NO QUARTER FOR CORRUPTION (Focussing on The Fed./FRBS)

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Why Are So Many "Lifers" Leaving The SEC?


Location: BlogsBob O'Brien's Sanity Check Blog
Posted by: bobo 1/10/2006 8:12 PM
(NOTE - Since this was published, another enforcement attorney left the SEC - see the comments section of this blog for more on that.)

It seems like 2005 was a big year for departures from the SEC.

A lot of folks took off, deciding that it was best to end their period of "public service."

Why is that, do you think?

I've heard several explanations, and I will tell you the one I favor. I've heard speculations that the folks in enforcement and at the top are bailing faster than a deckhand on a Jamaican fishing scow because they see that the roof is about to blow off on the naked short selling crisis.

I've heard that they are demoralized and disgusted with an agency that is perennially understaffed, and is woefully inadequate to the job it is chartered with.

I've heard that some fear the personal liability that comes from colluding with the industry which they are chartered to regulate.

I'll tell you what I think.

I think that it is a good time to get out, because the money is flowing like Crystal at a rap video shoot, and $700 an hour jobs are waiting for many who have been so very helpful in their understanding of the difficulties that go with making billions, while producing nothing tangible.

I also think that is why the Commission is so accommodative for the industry - if you know that at the end of your stint you are guaranteed a high paying gig working for a law firm that will be representing Wall Street, do you want to be the guy remembered as the one that made life difficult for them? You will be pumping gas in Keokuk, Iowa if you do that, not buzzing around on Hawkers to the next cushy conference while double billing for your travel expenses, with a wink and a nod from the top.

As in all things, the truth is mundane. Many can be bought for a pittance in the scheme of things, and those that don't need the money are pandered to in other ways. And the payday isn't as obvious as a garbage bag of hundreds, or an anonymous card drawing from an offshore account through Bank of New York ATMs. Instead, it is more subtle, and equally effective. Live at the top of the firm's foodchain, the big house in Georgetown, a ten year run at a half a mil a year for doing not much of anything.

The industry takes care of its own, and only a fool bites the hand that it is understood will be feeding it tomorrow.

That is my theory, and it jives with what I've heard - actually explains a lot, as to why a whole agency seems predisposed to favor the industry over the investor at every turn.

It's the money, stupid.

Copyright ©2006 Bob O'Brien

Link: http://www.thesanitycheck.com/BobsSanityCheckBlog/tabid/56/EntryID/12/Default.aspx