• Scam Diego alerts

The Securities and Exchange Commission has ended its investigation into the involvement of San Diego's elected officials in the fraudulent bond offerings. This comes at the very time that the SEC will be investigating itself (supposedly); it admits that it had credible information on the alleged $50 billion Ponzi scheme of Bernard Madoff, but didn't act. This is the agency's modus operandi. It does NOT act against the rich and powerful, unless it is forced to do so in highly-publicized cases such as Madoff, Worldcom and Enron. It chases small-time pump-and-dumpers and people trading on inside information, but ignores those who rake in hundreds of millions in such scams. In the San Diego case, the council structured an increase in benefits and decrease in income that created a debt that was not taken to public vote. These councilmembers personally benefited from these benefit increases -- including some who had previously worked for the City, so got double-goodies. During this period, the council hired former SEC lawyers who specifically told them what had to be revealed publicly in bond offerings. But when those offerings came out, the information about the City's damaging pension liabilities was not revealed. The councilmembers keep saying they relied on advice of others, but the advice they got from the former SEC lawyers was to reveal, not conceal. It was clear many months ago that the SEC would do nothing to elected officials. There are both criminal and civil cases against bureaucrats who were down the line, but not against the people at the top. This is absolutely typical of the SEC and other so-called law enforcement agencies as well. I love the statement by Jim Madaffer's lawyer: "The SEC is the authoritative voice on this." Tragically true. By choosing a longtime Washington insider, Mary Schapiro, to head the SEC, it appears that President-elect Obama has no intention of changing the system. Money talks.

  • Scam Diego alerts

Comments

valueinvestingisdead Dec. 26, 2008 @ 9:01 p.m.

When you think about it, every company is a ponzi scheme. The top get loaded off the backs of the workers, who are often underpaid. They slash jobs while paying themselves bonuses.

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Don Bauder Dec. 27, 2008 @ 7:31 a.m.

Response to post #1: That definitely is one way of thinking of our problem. As even Alan Greenspan admitted in his book, the massive disparity between the incomes of the superrich and the middle class and poor may lead to social unrest, if not violence. The UAW has exploited Detroit's Big Three -- no doubt. So a bailout will depend on UAW reforms. Fine. The Detroit bailout may be $35 billion or so. But the U.S. government and Federal Reserve are throwing hundreds of billions at bailing out Wall Street firms that are broke because of incredibly ignorant gambling with derivatives. And the executives are staying in place with their compensation of $50 million to $100 million. Citigroup is raking in more than $300 billion and there hasn't been a single change in management or the board. The government put billions in equity into numerous banks but demanded no changes in outrageous pay levels. There were supposed to be reins on executive pay, but loopholes eliminated them, as predicted. Best, Don Bauder

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