Your SEC at work....

I awoke this morning to read that a former U.S. Securities and Exchange Commission official has credibly claimed that the S.E.C. destroyed thousands upon thousands of records of enforcement cases in which it had decided not to file charges or to launch full-blown probes. The case records dumped included prominent Wall Street firms such as Goldman Sachs, Citigroup, Bank of America, Morgan Stanley and SAC Capital.

Here’s is how Rolling Stone concluded its excellent report on the scandal:

“Forget about what might have been if the SEC had followed up in earnest on all of those lost MUIs(“Matters Under Inquiry”). What if even a handful of them had turned into real cases? How many investors might have been saved from crushing losses if Lehman Brothers had been forced to reveal its shady accounting way back in 2002? Might the need for taxpayer bailouts have been lessened had fraud cases against Citigroup and Bank of America been pursued in 2005 and 2007? And would the U.S. government have doubled down on its bailout of AIG if it had known that some of the firm’s executives were suspected of insider trading in September 2008?” Continue reading →