Following up on my article Why Does the SEC Have Such an Abysmal Record Solving Financial Cases? one of my readers emailed the following:
I was reading your blog comments on the SEC and it reminded me of something that I have always found outrageous - like in the Peter Sellers movie "A Shot in the Dark" where he plays the part of the incompetent police Inspector Clouseau, and the criminal perpetrator wants to keep him in charge of the case because his incompetence lessens the chance of finding the truth.
In a similar vein, I think, is the fact that David Kotz, the Inspector General of the SEC, was recruited from the PEACE CORPS (he may be honest and mean well, but what experience in uncovering sophisticated financial crimes would he have gained there? It's like someone doesn't really want a competent investigator in charge.) Kotz did uncover some sort of "evidence" of insider trading by SEC lawyers but nothing has come of it!!!
Well, I learn something new everyday -- oftentimes thanks to my readers. Who knew that working as a lawyer for the Peace Corps was a stepping-stone to becoming the Inspector General of the Securities and Exchange Commission? Don't get me wrong here. I am not trying to disparage the Peace Corps. From what I understand, it does a lot of good around the world. However, I have never known it to be a place to train lawyers how to solve complex financial cases at the SEC.
No wonder the SEC is having a hard time solving financial crimes involving complex derivatives, mathematical finance, financial engineering, stochastic calculus, complex structured transactions, quantitative analysis, insider trading, SPVs, SIVs, flash trading, proprietary trading, statistical analysis, mathematical modeling, numerical analysis, hedge funds, Ponzi schemes, Bernie Madoff, AIG, Goldman Sachs, etc., etc., etc.!
This is really scary! Folks, we are in serious trouble!
Follow Iris Mack on Twitter: www.twitter.com/DrIrisMack
I just read the SEC IG Kotz's bio - http://webcache.googleusercontent.com/search?q=cache:_S2Kx_ZRhdMJ:www.sec-oig.gov/Administration/IG.html+sec+inspector+general+kotz+peace+corps&cd=1&hl=en&ct=clnk&gl=us
I saw NOTHING in Kotz's bio that would qualify him for any job at the SEC - especially the job of Inspector General.
This guy needs to go and someone with a serious finance and trading background needs to replace him. This is serious CRONYISM
PS:Iris this will make your life better on twitter: http://bit.ly/a/tour/ just drag the sidebar to toolbar...
url shortenner...
There should be a way for taxpayers to oust people like SEC IG Kotz and hire competent people.
Hey, I nominate Dr. Mack for the job. Check out her HuffPo bio. She would find the financial bad guys in a heartbeat.
Thank you for your vote of confidence.
Turns out the article has been picked up by quite a few other media outlets -
1. http://www.google.ch/search?hl=en&as_q=&as_epq=Why+Can%27t+the+SEC+Crack+Financial+Cases%3F+The+Peace+Corps%3F&as_oq=&as_eq=&num=10&lr=&as_filetype=&ft=i&as_sitesearch=&as_qdr=all&as_rights=&as_occt=any&cr=&as_nlo=&as_nhi=&safe=images
2. http://www.google.ch/search?hl=en&as_q=&as_epq=Why+Does+the+SEC+Have+Such+an+Abysmal+Record+Solving+Financial+Cases+&as_oq=&as_eq=&num=10&lr=&as_filetype=&ft=i&as_sitesearch=&as_qdr=all&as_rights=&as_occt=any&cr=&as_nlo=&as_nhi=&safe=images
Thanks for the twitter tip. I will give it a try.
Happy July 4th, Iris