SEC under Schapiro struggles to turn around amid political, financial head winds

[alp227]

Mary L. Schapiro took over a discredited SEC in early 2009 and vowed to rebuild it.

She promised tougher enforcement — “war without quarter” on financial fraud. Modernized rules to keep up with Wall Street. And a new, more effective organization.

Her tenure at the federal agency responsible for protecting investors and policing markets offers a Washington lesson: Even when epic crises create a sense of urgency, it is tough to tighten the reins on powerful industries. Dramatic results can prove elusive.

On Schapiro’s watch, federal judges and other critics have accused the Securities and Exchange Commission of accepting feeble settlements in major cases of alleged corporate wrongdoing. The cases have reinforced the impression that the SEC lacks not only the means but also the mind-set to hold powerful wrongdoers accountable, perhaps because the agency is too close to the world it oversees.

full: http://www.washingtonpost.com/business/economy/sec-under-schapiro-struggles-to-turn-around-amid-political-financial-head-winds/2011/09/19/gIQACYnxTL_singlePage.html

[elleng]

1. Won 't be unusual for business in D.C.

'the agency is too close to the world it oversees.'

Its true of most of the agencies. That's 'life in the big city.'

[chill_wind]

2. And the penalty for this

(among so many other things in the piece) is what exactly?

"In another controversy, a member of the enforcement staff has been alleging that the SEC has routinely broken the law by purging records of inquiries it has closed without taking enforcement action or conducting full-fledged investigations.

The information could be used to hold the agency accountable and detect patterns of wrongdoing over time.

The official, Darcy Flynn, last year notified the National Archives, which oversees the preservation of government records. In July, Flynn’s attorney reported his allegations to a member of the Senate and invoked whistleblower protection. Last month, Flynn alleged that the document destruction included a wider array of case files and was still occurring a year after the National Archives demanded an explanation from the SEC."

SEC still destroying records illegally, whistleblower says
By David S. Hilzenrath, Published: September 6 2011

A year after it was warned that it might be violating federal law, the Securities and Exchange Commission is still breaking the law by destroying records of closed enforcement cases, a lawyer in the agency’s enforcement division has alleged.

In addition, the purging of files has involved a wider range of investigative documents than previously reported, according to a signed statement by the enforcement lawyer.


The new allegations are contained in a statement dated Tuesday by Darcy Flynn, a longtime SEC employee involved in managing records for the enforcement division.

http://www.washingtonpost.com/business/economy/sec-still-destroying-records-illegally-whistleblowers-lawyer-says/2011/09/06/gIQAAD7E7J_story.html