal. It just wasn’t what they expected.

Outside the courthouse today, television reporters interviewed victims, all eager to tell their tales of woe. And their stories, in many cases, truly are heart-wrenching. Hopes and dreams have evaporated. Homes have been lost. Retirees are having to take minimum-wage jobs. Their anger at Mr. Madoff is understandable, to say the least. But to see them lash out at Irving Picard, the bankruptcy trustee, made me realize that too many of them still seem to think that someone should have to make them whole. The whole point about Ponzi schemes is that there is not enough money to make anybody whole — they were robbed, pure and simple, and the government is not in the business of reimbursing for robberies. Not even when the cops stumble across the robbers and then mistakenly let them go.

I'd suggest they go ask Chuckie Schumer for help, but he's laying low right now.

Another Great Vetting Job: Obama's Car Czar Under SEC Investigation

Way to go, Barry O, another fine hire you've got here.

Steven Rattner, the leader of the Obama administration's auto task force, was one of the executives involved with payments under scrutiny in a probe of an alleged kickback scheme at New York state's pension fund, according to a person familiar with the matter.

A Securities and Exchange Commission complaint says a "senior executive" of Mr. Rattner's investment firm met with a politically connected consultant about a finder's fee. Later, the complaint says, the firm received an investment from the state pension fund, then paid a $1.1 million fee.

The "senior executive," not named in the complaint, is Mr. Rattner, according to the person familiar with the matter. He is co-founder of the investment firm, Quadrangle Group, which he left to join the Treasury Department to oversee the auto task force earlier this year.

A spokeswoman for the Treasury, which is in charge of the auto task force, said that "during the transition, Mr. Rattner made us aware of the pending investigation."

In the long-running pay-to-play case, authorities allege that about 20 investment firms made payments in exchange for investments from the $122 billion New York State Common Retirement Fund. The case, being investigated by New York Attorney General Andrew Cuomo and the SEC, has led to three criminal indictments and a guilty plea.
...
Mr. Rattner, 56 years old, is a veteran deal maker who co-founded New York-based Quadrangle in 2000 after spending years as an investment banker at Lehman Brothers, Morgan Stanley and Lazard Freres & Co., where he rose to the No. 2 spot. Earlier this year, President Barack Obama tapped him to lead a task force of two dozen people to figure out how to restructure ailing U.S. auto makers General Motors Corp. and Chrysler LLC.

Hank Morris, who was the top political adviser and chief fund-raiser for former New York Comptroller Alan Hevesi, was a placement agent named in the SEC complaint. The deputy comptroller, who helped produce "Chooch," was David J. Loglisci.

Both men were arrested last month and charged in a 123-count state criminal indictment that included money-laundering, enterprise-corruption and bribery charges. The SEC filed civil-fraud charges against the two men. Attorneys for the two men have denied the accusations.

H/T The Rhetorician

Heh: Tennessee Coach Lane Kiffin Accuses Florida of Cheating, Offers Groveling Apology

You think the Tennessee-Florida rivalry has been nasty the past couple of decades? Well, it's now gone nuclear.

What is it about former USC assistant Coach Lane Kiffin that produces venom-spewing press conferences and/or tersly worded released statements?

Raiders' owner Al Davis fired Kiffin last fall and held a rare -- and very bizarre -- press conference afterward to rip the young coach, Davis calling Kiffin a "Flat-out Li-ah" (Liar).

Kiffin recovered by getting named head coach at the University of Tennessee, in the cutthroat Southeastern Conference, where on Thursday he found out what happens when you accuse Florida's coach of of evil doing.

That's right, Kiffin accused Florida Coach Urban Meyer of violating recruiting rules in pursuit of receiver Nu'Keese Richardson. WVLT -TV out of Knoxville reported Kiffin told a group of fans at post-recruiting breakfast that Meyer called Richardson during the player's recent visit to Tennessee. Richardson ended up signing with Tennessee.

Kiffin told the crowd: "I love the fact that Urban had to cheat and still didn't get him."

Needless to say, them's fightin' words. Naturally, this hasn't gone over well in Gainesville, where the Vols play in September. How vicious a beatdown is that going to be?

UF released the following statement from athletic director Jeremy Foley: "There was no rule violation and we have confirmed this with the Southeastern Conference. It is obvious that Coach Kiffin doesn’t know that there is not a rule precluding phone contact with a prospect during an official visit on another campus during a contact period. His allegations are inappropriate, out of line and, most importantly, totally false. It is completely unfair to Urban Meyer, our coaching staff, our football program and our institution. The appropriate action at this time in my opinion is for Coach Kiffin to make a public apology.

His comments not only slandered our coach, but he violated SEC rules by publicly criticizing another coach and institution."

On cue, Golden Boy apologizes and gets a reprimand.

Tennessee coach Lane Kiffin apologized Thursday for remarks he made about Florida coach Urban Meyer, where he alleged the Gators coach violated recruiting rules in pursuing wide receiver prospect Nu'Keese Richardson.

Florida demanded an apology and the SEC publicly reprimanded Kiffin on Thursday.

"At an energetic breakfast with some of our donors and alumni I made a statement that was solely meant to excite the crowd," Kiffin said in a statement.

"If I offended anyone at the University of Florida, including Mr. Foley and Urban Meyer, I sincerely apologize. That was not my intention."

As a special added bonus, Kiffin also took a swipe at Alabama Coach Nick Saban. Good careeer move. The Vols also visit the Crimson Tide this year. Expect another bloodbath.

One writer wonders if Kiffin is nuts.

Some of Kiffin's tactics rate as good ol' fashioned hardball – take the hiring of Thompson, for example. But it crosses a line when you accuse an opponent publicly of cheating without the facts to back it up.

I would imagine that all over the SEC today, rivals are triple-checking each Tennessee recruit for any signs of funny business. I would also imagine that will go on for as long as Lane Kiffin coaches there.

And since the Vols don't figure to have full cupboard of talent for a while, he may soon discover what street justice looks like in the SEC.

It won't be pretty.

Bernanke Seeks Expanded Fed Powers

Federal Reserve Bank Chairman Bernanke is looking for more regulatory powers for the Fed.

Federal Reserve Chairman Ben Bernanke said Tuesday that the Fed should have additional powers to prevent and limit financial market turmoil.

Congress should consider giving the Fed power to set standards for capital liquidity holdings and risk management for investment banks, Bernanke said.

In the past, the Securities and Exchange Commission has been the primary regulator of broker dealers.

In addition, Congress might give the Fed broad power to promote financial market stability, Bernanke said.

I am in favor of this suggestion by Bernanke. Over the years, the financial markets have changed, become more complex and the lines between banks (traditionally the regulatory jurisdiction of the Fed) and broker/dealers (traditionally the regulatory jurisdiction of the SEC) have become blurred. I believe that the oversight arms need to be updated to keep pace.

And just recently, the Fed did make some creative moves to provide some liquidity to the brokerage house sector:

Bernanke said the Fed is considering extending its emergency loans to broker-dealers beyond 2008.

"We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end," he said.

In March, as market conditions worsened, the Fed established two lending facilities for brokerages. One allows them to swap a range of illiquid assets for Treasury securities. The other facility provides cash to broker dealers in a system that is similar to its discount window for banks.

I would expect to see the SEC eventually become an arm of the Federal Reserve Bank. Very clearly, their activities need to be coordinated.

Markets Continue to Lose Steam

The stock market continues to lose steam as the economy slows down.

Markets fall after dip in US jobs

Global stock markets fell sharply after shock US jobs data ignited concerns about wider economic prospects.

The surprise 4,000 reduction in the US workforce in August sent the main Dow Jones index down 250 points to 13,113.

Several thoughts come to mind. First, I would look for the Fed to continue to ease interest rates.

Michael Metz, chief investment strategist at Oppenheimer & Co in New York, reacted to the latest employment figures with gloom.

"It's dreadful ... it seems to me almost inevitable we're heading for recession," Mr Metz said.

The figures will add to pressure on the Federal Reserve to lower interest rates.

Fed chairman Ben Bernanke has stated that he is prepared to act to prevent credit difficulties sparked by the sub-prime crisis from damaging the US economy.

Second, that would mean a further lowering of the dollar value on the international market. That is not at all a bad thing, as it encourages exports to to other countries. But it will also make imported crude oil more expensive.

Third, one item that has been lost in all the recent economic news has been the change to the "uptick rule." The "uptick" rule was put in place by the SEC in 1938 and required short sellers to close out their short market positions after an uptick in the stock price.

That rule kept short seller speculators from spreading rumors and trying to drive the market down to make more money off their short positions.

Well, the SEC cancelled the uptick rule on July 6 of 2007. Consider the volatility we have experienced in the market since early July. I'm not saying all the market drops since July are due only to the elimination of the uptick rule, but it sure did not help.

I think the SEC may need to reconsider their change to the uptick rule.