Wednesday, March 24, 2010

Mary Schapiro and her SEC Porn-Surfing Government Employees

The head of the SEC, Mary Schapiro, has slid by more than a few scandals. Formerly the head of FINRA, a private regulatory organization overseeing Nasdaq and the NY Stock Exchange brokers and securities dealers, should have had some question marks on her resume, but Barack Obama moved her to the SEC position anyway. Schapiro has been implicated in the Bernie Madoff $50 billion Ponzi scheme, and the failure of big financial firms operating under her watch at FINRA. Did I mention that Barack Obama moved her to the SEC anyway? It is not clear whether Schapiro was already at the SEC as some of the porn-surfing charges were alleged. It is clear that they did not all happen on her watch, but she couldn't clean her own industry, even when paid mega-bucks to do so, so why believe the government employee porn habit, which may include children, will stop?

Mary Schapiro

Some SEC employees have been porn-surfing on government computers for at least the past year-and-a-half. Some of it may have involved kiddie-porn. You can skip down several paragraphs to get right to the porn-surfing allegations. Since Mary Schapiro is now the head of the SEC, let's see what the possibilities of the place being cleaned might be.

Mary Schapiro, has been at the helm of two agencies directly tasked with watching over our markets and the stability of investor funds. She ignored Madoff - whistleblower be damned.  Some believe her FINRA oversight of Lehman Brothers was faulty, there was AIG, and Merrill Lynch. We need an overhaul at the highest levels. We have the fox guarding the hen house:
In 2007-08, Regulators at FINRA were so distracted with empire-building and lining their pockets, they overlooked the world's two largest Ponzi schemers: Bernie Madoff and, allegedly, R. Allen Stanford.... 
Several broker-dealers subsequently sued FINRA, alleging the officers had lied and subsequently had used some of the money to give themselves exorbitant pay raises. Mary Schapiro, who led FINRA then, received $7.3 million in salary [and maybe as much as $25 million over time] and accumulated benefits when she left; now chairman of the SEC, Schapiro makes $158,500 a year. 
In the first video below [Sense on Cents] you'll hear attorney Richard Greenfield, an attorney representing Amerivet Securities, claim that FINRA actually invested with Madoff, and about Schapiro's Financial Industry Regulatory Authority (FINRA) exit bonus of at least $7 million and probably much more.

FINRA is a private agency set up by Wall Street. It is intended to the first line of defense in policing the activities of securities firms and protecting investors. When lawsuits were filed, they were dismissed because FINRA has complete immunity under the law. FINRA is accountable to no one.

Claims of Schapiro's close relationship with Bernie Madoff and a glaring lack of regulation of his bilking activities, even with a very persistent whistleblower are numerous, and Schapiro was Madoff's son's employer. Obama promoted her from FINRA to the head of the SEC anyway.

On a lighter note of porn - possibly kiddie porn: One employee was only able to look up pornography a little more than 1800 times in a 17-day period. Two dozen others are under investigation for a period ranging from April to September 2008. The porn-surfing among these government employees popped up in four (4) semiannual reports to Congress. The investigation implicates only "a small fraction of the overall work force." Congress is aware and planning taxpayer-paid addiction therapy (just kidding...but probably).

The names of the porn-surfers have not been released because doing so could "conceivably subject them to harrassment and annoyance in the conduct of their official duties and private lives." Gawker says a report in their possession involves a man who attended graduate school and works in a professional capacity; that underaged children may have been a target of the SEC employee's curiosity and that government computers in this investigation had some 8,273 attempts to go where they should not be going.

From a report alleging to be a part of the investigation:
[interviewer] Our records show that on Wednesday, August 20th, beginning at 3:17PM, you made approximately 385 attempts to access a website called www.ladyboyx.com. Do you have any recollecting of attempting to access this site?
One man, maybe the one above, said he really "tried not to let it affect his work."

ProPublica seems to be the first to break the SEC's fascination with pornography in December 2008. The Washington Times reported on the story in February 2010. If investors have any good fortune at all, porn-surfing at the SEC is gone now, and perhaps the agency is actually watching over our investments - but Mary Schapiro is still there.



FINRA and SEC Scandals: Mary Schapiro and Bernie Madoff (video)


Related and Background:

©2007-2012copyrightMaggie M. Thornton