Post by jannikki on Feb 15, 2007 17:55:05 GMT -4
SEC Inconsistencies brings Problems to Light
Location: Blogs Dave Patch's Blog
Posted by: dpatch 2/15/2007 6:42 AM
Come on guys, did anybody ever believe that the SEC was going to take action against Gradient Analytics and David Rocker? Let’s be real here.
When the SEC called in David Rocker to ask questions, as they did John Mack only months earlier, they did so with a preconceived conclusion that he was innocent of all charges. Rocker is politically tied and speaks before congress about the influences Hedge Funds have on our economy. Rocker would never be so self-serving as to tip the scales to make sure his positions are not only heard but followed.
In yesterdays Stockgate Today I discussed some of the inconsistencies the action of the SEC exposed in closing out this investigation. After publishing the article a few more came to mind:
Ø Affidavits by former employees discussed conference calls between Greenberg, Gradient, and Rocker. Without issuing a subpoena for records, how did the SEC invalidate these accusations?
Ø Herb Greenberg had a live account with Gradient (first denied and later admitted to) in which he was reporting on the Gradient material real time. Herb’s articles are a matter of public record. Gradients reports did not disclose that they were written specifically for a paying client and thus were not independent. How does the SEC thus justify no-liability to this improper disclosure and yet plan to enforce the revised analysts disclosure laws created after the 2001 scandal erupted?
As I said in my article, I think this was the first gaffe of a struggling agency seeking to hide an issue that continues to grow. When you take actions defensively you make errors and this week the SEC made that error.
In light of the John Mack whitewash the SEC is under higher levels of scrutiny than before. The agency is suspected of blocking or dismissing enforcement cases against the “privileged”. Now the members of Congress, with those same affidavits in their hands, have to understand what was the motivation of the SEC to dismiss this case so handedly and so quickly.
Did the SEC take this response, and the public media bombardment that ensued due to this “rare” no-action memo being disseminated; in order to impact the case Overstock and Biovail have in the civil courts? If so, the SEC could be up against yet another obstruction of justice charge.
We know for a fact that each State Congressman that has presented for legislation a version of the Utah law has received a threatening call from the SEC and are being told to back off. State Congressmen are being told this is outside their authority behind closed doors by an agency who has, for decades, been willing to cover up the fraud.
Actions of a scared agency making BIG mistakes.
The SEC will never be able to deny they have known and done nothing as the General Counsel to Bear Stearns let us all in on the secret. An audio that is in the hands of the SEC as confirmed by me.
Recall the transcripts…
"To give you that brief introduction in Reg SHO, the history (of) how we got to where we are today. For the past few years we have been hearing from many different regulators regarding their concerns about the increase in the level of fails that they are seeing. They believe, and they have stated on numerous occasions, that one of the primary causes of the high level of fails was that various participants in the short sale process, prime brokers, executing brokers, clients, were not following already established rules."
UPDATE: I heard from a third party that one regulatory investigator believed that the SEC action in this case was proper because “there just wasn’t enough there”. Reality is, these people are looking for that bright red ball in a sea of blue and are ill equipped at searching and locating that off color blue ball that was carefully hidden in the mix. If fraud does not stick out like a sore thumb there is no searching for the subtle abuses that add up.
The Mutual Fund fraud was the theft of a penny here, a nickel there and the regulators never found it. It took a whistleblower. Anifantis was the whistleblower to Gradient and the SEC responded to him exactly the same way they did the Putnam whistleblower. They dismissed his allegations without a thought.
thesanitycheck.com/Blogs/DavePatchsBlog/tabid/66/EntryID/573/Default.aspx
Location: Blogs Dave Patch's Blog
Posted by: dpatch 2/15/2007 6:42 AM
Come on guys, did anybody ever believe that the SEC was going to take action against Gradient Analytics and David Rocker? Let’s be real here.
When the SEC called in David Rocker to ask questions, as they did John Mack only months earlier, they did so with a preconceived conclusion that he was innocent of all charges. Rocker is politically tied and speaks before congress about the influences Hedge Funds have on our economy. Rocker would never be so self-serving as to tip the scales to make sure his positions are not only heard but followed.
In yesterdays Stockgate Today I discussed some of the inconsistencies the action of the SEC exposed in closing out this investigation. After publishing the article a few more came to mind:
Ø Affidavits by former employees discussed conference calls between Greenberg, Gradient, and Rocker. Without issuing a subpoena for records, how did the SEC invalidate these accusations?
Ø Herb Greenberg had a live account with Gradient (first denied and later admitted to) in which he was reporting on the Gradient material real time. Herb’s articles are a matter of public record. Gradients reports did not disclose that they were written specifically for a paying client and thus were not independent. How does the SEC thus justify no-liability to this improper disclosure and yet plan to enforce the revised analysts disclosure laws created after the 2001 scandal erupted?
As I said in my article, I think this was the first gaffe of a struggling agency seeking to hide an issue that continues to grow. When you take actions defensively you make errors and this week the SEC made that error.
In light of the John Mack whitewash the SEC is under higher levels of scrutiny than before. The agency is suspected of blocking or dismissing enforcement cases against the “privileged”. Now the members of Congress, with those same affidavits in their hands, have to understand what was the motivation of the SEC to dismiss this case so handedly and so quickly.
Did the SEC take this response, and the public media bombardment that ensued due to this “rare” no-action memo being disseminated; in order to impact the case Overstock and Biovail have in the civil courts? If so, the SEC could be up against yet another obstruction of justice charge.
We know for a fact that each State Congressman that has presented for legislation a version of the Utah law has received a threatening call from the SEC and are being told to back off. State Congressmen are being told this is outside their authority behind closed doors by an agency who has, for decades, been willing to cover up the fraud.
Actions of a scared agency making BIG mistakes.
The SEC will never be able to deny they have known and done nothing as the General Counsel to Bear Stearns let us all in on the secret. An audio that is in the hands of the SEC as confirmed by me.
Recall the transcripts…
"To give you that brief introduction in Reg SHO, the history (of) how we got to where we are today. For the past few years we have been hearing from many different regulators regarding their concerns about the increase in the level of fails that they are seeing. They believe, and they have stated on numerous occasions, that one of the primary causes of the high level of fails was that various participants in the short sale process, prime brokers, executing brokers, clients, were not following already established rules."
UPDATE: I heard from a third party that one regulatory investigator believed that the SEC action in this case was proper because “there just wasn’t enough there”. Reality is, these people are looking for that bright red ball in a sea of blue and are ill equipped at searching and locating that off color blue ball that was carefully hidden in the mix. If fraud does not stick out like a sore thumb there is no searching for the subtle abuses that add up.
The Mutual Fund fraud was the theft of a penny here, a nickel there and the regulators never found it. It took a whistleblower. Anifantis was the whistleblower to Gradient and the SEC responded to him exactly the same way they did the Putnam whistleblower. They dismissed his allegations without a thought.
thesanitycheck.com/Blogs/DavePatchsBlog/tabid/66/EntryID/573/Default.aspx