Senators Wonder Why SEC Employees Have Not Been Fired or Demoted
This particular scheme, run by R. Allen Stanford, affected a lot of folks in my area. Apparently the SEC knew about it as early as 1997, but waited 12 years - 12 years! - to bring charges. That’s twelve years of people investing (and losing) money, that didn’t have to happen.
WASHINGTON (AP) — Senators pressed the Securities and Exchange Commission’s chief enforcement official Wednesday to explain why the agency has yet to demote or fire staffers who waited 12 years to bring charges against an alleged major Ponzi scheme.
The SEC inspector general found that the agency knew since 1997 that R. Allen Stanford was likely operating a Ponzi scheme. But it didn’t charge the billionaire until February 2009. The charges came a few months after the massive pyramid scheme of financier Bernard Madoff surfaced.
Also at a Senate hearing, the SEC inspector general called “suspicious” the timing of the agency’s filing civil fraud charges in April against Goldman Sachs & Co. in connection with sales of mortgage-related investments.
The inspector general, David Kotz, has been investigating the timing of the Goldman suit. He said Wednesday his office has been looking at whether it was tied to other factors, such as passage of the financial overhaul law, or to dampen the negative effect of his report on the SEC’s handling of the Stanford case - which was released the same day.