The SEC Kicked the Can & the NY Court System Hid the Records

November 29, 2011
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In reality the workings of your governing system are opaque and covert, while hiding in the chattering spotlight of an ostensible transparency, even though the ultimate objective is clear. ~ Breyton Bretenbach

If you ever wonder how Madoff pulled off his scheme without the SEC picking it up, all you have to do is look at how the SEC operates. Hopefully, the SEC is working on changing their culture, but they have a long way to go, and our court system isn’t much better.

The following story gives a glimpse at the stealth under which the SEC and the courts operate, to say nothing of their loose ethics. Someone has to be held accountable, but it’s the government, so I guess no one will be.

The story begins with a sketchy relationship between D.C. and the SEC coming to light and, smack in the middle of it, is an enforcement lawyer who wants to run for Congress. The enforcement lawyer is investigating a corporation, interviews a whistle blower during the course of the investigation, and then provides the corporation he’s investigating with the whistleblower’s name.

As if that’s enough, the enforcement lawyer then posts the whistleblower’s name on his campaign site, further invading the whistleblower’s privacy and future job prospects.

The enforcement lawyer is not a bit sorry and there has been no justice in this case.

You can’t make this stuff up.

Specifically, a JP Morgan Chase compliance officer came across possible wrongdoing by Chase and informed the SEC. One of the SEC enforcement lawyers interviewed this whistleblower, who was assured that the information would be kept confidential.

The SEC enforcement lawyer then gave the whistleblower’s name to Chase, the subject of the investigation and the whistleblower’s employer, who then fired him.

The SEC’s Inspector General found that the enforcement lawyer improperly disclosed protected, nonpublic information about a whistleblower to the counsel for that whistleblower’s employer. It was in clear violation of their ethical standards, which are apparently not to be taken too seriously since the SEC chose not to act and the enforcement lawyer resigned soon after.

That should not be surprising. The SEC  only recently acted on the fate of the people involved in the Madoff fiasco, with only one being fired.

The compliance officer then filed a complaint with the Tenth Judicial which dismissed the complaint without releasing any information as to how they came to this conclusion,which is especially concerning since the available evidence points to a different conclusion.

The compliance officer did not give up on his case and filed subsequent complaints, with all coming to the same conclusion and all claiming they cannot release any details of their discussions or investigations, if there were investigations.

Their claim that they cannot release the documents for public scrutiny is disingenuous when one considers the fact that the enforcement lawyer released the compliance officer’s name on a campaign site in violation of Judiciary Law 90(10).

In 1985, when Roy Cohn was recommended for disbarment, the records of disciplinary hearings were unsealed because¬†the confidentiality of the proceedings were compromised when Cohn discussed the proceedings in an interview with The New York Times published July 11. The same principle should apply in this case since the enforcement lawyer compromised the confidentiality when he posted the compliance officer’s name and information about the case.

I didn’t begin this article with the subjects names because it is important to look at the twisted process which is so symptomatic of our system. It’s unfair and it’s time to break up this exclusive club of stealthy operatives.

The enforcement lawyer is George Demos who hopes to become the Congressman from CD-1 on Long Island. If he’s innocent and ethical as he claims, he can prove it by releasing the records.

Did the courts even investigate during the judicial review or did they all have a brief chat over drinks at a swank bar? How would we know?

 

 

 

 

 

 

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