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Watchdog report shows how Wall Street law firms manipulate SEC

Villain is "revolving door" -- securities agency lawyers getting hired by white shoe firms

The Project on Government Oversight (POGO) released this morning (Feb. 11) another report on how Wall Street law firms influence the Securities and Exchange Commission (SEC) by hiring its lawyers for fat compensation. The quid pro quo is Wall Street titans, clients of the big firms, getting away with frauds that would have an ordinary stockbroker subject to severe discipline, or if the case were referred to a criminal agency, landing behind bars. After studying thousands of government documents, POGO found that former staff members of the SEC routinely: 1. Tried to help corporations influence agency rulemaking; 2. Defended companies suspected of wrongdoing; 3. Helped companies soften the blow of enforcement actions; 4. Won exemptions from federal law for their clients, and 5. Secured the agency's blessing for companies to bock shareholder proposals on issues such as excessive executive pay. From 2001 through 2010, 419 former SEC employees filed 1,949 disclosure statements indicating their intent to contact the SEC on behalf of an employer or client. POGO earlier released a similar report.

"The relentless flow of SEC officials to and from industry can enable powerhouse firms to shape the SEC's culture and sway policies," says Michael Smallberg, author of the POGO report. POGO says the study is particularly relevant in light of President Obama's nomination of Mary Jo White, a former top partner of Debevoise and Plimpton, to head the SEC.

San Diego attorney Gary Aguirre has been outspoken about the revolving door. Columnist Matt Taibbi of Rolling Stone has followed the issue closely, as has the Reader.

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The Project on Government Oversight (POGO) released this morning (Feb. 11) another report on how Wall Street law firms influence the Securities and Exchange Commission (SEC) by hiring its lawyers for fat compensation. The quid pro quo is Wall Street titans, clients of the big firms, getting away with frauds that would have an ordinary stockbroker subject to severe discipline, or if the case were referred to a criminal agency, landing behind bars. After studying thousands of government documents, POGO found that former staff members of the SEC routinely: 1. Tried to help corporations influence agency rulemaking; 2. Defended companies suspected of wrongdoing; 3. Helped companies soften the blow of enforcement actions; 4. Won exemptions from federal law for their clients, and 5. Secured the agency's blessing for companies to bock shareholder proposals on issues such as excessive executive pay. From 2001 through 2010, 419 former SEC employees filed 1,949 disclosure statements indicating their intent to contact the SEC on behalf of an employer or client. POGO earlier released a similar report.

"The relentless flow of SEC officials to and from industry can enable powerhouse firms to shape the SEC's culture and sway policies," says Michael Smallberg, author of the POGO report. POGO says the study is particularly relevant in light of President Obama's nomination of Mary Jo White, a former top partner of Debevoise and Plimpton, to head the SEC.

San Diego attorney Gary Aguirre has been outspoken about the revolving door. Columnist Matt Taibbi of Rolling Stone has followed the issue closely, as has the Reader.

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Comments
6

no surprises here

Feb. 11, 2013

Murphyjunk: Agreed. The Reader has been reporting on this for several years, as have, nationally, Rolling Stone, the New York Times, and some other publications. But that doesn't mean the message has sunk in. Mary Jo White's nomination provides the opportunity to tell this sordid story in more detail. Best, Don Bauder

Feb. 11, 2013

The part that amazes is that after the near melt-down of the economy in 2008-9, and the economic malaise that has followed, worst since the 1930's, nothing has really changed. Some real reforms came out of the New Deal, but this time, we are still waiting. Any culture of public service and sacrifice by these big-wigs for the good of the nation is just a memory. The culture still puts main emphasis on personal enrichment and wealth accumulation.

Feb. 11, 2013

Visduh: You are exactly right. Greed is more deeply inculcated in our current culture than it was in other times -- say, 40 or 50 years ago. I can remember from my early reporting days in the 1960s and 1970s that SEC officials were dedicated in rooting out fraud, and frowned on their colleagues who sold out to Wall Street. And they were dedicated to rooting out fraud of large companies -- not just small fish too frail to fight back. Best, Don Bauder

Feb. 11, 2013

Same old Same old, move along, won't change, $$$$ rules the country.

Feb. 11, 2013

SurfPup: Yes, but I maintain that money is more powerful and more nauseating in these times than in any period since the days of the robber barons. Greed goes in cycles. Best, Don Bauder

Feb. 11, 2013

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