Anchor ads are not supported on this page.

4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Snug and Smug at the Hotel Del

The Del is set to host a conference dealing with Wall Street whistle-blowers.
The Del is set to host a conference dealing with Wall Street whistle-blowers.

Gary Aguirre heads a San Diego law firm that since February has specialized in representing whistle-blowers, those who blow the whistle on financial fraud — often inside the companies they work for — and government employees who see wrongdoing within their agencies.

On January 20 at the Hotel del Coronado, a panel of nationally known securities silk-suiters will hold a seminar on what to do about whistle-blowers. Aguirre won’t be there. One reason is that he has blown the whistle loudly on some of those panelists while he battled the federal Securities and Exchange Commission.

More than almost anybody, Aguirre has publicly stated how this commission, born in the 1930s to protect the public from Wall Street, now protects Wall Street from the public. The mechanism is what Aguirre calls the “rotating door.” A law firm will dangle a juicy job in front of a securities commission lawyer who is investigating the law firm’s client. The rascal gets off and — voilà! — the agency lawyer gets a $2-million-a-year job with the law firm.

This works the other way, too. When the securities agency is looking for a lawyer to run its enforcement division, it is likely to select one from a powerful Wall Street law firm rather than from within its own ranks. These private-sector attorneys who take lofty temporary posts at the agency “are Wall Street players on sabbatical at the SEC,” says Aguirre.

Sponsored
Sponsored

This month, “the rotating door comes to San Diego,” says Aguirre. The 39th-annual Securities Regulation Institute will be held at the Hotel Del January 18–20. The seminar focusing on whistle-blowers will be from 9:00 to 10:30 a.m. January 20.

The panelists are Robert Khuzami, director of enforcement of the securities commission, formerly an attorney for the German giant Deutsche Bank; Richard Walker, a former securities-agency enforcement director who is now general securities counsel for Deutsche Bank; and Stephen Cutler, still another former enforcement director who is now general counsel at Wall Street’s JPMorgan Chase.

Mary Jo White of the Wall Street law firm Debevoise & Plimpton will moderate. She was once the U.S. attorney for the Southern District of New York, which prosecutes criminal securities cases.

You can see a pattern here. Some call it “Wall Street–Washington incest.” As Aguirre explains, this incestuous relationship between the regulators and the regulated is a major reason the Securities and Exchange Commission lets the Bernie Madoffs of the world off the hook.

As Matt Taibbi wrote in the August 17 issue of Rolling Stone, the route by which Walker left the securities agency and landed the remunerative job at Deutsche Bank is redolent of the rotating door. In 2000, Darcy Flynn, one of Aguirre’s current clients, was on a securities-agency team of investigators looking into possible violations by Deutsche Bank. Its chief executive had told the press that Deutsche Bank was not interested in acquiring New York–based Bankers Trust. The bank’s stock plunged on the news; ergo, Deutsche Bank could buy it at a lower price. It eventually bought it. Investigators considered the case a slam dunk. Deutsche Bank took the usual course: it hired still another former securities-agency enforcement chief, Gary Lynch, to argue the institution’s case.

Suddenly, commission investigators got word that Walker, the agency’s head of enforcement, had recused himself from the case, and two weeks later the inquiry was jettisoned. It soon became obvious why: Walker was named general counsel of Deutsche. Wrote Taibbi, “Less than 10 weeks after the SEC shut down its investigation of the bank, the agency’s director of enforcement was handed a cushy, high-priced job at Deutsche.”

Then, in 2004, Walker hired a young federal prosecutor to become his protégé at Deutsche. His name: Robert Khuzami.

Well, it came to pass that on May 18 of this year, Khuzami, now himself head of enforcement at the securities commission, shot out a mass email to agency staffers saying he wanted examples of “lawyers behaving badly.” Actually, Khuzami wanted examples of outside lawyers misbehaving.

But Flynn thought Khuzami wanted examples of wayward attorneys inside the Securities and Exchange Commission. So Flynn sent him a decade-old example: the dumping of the Deutsche Bank investigation right before Walker departed as enforcement chief to become a lawyer for the big German bank.

“When Flynn sent his letter to Khuzami complaining about misbehavior by Walker, he was calling out Khuzami’s own mentor,” wrote Taibbi.

Flynn has gone on to become a nationally famous whistle-blower and still has a job at the agency, thanks in part to Aguirre. In July, Flynn told Congress that the Securities and Exchange Commission since 1993 has been destroying information on so-called “Matters Under Inquiry,” or preliminary look-sees into possible securities fraud. The agency earlier had worked out an arrangement with the National Archives and Records Administration that all records, including those related to preliminary investigations, should be maintained for 25 years. But the securities commission has ignored — possibly illegally — this agreement.

It has destroyed preliminary files on Ponzi schemer Bernie Madoff, the now-bankrupt Lehman Brothers, and beleaguered Goldman Sachs, among many miscreants.

That’s why Flynn, knowing the agency’s proclivity for getting revenge on whistle-blowers, hired Aguirre. Senator Chuck Grassley, senior Republican on the Senate Judiciary Committee, believes the Securities and Exchange Commission “might have sanctioned some level of case-related document destruction.”

Back in 2005, Aguirre worked for the securities commission and was fired after he wanted to pursue an insider trading case against a Wall Street hotshot. Grassley’s committee, and one other Senate committee, along with the agency’s inside investigator, sided with Aguirre in the matter. He got a generous settlement from the agency. And who do you think stabbed Aguirre in the back when he wanted to go after the hotshot? Mary Jo White, the ex–government prosecutor, now big-shot Wall Street lawyer, who will moderate the whistle-blowing seminar at the Del.

Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Why Unified® Review: What To Expect Dropshipping (Positive & Negative)

The Del is set to host a conference dealing with Wall Street whistle-blowers.
The Del is set to host a conference dealing with Wall Street whistle-blowers.

Gary Aguirre heads a San Diego law firm that since February has specialized in representing whistle-blowers, those who blow the whistle on financial fraud — often inside the companies they work for — and government employees who see wrongdoing within their agencies.

On January 20 at the Hotel del Coronado, a panel of nationally known securities silk-suiters will hold a seminar on what to do about whistle-blowers. Aguirre won’t be there. One reason is that he has blown the whistle loudly on some of those panelists while he battled the federal Securities and Exchange Commission.

More than almost anybody, Aguirre has publicly stated how this commission, born in the 1930s to protect the public from Wall Street, now protects Wall Street from the public. The mechanism is what Aguirre calls the “rotating door.” A law firm will dangle a juicy job in front of a securities commission lawyer who is investigating the law firm’s client. The rascal gets off and — voilà! — the agency lawyer gets a $2-million-a-year job with the law firm.

This works the other way, too. When the securities agency is looking for a lawyer to run its enforcement division, it is likely to select one from a powerful Wall Street law firm rather than from within its own ranks. These private-sector attorneys who take lofty temporary posts at the agency “are Wall Street players on sabbatical at the SEC,” says Aguirre.

Sponsored
Sponsored

This month, “the rotating door comes to San Diego,” says Aguirre. The 39th-annual Securities Regulation Institute will be held at the Hotel Del January 18–20. The seminar focusing on whistle-blowers will be from 9:00 to 10:30 a.m. January 20.

The panelists are Robert Khuzami, director of enforcement of the securities commission, formerly an attorney for the German giant Deutsche Bank; Richard Walker, a former securities-agency enforcement director who is now general securities counsel for Deutsche Bank; and Stephen Cutler, still another former enforcement director who is now general counsel at Wall Street’s JPMorgan Chase.

Mary Jo White of the Wall Street law firm Debevoise & Plimpton will moderate. She was once the U.S. attorney for the Southern District of New York, which prosecutes criminal securities cases.

You can see a pattern here. Some call it “Wall Street–Washington incest.” As Aguirre explains, this incestuous relationship between the regulators and the regulated is a major reason the Securities and Exchange Commission lets the Bernie Madoffs of the world off the hook.

As Matt Taibbi wrote in the August 17 issue of Rolling Stone, the route by which Walker left the securities agency and landed the remunerative job at Deutsche Bank is redolent of the rotating door. In 2000, Darcy Flynn, one of Aguirre’s current clients, was on a securities-agency team of investigators looking into possible violations by Deutsche Bank. Its chief executive had told the press that Deutsche Bank was not interested in acquiring New York–based Bankers Trust. The bank’s stock plunged on the news; ergo, Deutsche Bank could buy it at a lower price. It eventually bought it. Investigators considered the case a slam dunk. Deutsche Bank took the usual course: it hired still another former securities-agency enforcement chief, Gary Lynch, to argue the institution’s case.

Suddenly, commission investigators got word that Walker, the agency’s head of enforcement, had recused himself from the case, and two weeks later the inquiry was jettisoned. It soon became obvious why: Walker was named general counsel of Deutsche. Wrote Taibbi, “Less than 10 weeks after the SEC shut down its investigation of the bank, the agency’s director of enforcement was handed a cushy, high-priced job at Deutsche.”

Then, in 2004, Walker hired a young federal prosecutor to become his protégé at Deutsche. His name: Robert Khuzami.

Well, it came to pass that on May 18 of this year, Khuzami, now himself head of enforcement at the securities commission, shot out a mass email to agency staffers saying he wanted examples of “lawyers behaving badly.” Actually, Khuzami wanted examples of outside lawyers misbehaving.

But Flynn thought Khuzami wanted examples of wayward attorneys inside the Securities and Exchange Commission. So Flynn sent him a decade-old example: the dumping of the Deutsche Bank investigation right before Walker departed as enforcement chief to become a lawyer for the big German bank.

“When Flynn sent his letter to Khuzami complaining about misbehavior by Walker, he was calling out Khuzami’s own mentor,” wrote Taibbi.

Flynn has gone on to become a nationally famous whistle-blower and still has a job at the agency, thanks in part to Aguirre. In July, Flynn told Congress that the Securities and Exchange Commission since 1993 has been destroying information on so-called “Matters Under Inquiry,” or preliminary look-sees into possible securities fraud. The agency earlier had worked out an arrangement with the National Archives and Records Administration that all records, including those related to preliminary investigations, should be maintained for 25 years. But the securities commission has ignored — possibly illegally — this agreement.

It has destroyed preliminary files on Ponzi schemer Bernie Madoff, the now-bankrupt Lehman Brothers, and beleaguered Goldman Sachs, among many miscreants.

That’s why Flynn, knowing the agency’s proclivity for getting revenge on whistle-blowers, hired Aguirre. Senator Chuck Grassley, senior Republican on the Senate Judiciary Committee, believes the Securities and Exchange Commission “might have sanctioned some level of case-related document destruction.”

Back in 2005, Aguirre worked for the securities commission and was fired after he wanted to pursue an insider trading case against a Wall Street hotshot. Grassley’s committee, and one other Senate committee, along with the agency’s inside investigator, sided with Aguirre in the matter. He got a generous settlement from the agency. And who do you think stabbed Aguirre in the back when he wanted to go after the hotshot? Mary Jo White, the ex–government prosecutor, now big-shot Wall Street lawyer, who will moderate the whistle-blowing seminar at the Del.

Comments
Sponsored
Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Mid-range fleet scoring bluefin limits off Ensenada

Rockfish to open at all depths April 1st (no foolin’)
Next Article

Yo-Yo Ma, Wagner, and Tchaikovsky come to San Diego

Comments
Ask a Hipster — Advice you didn't know you needed Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Drinks All Around — Bartenders' drink recipes Excerpts — Literary and spiritual excerpts Feast! — Food & drink reviews Feature Stories — Local news & stories Fishing Report — What’s getting hooked from ship and shore From the Archives — Spotlight on the past Golden Dreams — Talk of the town The Gonzo Report — Making the musical scene, or at least reporting from it Letters — Our inbox Movies@Home — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Outdoors — Weekly changes in flora and fauna Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Sheep and Goats — Places of worship Special Issues — The best of Street Style — San Diego streets have style Surf Diego — Real stories from those braving the waves Theater — On stage in San Diego this week Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close

Anchor ads are not supported on this page.