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According to the Wall Street Journal, the Senate Finance Committee has asked David Kotz, the inspector general of the Securities and Exchange Commission, to review the recent departure of a top SEC official who went with a high-frequency trading firm. Kotz replied that he is looking into "a prominent law firm's significant ties with the SEC." The prevalence of SEC attorneys leaving the agency to join this firm may have led to the agency's failure to take appropriate actions in a matter involving the law firm, Kotz said. Kotz knows, but isn't saying, that the big Wall Street law firms control the SEC by dangling big jobs in front of SEC lawyers supposedly investigating the firms' clients.

There are a couple of local examples. San Diegan Gary Aguirre worked for the SEC. He wanted to interview John Mack on suspicion that he had passed information on a pending merger to hedge fund Pequot. Mack was being considered for the top job at Morgan Stanley. (He got it.) The firm hired a big law firm that massaged agency brass behind Aguirre's back. Aguirre's boss let the word out that he would like a job with that law firm. He got one. Aguirre was fired. The agency official who passed on the word that Berger might like to join the law firm was Lawrence West. Two Congressional committees and Kotz investigated the Aguirre situation. All sided with Aguirre. (Pequot recently closed down after insider trading evidence surfaced in a related case.)

Lawrence West had been the SEC official in charge of the Peregrine Systems fraud. John Moores, who had dumped $487 million of Peregrine stock during the fraud period, hired Chuck La Bella to quarterback a whitewash of the Peregrine board, including Moores. The law firm doing the study was Latham & Watkins. West blessed the Latham & Watkins study. In 2005, he went to work for Latham & Watkins. Moores walked -- to Houston.

There is no evidence that Kotz was talking about either the Pequot or Peregrine situations.

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Comments

a2zresource June 16, 2010 @ 2:26 p.m.

"Lawrence West had been the SEC official in charge of the Peregrine Systems fraud. John Moores, who had dumped $487 million of Peregrine stock during the fraud period, hired Chuck La Bella to quarterback a whitewash of the Peregrine board, including Moores. The law firm doing the study was Latham & Watkins. West blessed the Latham & Watkins study. In 2005, he went to work for Latham & Watkins."

Latham & Watkins figured prominently in the local dismissal of criminal charges last year against SDG&E before retrial, after initial guilty verdicts in 2007.

The amusing aspect of the Latham & Watkins clever lawyering was that it apparently was enough to get the District Court to ignore part of the Clean Air Act that mandated the use of "more stringent" state standards against defendants in an environmental asbestos release matter. There's an interesting law review article by Latham & Watkins attorneys on how to get around the Clean Air Act's National Emission Standards for Hazardous Air Pollutants ("The EPA's Prosecution of Clean Air Act Asbestos NESHAP Cases Based Upon Nonbinding Bulk Material Test Methods," 44 San Diego Law Review 173).

Doesn't the Constitution have something to say about judges being bound by the laws passed by Congress?

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Don Bauder June 16, 2010 @ 4:11 p.m.

Response to post #1: One of the most pressing needs in San Diego County is a thorough review of judicial performance -- not only in Superior Court, but also in federal court. Best, Don Bauder

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SurfPuppy619 June 16, 2010 @ 4:53 p.m.

Doesn't the Constitution have something to say about judges being bound by the laws passed by Congress?

hahahahhahaa................very funny a2z!!!!

Please, it is too early in the evening to bring me the funny!

Judges will stretch and bend the law however they want it to fit.

If they cannot stretch nor bend the law enough to get the ruling they want they will simply IGNORE it. Or worse, they will lie under oath-commit perjury- to get the result they want.

These things have ALL happened to me in court. I have caught two judges in red handed, black and white, straight up perjury. Did they lose their law license? No. Did they lose their judgeship? No. Were they disciplined in any manner whatsoever? No.

In fact I ended up having to tell both of these losers off, it was the only consequences they faced-and they tried to make me look like the bad guy for doing that (yes, I was paid a visit by the FBI just for telling off a dirty judge, under the pretext that I might be a “danger”).

Like all areas of professional responsibility and ethics, the standard has been lowered.

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Don Bauder June 16, 2010 @ 5:59 p.m.

Response to post #3: I don't doubt what you say a bit. Best, Don Bauder

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