SEC Malfeasance

You have no doubt hear all about the big news coming out of the Securities and Exchange Commission last Friday.

If you think I'm referring to its lawsuit against Goldman Sachs, that's because the SEC got away with its Goldman bomb to deflect attention from its malfeasance in the Standford Group's $8 billion Ponzi scheme.

The SEC's own inspector general investigated the SEC's actions (or more accurately inactions) regarding Stanford. And the report, buried on the SEC's website, paints a devastating picture of the regulatory agency defaulting on its core mission - to protect investors from fraud.

The SEC's investigators believed Stanford was a Ponzi scheme in 1997 and referred the case to its enforcement division to prosecute. If the SEC had done this, most of the $8 billion of money lost would have never occurred - since Standford's Ponzi scheme grew in size and scope over the next 11 years.

When the inspector general asked why the case against Stanford wasn't brought, he was told the SEC preferred to bring cases against prominent firms that we easy to win.

Naturally the Democrats response to the financial crisis is to give more money and authority to such a bankrupt organization.

And when the SEC does bring case, such as the one against Goldman Sachs, don't assume it does so for honorable reasons.