Wednesday, August 17, 2011

SEC may have destroyed crucial probe data: senator

Chuck Grassley said that "an agency
whistle-blower" sent him a letter about
 the SEC's alleged destruction of records
© AFP/File Mandel Ngan

WASHINGTON (AFP) - A US senator said Wednesday that the Securities and Exchange Commission may have destroyed thousands of documents related to probes into possible violations by major banks and hedge funds.

Senior Republican Senator Chuck Grassley said that "an agency whistle-blower" sent him a letter that described the SEC's allegedly unlawful destruction of records related to more than 9,000 informal investigations.

The documents included cases arising from the 2008-2009 financial crisis, including Goldman Sachs, AIG, and the Bernard Madoff pyramid fund, according to the whistle-blower, Grassley said.

The whistle-blower, 13-year SEC lawyer Darcy Flynn, said the destroyed records related to "matters under inquiry" or MUIs -- probes that precede the launch of formal investigations.

"From what I've seen, it looks as if the SEC might have sanctioned some level of case-related document destruction," Grassley said in a statement.

"It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence."

According to a letter from Grassley to SEC chairwoman Mary Schapiro, Flynn said some of the destroyed documents related to Goldman Sachs, Wells Fargo, Bank of America, Deutsche Bank, Lehman Brothers, and SAC Capital -- many of which played a major role in the 2008 crisis -- as well as Madoff, jailed for the biggest financial scam in US history.

The destruction of such documents "would appear to greatly handicap the SEC's ability to create patterns in complex cases and calls into question the SEC's ability to properly retain and catalog documents," Grassley said.

An article published online Wednesday by Rolling Stone magazine said Flynn had presented his evidence of document destruction dating as far back as 1993 to three congressional committees in recent months.

The magazine suggested that the document destruction helped cover up wrongdoing in the securities and banking industries.

Flynn "paints a startling picture of a federal police force that has effectively been conquered by the financial criminals it is charged with investigating," Rolling Stone said.

"In at least one case, according to Flynn, investigators at the SEC found their desire to investigate an influential bank thwarted by senior officials in the enforcement division -- whose director turned around and accepted a lucrative job from the very same bank."

SEC spokesman John Nester declined to comment on the letter, but said that "as a general matter... there's no requirement that every document obtained by an agency in the course of its work be retained."

"If it's a document we obtain in the course of an investigation, we retain those documents for 25 years, but for a MUI that doesn't become an investigation, we maintain a record of that," he said.

Such a document could then be re-obtained from the original source if necessary, he added.

© AFP -- Published at Activist Post with license

This article may be re-posted in full with attribution.


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apeman2502 said...

Just maybe, to compliment the easing of theft barriers by Bush41, Bush 43 ventured to appoint SEC agents who would accept $200,000 a year to sit around watching pornography on their computers to the neglect of ambitiously prosecuting. This would constitute a conspiracy to loot the treasure of the U.S. by Bush41&43 and their friends, and establish a case for treason. TEN YEARS AGO. Along with 9-11, the Maconda prospect oil well blow out,the lie to murder and steal in Iraq and Afghanistan,the acts of illegal wars,and the rampant destruction of evidence concerning Wall Street and many other instances constitute capital crime of the worst kind.

This new information should surprise not a single person half conscious about the U.S..Bush flies the Jolly Roger. He admits it, and calls it secret, and on hearing this, wannabe journalists prance back to their offices. Their headlines read, "I am so amazed!". I would rather have my head dipped in molten wax then write for a bunch of vulture hacks like 'Rolling Stone' magazine. Hunter S. Thompson had his ashes blasted so he would not crawl up out of his grave to end the lifeforce of 'Rolling Stone'. These crimes are OLD NEWS. YEARS OLD. COVER THAT. Do the public a favor.

Anonymous said...

Grassley, contact these folks. Sounds like they might have some info they can submit to you.

Anonymous said...

"It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence."

It does if the SEC is corrupt!

Miguel Grande said...

Nearly 10 years ago, the World Trade Center 7, held financial records that could imprison the top tier of Wall St criminals. The records held within were imperative in over 4000 SEC investigations into the Dotcom bubble. Flight 93 was intercepted by the USAF 119th Fighter Wing and shot down over Pennsylvania by Major Rick Gibney. The plane was headed for New York and WTC 7.

In a panic, Cheney and his Neo-Con crew, had to change the plan. They re-issued scripts to the media that said that at 5:00 PM the Saloman Building WTC7 collapsed due to weakening of its structure by fire and debris from Towers 1&2. CNN and the BBC kept true to the new schedule and announced the collapse. Unfortunately, the building still stood intact in their live back round shot. It was imperative that the building be destroyed so at 5:23 the area was cleared and the building was demolished by the nano-thermite charges that had been carefully set in the year previous. The main stream media concocted a cover up of the 8 mile debris field in Pennsylvania and the Shanksville crash site that had no airplane parts or bodies. Let's Roll.

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