"" For more than 20 years, the Securities and Exchange Commission (SEC) has had a program in place to reward whistleblowers who provide the agency with information about insider trading. But a new audit by the SEC Office of Inspector General (OIG) reveals that the program has almost never been used, is barely recognized inside or outside the SEC, and has fundamental design flaws.
It turns out the SEC has received very few applications in the past two decades for bounties under the program -- and only five people have actually received payments since the program first began:
Design Flaws in the Bounty Program
The OIG also found that the program suffers from the following deficiencies: it's poorly recognized by the public and even within the SEC; the criteria for judging bounty applications is overly vague; the SEC does not have good internal policies to guide staff in reviewing bounty applications; the SEC rarely provides whistleblowers with status reports on their applications (a problem we've also heard about at other IG offices); once the applications are passed on, there are no systems in place to ensure that they are processed in an adequate and timely fashion; and the documentation for bounty referrals is often incomplete.
Many Whistleblowers Are Ignored or Even Subjected to Retaliation
POGO previously reported on anecdotal evidence of the problems described by the SEC OIG.
Writing for Politics Daily, we described how one whistleblower was retaliated against after inquiring whether he would be eligible to receive a bounty payment under the SEC's program. Peter Sivere, who at the time was working as a compliance officer at JPMorgan, first approached the SEC with evidence showing that his employer had failed to disclose documents sought in a wide-ranging SEC probe into a practice known as market timing. He was told that he didn't qualify for a bounty payment, but he provided the information anyway.
But instead of protecting Peter Sivere, the SEC enforcement attorney investigating the matter told JPMorgan's counsel about Peter Sivere's initial inquiry about a cash payment. JPMorgan's counsel then used this information to disparage Peter Sivere's whistleblower credentials at a proceeding before the Occupational Safety and Health Administration, in which Peter Sivere had contended that JPMorgan retaliated against him after he went to the SEC.
A subsequent investigation by the SEC OIG found that the enforcement attorney, George Demos , had violated agency rules by disclosing non-public information in an ongoing investigation, and recommended that disciplinary action be taken. George Demos left the SEC shortly thereafter and is now running for Congress.
OIG's Recommendations
To help correct the many deficiencies in the whistleblower bounty program, the OIG's latest audit recommended that the SEC's Enforcement Division develop a communications plan to publicize its existence; post the application on its website with clear instructions for the whistleblower; establish better policies to follow up with the whistleblower once the complaint is received; develop specific criteria for recommending bounty awards; improve its internal controls for tracking tips and complaints; require that a bounty file with minimum documentation be created for each application; and incorporate best practices from comparable programs run by the Department of Justice (DOJ) and Internal Revenue Services (IRS).
Congressional Reforms and Problems with Other Bounty Programs
In the meantime, Congress is also considering legislation to improve the SEC's whistleblower bounty program. The financial regulatory overhaul bill passed by the House last fall included a provision to authorize the SEC to award bounty payments tied to any judicial or administrative action brought by the SEC (i.e., not just insider trading cases) that results in monetary sanctions of over $1 million.
The provision also enables the whistleblower to receive up to 30 percent of the amount recovered (the current limit is 10 percent).
Senate Banking Committee Chairman Christopher Dodd's (D-CT) bill would go even further, ensuring that the whistleblower receives no less than 10 percent of the monetary sanctions, and allowing the whistleblower to appeal any aspect of the SEC's decision, including whether, to whom, and in what amount to make the award.
We applaud these legislative fixes and hope that the final bill reflects the stronger language proposed by the Senate. However, the SEC should also learn from the shortcomings in comparable whistleblower reward programs run by other agencies.
While the False Claims Act has resulted in over $20 billion in recoveries since 1986, the IRS's program to reward whistleblowers who spot tax problems in their workplace shares some of the same problems uncovered by the SEC OIG.
The IRS program, which was established under the Tax Relief and Health Care Act of 2006, enables whistleblowers to receive between 15 and 30 percent of the collected proceeds.
However, a recent audit by the Treasury Inspector General for Tax Administration found that the IRS's Whistleblower Office does not have a good system in place to manage and track cases, and that no awards have actually been paid out under the new program, in part because the claims can take over a decade to process.
One well-known whistleblower who's still waiting to hear whether he will receive an award is former UBS employee Brad Birkenfeld, who was sentenced to 40 months in prison after he attempted to inform the IRS and DOJ about his role in soliciting wealthy Americans to evade taxes through services provided by the Swiss bank.
Although his ordeal isn't necessarily a reflection on the IRS program, it does highlight the dangers often faced by individuals who blow the whistle on corporate wrongdoing.
In any event, the SEC could use all the help it can get when it comes to handling whistleblower complaints, and we hope that the OIG's recommendations and Congress's legislation will finally enable the SEC to give whistleblowers the protection and recognition they deserve.
-- Michael Smallberg ""Sourcehttp://pogoblog.typepad.com/pogo/2010/04/if-the-sec-has-a-whistleblower-program-but-nobody-ever-uses-it-does-it-really-exist.html
Showing posts with label Peter Sivere. Show all posts
Showing posts with label Peter Sivere. Show all posts
Thursday, April 8, 2010
Speaking Up and Blowing the Whistle is NOT Really Rewarded, You Risk ALL - it Should NOT Be that Way.
" Imagine being in a situation in which you knew you had to be quiet in order to advance your own personal career, rather than speaking up and blowing the whistle on irregularities and improprieties within your firm.
This message is consistently relayed by many a whistleblower who has suffered from having tried to do the right thing. What is the result?
Firms tout their virtuous values of integrity, respect, and excellence while effectively muzzling those who would blow the whistle on crimes and illegal practices.
I believe this reality is all too present in many, if not most, industries in our society today. There is absolutely no doubt it is present on Wall Street. Why do I write this?
A recently released report from the SEC’s Office of Inspector General David Kotz highlights the fact that the ‘whistles on Wall Street’ have been largely silent for a long time.
The Project on Government Oversight highlights this report in a recent commentary,
Not Much Bounty for SEC Whistleblower Program:
For more than 20 years, the Securities and Exchange Commission (SEC) has had a program in place to reward whistleblowers who provide the agency with information about insider trading.
But a new audit by the SEC Office of Inspector General (OIG) reveals that the program has almost never been used, is barely recognized inside or outside the SEC, and has fundamental design flaws.
It turns out the SEC has received very few applications in the past two decades for bounties under the program — and only five people have actually received payments since the program first began:"
Source and Full article with Additional Documents
http://www.senseoncents.com/2010/04/wall-streets-code-of-silence/#comments
Some Comments from On SEC Whistleblowers Above Link
"Does America truly think that a career regulator with longstanding ties within the financial industry can break Wall Street’s “code of silence”? "
" .... make sure America knows that there really is no pretense of investor protection so they can move forward accordingly. "
"Better not to even have the whistleblower program, though, than to pretend it exists. Lastly, the heads of all the banks should be called on the carpet and mandated to outline whistleblower protection programs within their organizations."
"Well, I I guess I thought it has been proven painfully obvious that we had no investor protection from FINRA and that obviously holds true for the SEC as well, but I guess you are right.. the public needs to hear about it again and again until they get it and insist that their representatives take meaningful action to fix things. "
Other Links on Peter Sivere SEC, JP Morgan Whistleblower
SEC IG Report: George Demos Pimped Peter Sivere; (January 28, 2010)
Posted here By
Crystal L. Cox
Investigative Blogger
This message is consistently relayed by many a whistleblower who has suffered from having tried to do the right thing. What is the result?
Firms tout their virtuous values of integrity, respect, and excellence while effectively muzzling those who would blow the whistle on crimes and illegal practices.
I believe this reality is all too present in many, if not most, industries in our society today. There is absolutely no doubt it is present on Wall Street. Why do I write this?
A recently released report from the SEC’s Office of Inspector General David Kotz highlights the fact that the ‘whistles on Wall Street’ have been largely silent for a long time.
The Project on Government Oversight highlights this report in a recent commentary,
Not Much Bounty for SEC Whistleblower Program:
For more than 20 years, the Securities and Exchange Commission (SEC) has had a program in place to reward whistleblowers who provide the agency with information about insider trading.
But a new audit by the SEC Office of Inspector General (OIG) reveals that the program has almost never been used, is barely recognized inside or outside the SEC, and has fundamental design flaws.
It turns out the SEC has received very few applications in the past two decades for bounties under the program — and only five people have actually received payments since the program first began:"
Source and Full article with Additional Documents
http://www.senseoncents.com/2010/04/wall-streets-code-of-silence/#comments
Some Comments from On SEC Whistleblowers Above Link
"Does America truly think that a career regulator with longstanding ties within the financial industry can break Wall Street’s “code of silence”? "
" .... make sure America knows that there really is no pretense of investor protection so they can move forward accordingly. "
"Better not to even have the whistleblower program, though, than to pretend it exists. Lastly, the heads of all the banks should be called on the carpet and mandated to outline whistleblower protection programs within their organizations."
"Well, I I guess I thought it has been proven painfully obvious that we had no investor protection from FINRA and that obviously holds true for the SEC as well, but I guess you are right.. the public needs to hear about it again and again until they get it and insist that their representatives take meaningful action to fix things. "
Other Links on Peter Sivere SEC, JP Morgan Whistleblower
SEC IG Report: George Demos Pimped Peter Sivere; (January 28, 2010)
Posted here By
Crystal L. Cox
Investigative Blogger
Tuesday, March 23, 2010
George Demos: George Demos Pimped Peter Sivere - Larry Doyle Article on George Demos blowing Peter Siveres Cover while at the SEC.
"Posted by Larry Doyle on January 28, 2010 9:02 AM
Who is George Demos?
A former enforcement lawyer in the New York office of the SEC,
currently running for Congress from Long Island.
Who is Peter Sivere? A former compliance employee at JP Morgan.
Sivere crossed paths with Demos in 2004 while providing information related to an investigation of questionable mutual fund trading activity. In the midst of Sivere’s engagement with the SEC, his confidence was violated. I highlighted this reality the other day in writing, “The SEC Pimped Peter Sivere.”
Who at the SEC blew Sivere’s cover? Today we learn it was George Demos.
Kudos to the Project on Government Oversight (POGO) for investigating this case and kudos to Politics Daily for highlighting it today in writing, Long Island Congressional Candidate Cited for Giving up J.P. Morgan Whistleblower:
George Demos is a Republican Congressional candidate from Eastern Long Island whose Web site bears the slogan “Fighting for Freedom,” and touts his service as an enforcement lawyer in the New York office of the Securities and Exchange Commission. A bio says that he “handled some of the SEC’s most significant investigations,” including that of Ponzi scheme artist Bernard Madoff, and “worked tirelessly on the cases that never made the headlines.”
But one case that never made headlines was his own: Demos’ campaign Web site and public statements omit any reference to a report last March of the SEC’s Inspector General (IG), which found he had improperly disclosed protected, nonpublic information about a whistleblower to the counsel for that whistleblower’s employer, a major Wall Street bank, JPMorgan Chase. The IG’s charges of misconduct grew out of an SEC probe that began in 2003 of JPMorgan and other big financial institutions suspected of illegal market practices.
Demos has denied he did anything improper, and his campaign declined to comment on the matter. But documents obtained by the Project On Government Oversight (POGO) — a non-partisan non-profit based in Washington — confirm that Demos was the staff attorney who was cited in the IG report for violating SEC rules.
The IG referred the case to the agency’s management for possible disciplinary action, but the SEC took no action. Soon after that, Demos quietly resigned from his job and launched his bid for a seat in the House of Representatives. "
Source of George Demos - Peter Sivere Article
and Full Article Click Below
http://www.senseoncents.com/2010/01/sec-ig-report-george-demos-pimped-peter-sivere/
Posted Here by
Crystal L. Cox
Industry Whistleblower
Who is George Demos?
A former enforcement lawyer in the New York office of the SEC,
currently running for Congress from Long Island.
Who is Peter Sivere? A former compliance employee at JP Morgan.
Sivere crossed paths with Demos in 2004 while providing information related to an investigation of questionable mutual fund trading activity. In the midst of Sivere’s engagement with the SEC, his confidence was violated. I highlighted this reality the other day in writing, “The SEC Pimped Peter Sivere.”
Who at the SEC blew Sivere’s cover? Today we learn it was George Demos.
Kudos to the Project on Government Oversight (POGO) for investigating this case and kudos to Politics Daily for highlighting it today in writing, Long Island Congressional Candidate Cited for Giving up J.P. Morgan Whistleblower:
George Demos is a Republican Congressional candidate from Eastern Long Island whose Web site bears the slogan “Fighting for Freedom,” and touts his service as an enforcement lawyer in the New York office of the Securities and Exchange Commission. A bio says that he “handled some of the SEC’s most significant investigations,” including that of Ponzi scheme artist Bernard Madoff, and “worked tirelessly on the cases that never made the headlines.”
But one case that never made headlines was his own: Demos’ campaign Web site and public statements omit any reference to a report last March of the SEC’s Inspector General (IG), which found he had improperly disclosed protected, nonpublic information about a whistleblower to the counsel for that whistleblower’s employer, a major Wall Street bank, JPMorgan Chase. The IG’s charges of misconduct grew out of an SEC probe that began in 2003 of JPMorgan and other big financial institutions suspected of illegal market practices.
Demos has denied he did anything improper, and his campaign declined to comment on the matter. But documents obtained by the Project On Government Oversight (POGO) — a non-partisan non-profit based in Washington — confirm that Demos was the staff attorney who was cited in the IG report for violating SEC rules.
The IG referred the case to the agency’s management for possible disciplinary action, but the SEC took no action. Soon after that, Demos quietly resigned from his job and launched his bid for a seat in the House of Representatives. "
Source of George Demos - Peter Sivere Article
and Full Article Click Below
http://www.senseoncents.com/2010/01/sec-ig-report-george-demos-pimped-peter-sivere/
Posted Here by
Crystal L. Cox
Industry Whistleblower
Thursday, March 18, 2010
Matter of George G. Demos, Esq. - Departmental Disciplinary Committee
George G. Demos, Peter Sivere Whistleblower, Peter Sivere, First Judicial Department, Departmental Disciplinary Committee, Alan W. Friedberg,Second Judicial Department, Rita E. Adler, 10th Judicial District Grievance Committee...
Link to Document Click Here
Attorney Misconduct Review by State of New York Grievance Committee Tenth Judicial District - too Funny really.. from what I see there is no Accountability for New York Attorneys.
Read the Letters from Rita E. Adler to Peter Sivere Whistleblower
Click Here for More Documents on this Case.
Link to Document Click Here
Attorney Misconduct Review by State of New York Grievance Committee Tenth Judicial District - too Funny really.. from what I see there is no Accountability for New York Attorneys.
Read the Letters from Rita E. Adler to Peter Sivere Whistleblower
Click Here for More Documents on this Case.
"At SEC, the system can be deaf to Whistleblowing" - I say the SEC has Motives to NOT Listen as they Still are NOT Listening To Billion Dollar Tips.
" By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, January 21, 2010
Eric Kolchinsky was an executive at Moody's, the credit rating company, when he called a top official at the Securities and Exchange Commission in September to warn that his firm might be violating securities law. He reported that Moody's was blessing mortgage-backed investments that it knew were dangerous, according to a person familiar with the conversation.
The SEC official assured Kolchinsky that someone from the agency would call him back shortly. But the call never came, Kolchinsky later told congressional investigators who were examining how the credit rating industry's failures contributed to the financial crisis. He had gone to Congress after losing patience with the SEC.
Kolchinsky is one in a series of whistleblowers who in recent years tried to tip off the SEC to potential wrongdoing, only to be ignored, misunderstood or left to wonder whether they were being listened to. The SEC has no system in place to guide how officials should handle tips and complaints from outsiders, making it difficult for investigators to take advantage of an invaluable source of information.
This failure helped to continue two of the most celebrated frauds of the last decade for several years, potentially costing unwitting investors millions of dollars. Countless others may have been left vulnerable to shysters because of warnings that went unheeded.
Since SEC Chairman Mary L. Schapiro took office last year, she has said that fixing the holes in the process for handling tips and complaints has been a top priority. But improving the way hundreds of thousands of tips are analyzed and pursued has proven difficult.
The SEC's enforcement division got back in touch with Kolchinsky about his allegations only after he told the story publicly to a congressional committee last fall, according to a person familiar with the matter.
The SEC said it responded to Kolchinsky's concerns but declined to provide details or to say how fast it did so. Moody's said it examined his allegations and found nothing improper.
The SEC has a haphazard, decentralized system for analyzing outsider information.
Tips arrive by phone, mail and e-mail to officials throughout the agency -- investor education to enforcement divisions. A study commissioned by the SEC last year and conducted by Mitre, a nonprofit group that does research for the federal government, found that the SEC lacks technology to analyze tips and complaints, as well as cohesive policies for what officials should do when they get information.
Whistleblower complaints are one of the main ways that investigators should be tipped to wrongdoing, SEC officials say, along with inconsistencies in financial filings and alerts from financial exchanges about suspicious trading patterns. But the SEC lags behind some other federal agencies in handling tips.
The Internal Revenue Service, for instance, pays reward money to whistleblowers who provide credible information about tax fraud. The Federal Trade Commission has set up a call center for tips and complaints.
On top of structural problems at the SEC, agency officials individually made mistakes in handling several recent cases, sometimes violating agency rules.
Members of Schapiro's management team said they recognized problems with the system for handling whistleblowers shortly after taking over.
"There was no uniformity to it. Every division and office had its own system of recording, tracking or handling tips and complaints. That system was pretty rudimentary," said Steve Cohen, the official tasked by Schapiro to overhaul the agency's tips, complaints and whistleblower program. "We're already working to acquire and deploy technology that centralizes all of the agency's tips and complaints so they can be sorted, reviewed, analyzed and tracked."
No shortage of witnesses
The SEC's struggles were underlined over the past two years with the revelation of two huge Ponzi schemes.
In the case of Bernard L. Madoff, whistleblowers had provided credible information to various SEC units for years.
The most prominent of these informants, a Boston financial analyst named Harry Markopolos, contacted the enforcement division on numerous occasions, according to the SEC's inspector general.
In one instance, Markopolos provided a detailed explanation of why Madoff's business was probably a fraud. Enforcement officials listened, but they dismissed him in their internal discussions. Two former enforcement officials told the inspector general that they discounted Markopolos's information because he was not an insider in Madoff's company.
Then, a few months after the Madoff scheme exploded into the headlines, the SEC exposed a second large Ponzi scheme, run by R. Allen Stanford. But that happened five years after an insider went to the SEC, warning that Stanford might be conducting a fraudulent business.
Leyla Wydler had been a vice president at Stanford's Houston-based company when she first started asking her supervisors tough questions about what the firm did with clients' money, according to her testimony before Congress last year. Her superiors were evasive, and she ultimately was fired.
After that, she went to the National Association of Securities Dealers, a private industry regulator overseen by the SEC. The NASD dismissed her concerns. Then in September 2004, she contacted the SEC's Fort Worth office, according to her congressional testimony. She followed up with a letter to an official there, questioning whether clients' money had been invested in the way Stanford said.
She never heard from the SEC again -- until January 2009, days before the SEC finally filed a case against Stanford, according to her testimony. The agency wanted to know more about her allegations. An inspector general report from June 2009 said the SEC began looking into Stanford years earlier but struggled to build a case against him.
Turning in the Tipster
In one case, it was the SEC that blew the whistle on Peter Sivere, an informant.
Sivere worked in the compliance office of New York investment bank J.P. Morgan Chase. As part of a team helping the bank furnish documents related to a 2004 SEC probe into suspected illegal trading, he found an e-mail that he thought was incriminating.
According to a subsequent report by the SEC inspector general, the e-mail said J.P. Morgan was knowingly providing hundreds of millions of dollars in credit to a firm "in the business of day trading mutual funds" -- which is illegal.
Sivere asked his superiors if this e-mail had been turned over to the SEC but did not get an answer. Instead, he was taken off the SEC project, according to the inspector general report. Sivere accessed his superiors' e-mail accounts to retrieve relevant e-mails, then contacted the SEC. He told the agency that he had relevant documents and asked whether he could receive a reward. He was told he was not eligible, but he turned over the documents anyway.
Sivere informed J.P. Morgan that he had contacted the SEC.
The company fired him, partly on the grounds that he had "sought payment from the SEC to provide documents and information to them outside of the normal scope of their investigation," according to a letter company lawyers wrote defending his dismissal. J.P. Morgan declined to comment for this article.
Sivere was shocked to learn that J.P. Morgan knew he had inquired about a bounty. He had been promised that his discussions with the SEC were confidential.
An SEC internal probe found that an investigator working on the case disclosed Sivere's information to J.P. Morgan's lawyers, violating the agency's confidentiality rules. The inspector general recommended that the SEC official who made the disclosure be referred for disciplinary action. None was taken, according to agency documents.
Retraining the Watchdog
Cohen, who is overhauling the SEC's whistleblower practices, said a database, jury-rigged from existing technology, will be in place this month to centralize all tips and complaints. Officials said that by the end of 2010, they hope to develop technology that would not only centralize the data but also automatically analyze them for patterns to help officials prioritize cases.
Currently, the SEC is setting procedures for responding to whistleblowers and is creating an office of market intelligence to coordinate how the agency's various units respond to tips.
The agency also wants to be able to reward whistleblowers, which it can only do now for insider-trading cases. The SEC has requested that Congress pass legislation giving it the ability to offer financial rewards to people who provide evidence of violations of securities law. ""
Source of Article
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/20/AR2010012005125_2.html
The SEC Gets Tips that Will inevitable Cost Shareholder Millions and they HAVE No System in place to really handle these tips, yet they act like they are taking in Tips and Handling them. The Iviewit Technologies Case will one day explode into Billions in Loss and the SEC has ignored the Eliot Bernstein SEC Complaint - and has know of the Involvement of Proskauer Rose way before the Standford Billions were lost. More on the Iviewit Stolen Patent and what Companies are affected go to http://www.deniedpatent.com/ and www.Iviewit.TV
Why is there no Accountability for the SEC Insiders that let these Billion Dollar Scams Happen then after the Scam and many innocent investors lose everything, the SEC insider gets a a Really Good Job at a high profile law firm. And no one seems to raise an eyebrow.
All these Billion Dollar Investment schemes seem to have the same thing in common. They have a Mega Law Firm behind them helping them, and the Law firms such as Proskauer Rose seem to have No Accountability for the Damage they due to investors.
In the Stanford investment Scandal SEC Sjoblom went to Proskauer Rose - talk about a conflict of Interest - Proskauer Rose seems to be behind a whole lot of these Billion Dollar Scams and they never seem to be held accountable.
In the Dreier Scandal there was Proskauer Rose LLP Attorney Sheila Gowan.
In the Madoff Scandal and there is said to a woman who fled the SEC to the Law Firm Proskauer Rose and that she is fingered all over the SEC report on Madoff failures.
So the SEC seems to hire these lawyers and let them run these scams and there seems to be no REAL regulators of any kind for the ones in place seem to be part of the organized RICO Enterprise of Criminal Lawyers and Law Firms and the US court System does not seem to be able to do anything about them.
Is the SEC Liable for Billions to Trillions of Investors money when it is Obviously, Easily proved that the SEC Ignored TIPS for Years upon Years in all these cases. Time to Sue the SEC. This Government Agent should not be above the law, it is as if they let this stuff go on - on Purpose for pay offs and cushy jobs... and year after year the same scheme plays out and no one seems to be able to bring Justice, Accountability, or Real Action from the SEC to do what the Duty of the SEC is....
Links
Sheila M. Gowan - Proskauer Rose - Iviewit
http://www.free-press-release.com/news-iviewit-trillion-fed-suit-defendant-proskauer-rose-sued-in-global-class-action-re-stanford-ponzi-1252249099.html
Standford - Proskauer Rose - Thomas Sjoblom
http://www.proskauersucks.com/2010/01/thomas-v-sjoblom-allen-stanford.html
Madoff - Proskauer Rose
http://www.proskauerrosesucks.com/2010/02/proskauer-rose-madoff-mary-shapiro-sec.html
Washington Post Staff Writer
Thursday, January 21, 2010
Eric Kolchinsky was an executive at Moody's, the credit rating company, when he called a top official at the Securities and Exchange Commission in September to warn that his firm might be violating securities law. He reported that Moody's was blessing mortgage-backed investments that it knew were dangerous, according to a person familiar with the conversation.
The SEC official assured Kolchinsky that someone from the agency would call him back shortly. But the call never came, Kolchinsky later told congressional investigators who were examining how the credit rating industry's failures contributed to the financial crisis. He had gone to Congress after losing patience with the SEC.
Kolchinsky is one in a series of whistleblowers who in recent years tried to tip off the SEC to potential wrongdoing, only to be ignored, misunderstood or left to wonder whether they were being listened to. The SEC has no system in place to guide how officials should handle tips and complaints from outsiders, making it difficult for investigators to take advantage of an invaluable source of information.
This failure helped to continue two of the most celebrated frauds of the last decade for several years, potentially costing unwitting investors millions of dollars. Countless others may have been left vulnerable to shysters because of warnings that went unheeded.
Since SEC Chairman Mary L. Schapiro took office last year, she has said that fixing the holes in the process for handling tips and complaints has been a top priority. But improving the way hundreds of thousands of tips are analyzed and pursued has proven difficult.
The SEC's enforcement division got back in touch with Kolchinsky about his allegations only after he told the story publicly to a congressional committee last fall, according to a person familiar with the matter.
The SEC said it responded to Kolchinsky's concerns but declined to provide details or to say how fast it did so. Moody's said it examined his allegations and found nothing improper.
The SEC has a haphazard, decentralized system for analyzing outsider information.
Tips arrive by phone, mail and e-mail to officials throughout the agency -- investor education to enforcement divisions. A study commissioned by the SEC last year and conducted by Mitre, a nonprofit group that does research for the federal government, found that the SEC lacks technology to analyze tips and complaints, as well as cohesive policies for what officials should do when they get information.
Whistleblower complaints are one of the main ways that investigators should be tipped to wrongdoing, SEC officials say, along with inconsistencies in financial filings and alerts from financial exchanges about suspicious trading patterns. But the SEC lags behind some other federal agencies in handling tips.
The Internal Revenue Service, for instance, pays reward money to whistleblowers who provide credible information about tax fraud. The Federal Trade Commission has set up a call center for tips and complaints.
On top of structural problems at the SEC, agency officials individually made mistakes in handling several recent cases, sometimes violating agency rules.
Members of Schapiro's management team said they recognized problems with the system for handling whistleblowers shortly after taking over.
"There was no uniformity to it. Every division and office had its own system of recording, tracking or handling tips and complaints. That system was pretty rudimentary," said Steve Cohen, the official tasked by Schapiro to overhaul the agency's tips, complaints and whistleblower program. "We're already working to acquire and deploy technology that centralizes all of the agency's tips and complaints so they can be sorted, reviewed, analyzed and tracked."
No shortage of witnesses
The SEC's struggles were underlined over the past two years with the revelation of two huge Ponzi schemes.
In the case of Bernard L. Madoff, whistleblowers had provided credible information to various SEC units for years.
The most prominent of these informants, a Boston financial analyst named Harry Markopolos, contacted the enforcement division on numerous occasions, according to the SEC's inspector general.
In one instance, Markopolos provided a detailed explanation of why Madoff's business was probably a fraud. Enforcement officials listened, but they dismissed him in their internal discussions. Two former enforcement officials told the inspector general that they discounted Markopolos's information because he was not an insider in Madoff's company.
Then, a few months after the Madoff scheme exploded into the headlines, the SEC exposed a second large Ponzi scheme, run by R. Allen Stanford. But that happened five years after an insider went to the SEC, warning that Stanford might be conducting a fraudulent business.
Leyla Wydler had been a vice president at Stanford's Houston-based company when she first started asking her supervisors tough questions about what the firm did with clients' money, according to her testimony before Congress last year. Her superiors were evasive, and she ultimately was fired.
After that, she went to the National Association of Securities Dealers, a private industry regulator overseen by the SEC. The NASD dismissed her concerns. Then in September 2004, she contacted the SEC's Fort Worth office, according to her congressional testimony. She followed up with a letter to an official there, questioning whether clients' money had been invested in the way Stanford said.
She never heard from the SEC again -- until January 2009, days before the SEC finally filed a case against Stanford, according to her testimony. The agency wanted to know more about her allegations. An inspector general report from June 2009 said the SEC began looking into Stanford years earlier but struggled to build a case against him.
Turning in the Tipster
In one case, it was the SEC that blew the whistle on Peter Sivere, an informant.
Sivere worked in the compliance office of New York investment bank J.P. Morgan Chase. As part of a team helping the bank furnish documents related to a 2004 SEC probe into suspected illegal trading, he found an e-mail that he thought was incriminating.
According to a subsequent report by the SEC inspector general, the e-mail said J.P. Morgan was knowingly providing hundreds of millions of dollars in credit to a firm "in the business of day trading mutual funds" -- which is illegal.
Sivere asked his superiors if this e-mail had been turned over to the SEC but did not get an answer. Instead, he was taken off the SEC project, according to the inspector general report. Sivere accessed his superiors' e-mail accounts to retrieve relevant e-mails, then contacted the SEC. He told the agency that he had relevant documents and asked whether he could receive a reward. He was told he was not eligible, but he turned over the documents anyway.
Sivere informed J.P. Morgan that he had contacted the SEC.
The company fired him, partly on the grounds that he had "sought payment from the SEC to provide documents and information to them outside of the normal scope of their investigation," according to a letter company lawyers wrote defending his dismissal. J.P. Morgan declined to comment for this article.
Sivere was shocked to learn that J.P. Morgan knew he had inquired about a bounty. He had been promised that his discussions with the SEC were confidential.
An SEC internal probe found that an investigator working on the case disclosed Sivere's information to J.P. Morgan's lawyers, violating the agency's confidentiality rules. The inspector general recommended that the SEC official who made the disclosure be referred for disciplinary action. None was taken, according to agency documents.
Retraining the Watchdog
Cohen, who is overhauling the SEC's whistleblower practices, said a database, jury-rigged from existing technology, will be in place this month to centralize all tips and complaints. Officials said that by the end of 2010, they hope to develop technology that would not only centralize the data but also automatically analyze them for patterns to help officials prioritize cases.
Currently, the SEC is setting procedures for responding to whistleblowers and is creating an office of market intelligence to coordinate how the agency's various units respond to tips.
The agency also wants to be able to reward whistleblowers, which it can only do now for insider-trading cases. The SEC has requested that Congress pass legislation giving it the ability to offer financial rewards to people who provide evidence of violations of securities law. ""
Source of Article
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/20/AR2010012005125_2.html
The SEC Gets Tips that Will inevitable Cost Shareholder Millions and they HAVE No System in place to really handle these tips, yet they act like they are taking in Tips and Handling them. The Iviewit Technologies Case will one day explode into Billions in Loss and the SEC has ignored the Eliot Bernstein SEC Complaint - and has know of the Involvement of Proskauer Rose way before the Standford Billions were lost. More on the Iviewit Stolen Patent and what Companies are affected go to http://www.deniedpatent.com/ and www.Iviewit.TV
Why is there no Accountability for the SEC Insiders that let these Billion Dollar Scams Happen then after the Scam and many innocent investors lose everything, the SEC insider gets a a Really Good Job at a high profile law firm. And no one seems to raise an eyebrow.
All these Billion Dollar Investment schemes seem to have the same thing in common. They have a Mega Law Firm behind them helping them, and the Law firms such as Proskauer Rose seem to have No Accountability for the Damage they due to investors.
In the Stanford investment Scandal SEC Sjoblom went to Proskauer Rose - talk about a conflict of Interest - Proskauer Rose seems to be behind a whole lot of these Billion Dollar Scams and they never seem to be held accountable.
In the Dreier Scandal there was Proskauer Rose LLP Attorney Sheila Gowan.
In the Madoff Scandal and there is said to a woman who fled the SEC to the Law Firm Proskauer Rose and that she is fingered all over the SEC report on Madoff failures.
So the SEC seems to hire these lawyers and let them run these scams and there seems to be no REAL regulators of any kind for the ones in place seem to be part of the organized RICO Enterprise of Criminal Lawyers and Law Firms and the US court System does not seem to be able to do anything about them.
Is the SEC Liable for Billions to Trillions of Investors money when it is Obviously, Easily proved that the SEC Ignored TIPS for Years upon Years in all these cases. Time to Sue the SEC. This Government Agent should not be above the law, it is as if they let this stuff go on - on Purpose for pay offs and cushy jobs... and year after year the same scheme plays out and no one seems to be able to bring Justice, Accountability, or Real Action from the SEC to do what the Duty of the SEC is....
Links
Sheila M. Gowan - Proskauer Rose - Iviewit
http://www.free-press-release.com/news-iviewit-trillion-fed-suit-defendant-proskauer-rose-sued-in-global-class-action-re-stanford-ponzi-1252249099.html
Standford - Proskauer Rose - Thomas Sjoblom
http://www.proskauersucks.com/2010/01/thomas-v-sjoblom-allen-stanford.html
Madoff - Proskauer Rose
http://www.proskauerrosesucks.com/2010/02/proskauer-rose-madoff-mary-shapiro-sec.html
Tuesday, March 16, 2010
Peter Z. Sivere v. JP Morgan Chase - Department of Labor - OSHA - SEC - Canary Capital - Davis Polk - JPM Chase
August 2005 Archives
Inside the JP Morgan, Peter Sivere Whistleblower Case
"Civil Action to Protect Against Retaliation in Fraud Cases"
Lisa M. Wells - JPM Chase
Sarbanes - Oxley
Jamie Dimon
Davis Polk Investigations
When Loans were made and What We did about it...
JP Morgan provided a $150 Milloin Line of Credit to a Canary Entity Structured for Canary a series of short equity basket swaps that allowed Canary to hedge its long position in third party mutual funds.
Plaintiffs allege that JPM has liability as financier of some Canary Market timeing and late trading. ... Davis Polk seems to have claimed, in their investigation that JPM had no knowledge of late trading or improper timing...
Heritage Bank One ..
What are the Conflicts of Interest, Attorneys Protecting Each Other.. Isn't Davis Polk connected to Proskauer Rose Somehow??
Canary Capital Litigation
Investment Banking Exposure
TS&S / Investment Management Exposure
Click Here for Full Document
Inside the JP Morgan, Peter Sivere Whistleblower Case
"Civil Action to Protect Against Retaliation in Fraud Cases"
Lisa M. Wells - JPM Chase
Sarbanes - Oxley
Jamie Dimon
Davis Polk Investigations
When Loans were made and What We did about it...
JP Morgan provided a $150 Milloin Line of Credit to a Canary Entity Structured for Canary a series of short equity basket swaps that allowed Canary to hedge its long position in third party mutual funds.
Plaintiffs allege that JPM has liability as financier of some Canary Market timeing and late trading. ... Davis Polk seems to have claimed, in their investigation that JPM had no knowledge of late trading or improper timing...
Heritage Bank One ..
What are the Conflicts of Interest, Attorneys Protecting Each Other.. Isn't Davis Polk connected to Proskauer Rose Somehow??
Canary Capital Litigation
Investment Banking Exposure
TS&S / Investment Management Exposure
Click Here for Full Document
J. Huntley Palmer Lead In House Attorney JP Morgan - Whistleblower Peter Sivere
J. Huntley Palmer was the lead in house attorney at JPM, JP Morgan when J. Huntley Palmer removed 8 people from Whistleblower Peter Sivere's team and replaced them with Davis Polk Team. Looks like he is on the short list for US Attorney in Philadelphia. Sources say his name was one of several submitted to the White House for consideration.
"" Posted on Thu, Jan. 7, 2010
Specter blamed for delay in Obama's naming U.S. att'y
By MICHAEL HINKELMAN
Philadelphia Daily News
hinkelm@phillynews.com
215-854-2656
By this date eight years ago, the then-new U.S. attorney in Philadelphia, Patrick Meehan, had been on the job almost four months, after being confirmed by the U.S. Senate in September 2001.
Now, almost a year into President Obama's term, there is not even a nominee for the post. And the appointment of a new U.S. attorney, which is considered a plum assignment, is not believed to be imminent, sources familiar with the process say.
Some blame the ambling pace on unusual political circumstances.
Traditionally, the state's senior senator of the president's party, in this case Sen. Bob Casey, makes a recommendation to the White House. However, when longtime Republican Sen. Arlen Specter switched parties last April and became a Democrat, that complicated the selection process, sources said.
Sources said that Casey and Specter could not agree on a single candidate to recommend to Obama, who makes the formal nomination.
An initial screening process last summer produced a list of 20 names for U.S. attorney here.
With Casey and Specter unable to settle on one, several names were jointly submitted to the White House last month, sources said.
A source with knowledge of the matter declined to say how many names were submitted or to identify them.
Among those thought to be on a short list, sources said, are Cheryl A. Krause, a partner at Dechert LLP; James J. Eisenhower, a partner at Schnader Harrison Segal and Lewis LLP; and J. Huntley Palmer of JP Morgan Chase & Co. All were once federal prosecutors here.
Krause, Eisenhower and Palmer declined to comment for this story.
Justice Department spokeswoman Melissa Schwartz would neither confirm nor deny whether the Justice Department had received any names from the White House or begun vetting any candidates.
Larry Smar, a spokesman for Casey, said, "As of right now, I don't have a sense of when a nomination will be made."
A spokeswoman for Specter declined to comment.
The U.S. attorney here - one of 93 in the country - brings criminal and civil actions on behalf of the federal government in the nine-county area of southeastern Pennsylvania.
The office has prosecuted a number of high-profile public-corruption cases in recent years, including that of former state Sen. Vince Fumo and former City Councilman Rick Mariano.
Former U.S. Attorney Meehan resigned his post in July 2008. The current U.S. attorney, Michael L. Levy, was named by the Justice Department on an interim basis last May to serve as U.S. attorney until Obama nominated a successor.
When the White House receives a senatorial recommendation, it is sent to the Justice Department for vetting.
Schwartz said the vetting process - which includes background checks and interviews by political and career officials - can typically take up to three months.
Once a finalist is determined, that person is interviewed by Attorney General Eric Holder, who makes a recommendation to Obama.
After Obama makes the formal nomination, it is sent to the Senate for confirmation.
And there's no certainty that a nominee - given the current partisan rancor in the Senate - will win timely confirmation.
Case in point: New Jersey's new U.S. attorney, Paul Fishman, was recommended to Obama last February and was nominated by the White House in May, but not confirmed by the Senate until Oct. 7.
According to the Web site Main Justice, an independent news organization that covers the Justice Department, 31 new U.S. attorneys have been confirmed by the Senate, 12 more have been nominated by Obama and another 23 names have been recommended by senators to Obama for U.S. attorney posts throughout the country.
None of those confirmed or nominated to date are holdovers from the Bush administration, although two Bush holdovers have been recommended to Oba-ma. ""
Source
http://www.philly.com/philly/hp/news_update/80882337.html?cmpid=15585797
"" Posted on Thu, Jan. 7, 2010
Specter blamed for delay in Obama's naming U.S. att'y
By MICHAEL HINKELMAN
Philadelphia Daily News
hinkelm@phillynews.com
215-854-2656
By this date eight years ago, the then-new U.S. attorney in Philadelphia, Patrick Meehan, had been on the job almost four months, after being confirmed by the U.S. Senate in September 2001.
Now, almost a year into President Obama's term, there is not even a nominee for the post. And the appointment of a new U.S. attorney, which is considered a plum assignment, is not believed to be imminent, sources familiar with the process say.
Some blame the ambling pace on unusual political circumstances.
Traditionally, the state's senior senator of the president's party, in this case Sen. Bob Casey, makes a recommendation to the White House. However, when longtime Republican Sen. Arlen Specter switched parties last April and became a Democrat, that complicated the selection process, sources said.
Sources said that Casey and Specter could not agree on a single candidate to recommend to Obama, who makes the formal nomination.
An initial screening process last summer produced a list of 20 names for U.S. attorney here.
With Casey and Specter unable to settle on one, several names were jointly submitted to the White House last month, sources said.
A source with knowledge of the matter declined to say how many names were submitted or to identify them.
Among those thought to be on a short list, sources said, are Cheryl A. Krause, a partner at Dechert LLP; James J. Eisenhower, a partner at Schnader Harrison Segal and Lewis LLP; and J. Huntley Palmer of JP Morgan Chase & Co. All were once federal prosecutors here.
Krause, Eisenhower and Palmer declined to comment for this story.
Justice Department spokeswoman Melissa Schwartz would neither confirm nor deny whether the Justice Department had received any names from the White House or begun vetting any candidates.
Larry Smar, a spokesman for Casey, said, "As of right now, I don't have a sense of when a nomination will be made."
A spokeswoman for Specter declined to comment.
The U.S. attorney here - one of 93 in the country - brings criminal and civil actions on behalf of the federal government in the nine-county area of southeastern Pennsylvania.
The office has prosecuted a number of high-profile public-corruption cases in recent years, including that of former state Sen. Vince Fumo and former City Councilman Rick Mariano.
Former U.S. Attorney Meehan resigned his post in July 2008. The current U.S. attorney, Michael L. Levy, was named by the Justice Department on an interim basis last May to serve as U.S. attorney until Obama nominated a successor.
When the White House receives a senatorial recommendation, it is sent to the Justice Department for vetting.
Schwartz said the vetting process - which includes background checks and interviews by political and career officials - can typically take up to three months.
Once a finalist is determined, that person is interviewed by Attorney General Eric Holder, who makes a recommendation to Obama.
After Obama makes the formal nomination, it is sent to the Senate for confirmation.
And there's no certainty that a nominee - given the current partisan rancor in the Senate - will win timely confirmation.
Case in point: New Jersey's new U.S. attorney, Paul Fishman, was recommended to Obama last February and was nominated by the White House in May, but not confirmed by the Senate until Oct. 7.
According to the Web site Main Justice, an independent news organization that covers the Justice Department, 31 new U.S. attorneys have been confirmed by the Senate, 12 more have been nominated by Obama and another 23 names have been recommended by senators to Obama for U.S. attorney posts throughout the country.
None of those confirmed or nominated to date are holdovers from the Bush administration, although two Bush holdovers have been recommended to Oba-ma. ""
Source
http://www.philly.com/philly/hp/news_update/80882337.html?cmpid=15585797
Sunday, March 14, 2010
Howard L. Shapiro - Counsel to the Inspector General. Dan Petrole - Peter Sivere Whistleblower Smackdown
SEC Investigators - OSHA Investigators - SEC OIG Report of Investigation - Industry Whistleblower - SEC Fraud and Failing the Public.
Howard L. Shapiro - Counsel to the Inspector General
Deputy Inspector General, Dan Petrole
Below is What Seems to Me Like a Whistleblower Smackdown, as the SEC Fails Over and Over to Protect Whistleblower, Consumers, Shareholders and Faild to Investigate Fraud. Is there No Accountability, Transparency or Rights on any Level?
***********
In a message dated 2/17/2010 7:55:05 A.M. Eastern Standard Time, shapiro.howard@oig.dol.gov writes:
Mr. Sivere:
The Deputy Inspector General, Dan Petrole, has asked me to respond to your recent e-mail to him, in which you state:
In light of the new public interest in this matter I would like for you to re-open this investigation. Please see the attached documentation from Mr. Heddell (signed by you on his behalf) and his reasoning for not re-opening this investigation.
Specifically, Mr. Heddell stated "our review of the SEC OIG Report of Investigation does not provide sufficient basis to revisit this determination."
Why didn't OSHA ever produce a final determination in this investigation? Did OSHA ever interview George Demos or speak directly with the SEC in regard to his allegations of me?
Upon review of the linked web pages (in your e-mail), it appears that the new public interest in this matter primarily relates to actions taken (or not taken) within the SEC, and does not provide a sufficient basis or justification for the DOL OIG to re-visit its previous determination regarding the opening of an investigation with respect to actions taken by OSHA employees.
Howard L. Shapiro
Counsel to the Inspector General "
************
From: PSivere@aol.com [mailto:PSivere@aol.com]
Sent: Thursday, March 04, 2010 6:10 AM
To: Shapiro, Howard - OIG
Cc: Petrole, Daniel - OIG
Subject: Re: Request to OIG
Dear Mr. Shapiro,
Nothing in the attached Memorandum of Understating between the SEC and DOL, entered into July 29, 2008 contain any restrictions on the DOL.
Has Mr. Petrole made any attempt to discuss this matter with the SEC OIG as outlined in the MOU? The fact that my confidential information was leaked during an OSHA investigation and the DOL OIG has no interest in investigating why OSHA investigators did not or will not investigate the leak is troubling.
At a minimum the OSHA investigators should have contacted the SEC investigators to compare "facts." The SEC OIG was concerned enough to investigate their own, why won't the DOL OIG do the same? What is the downside for DOL to produce a similar report as the SEC OIG did?
Thank You,
Peter ""
Howard L. Shapiro - Counsel to the Inspector General
Deputy Inspector General, Dan Petrole
Below is What Seems to Me Like a Whistleblower Smackdown, as the SEC Fails Over and Over to Protect Whistleblower, Consumers, Shareholders and Faild to Investigate Fraud. Is there No Accountability, Transparency or Rights on any Level?
***********
In a message dated 2/17/2010 7:55:05 A.M. Eastern Standard Time, shapiro.howard@oig.dol.gov writes:
Mr. Sivere:
The Deputy Inspector General, Dan Petrole, has asked me to respond to your recent e-mail to him, in which you state:
In light of the new public interest in this matter I would like for you to re-open this investigation. Please see the attached documentation from Mr. Heddell (signed by you on his behalf) and his reasoning for not re-opening this investigation.
Specifically, Mr. Heddell stated "our review of the SEC OIG Report of Investigation does not provide sufficient basis to revisit this determination."
Why didn't OSHA ever produce a final determination in this investigation? Did OSHA ever interview George Demos or speak directly with the SEC in regard to his allegations of me?
Upon review of the linked web pages (in your e-mail), it appears that the new public interest in this matter primarily relates to actions taken (or not taken) within the SEC, and does not provide a sufficient basis or justification for the DOL OIG to re-visit its previous determination regarding the opening of an investigation with respect to actions taken by OSHA employees.
Howard L. Shapiro
Counsel to the Inspector General "
************
From: PSivere@aol.com [mailto:PSivere@aol.com]
Sent: Thursday, March 04, 2010 6:10 AM
To: Shapiro, Howard - OIG
Cc: Petrole, Daniel - OIG
Subject: Re: Request to OIG
Dear Mr. Shapiro,
Nothing in the attached Memorandum of Understating between the SEC and DOL, entered into July 29, 2008 contain any restrictions on the DOL.
Has Mr. Petrole made any attempt to discuss this matter with the SEC OIG as outlined in the MOU? The fact that my confidential information was leaked during an OSHA investigation and the DOL OIG has no interest in investigating why OSHA investigators did not or will not investigate the leak is troubling.
At a minimum the OSHA investigators should have contacted the SEC investigators to compare "facts." The SEC OIG was concerned enough to investigate their own, why won't the DOL OIG do the same? What is the downside for DOL to produce a similar report as the SEC OIG did?
Thank You,
Peter ""
************
Message from Dan Petrole to Howard L. Shapiro
"In a message dated 3/4/2010 3:16:53 P.M. Eastern Standard Time,
Petrole.Daniel@oig.dol.gov writes:
Howard,
I assume that you are monitoring these e-mails. I also realize that Mr. Sivere agreed to a settlement regarding his issue. Just want to make sure you are comfortable that nothing comes back to bite us.
Dan"
************
"From: PSivere@aol.comTo: Petrole.Daniel@oig.dol.govCC: shapiro.howard@oig.dol.govSent: 3/11/2010 5:41:03 A.M. Eastern Standard TimeSubj: Re: Request to OIG
Mr. Petrole,
Leaving the settlement aside for a moment. Congress charges your agency with protecting the workers of this country. Specifically, it charges you to ensure that certain programs are administered and carried out without interference or political agendas.
Sadly, your comment below illustrates why the American people are fed up. You are in Washington to serve the people of this country. It's a sad state of affairs when the agency charged with protecting the workers of this country believe we are better protected when civil servants, like yourself, put politics before your actual mandate.
This is not a legal issue. This is a systematic breakdown of your agency and all you focus on is CYA. I purposely let your e-mail sit in my in box for the past week with the hopes of establishing some dialogue with you and your agency. Sadly, it did not happen.
Thank You,
Peter Sivere "
Message from Dan Petrole to Howard L. Shapiro
"In a message dated 3/4/2010 3:16:53 P.M. Eastern Standard Time,
Petrole.Daniel@oig.dol.gov writes:
Howard,
I assume that you are monitoring these e-mails. I also realize that Mr. Sivere agreed to a settlement regarding his issue. Just want to make sure you are comfortable that nothing comes back to bite us.
Dan"
************
"From: PSivere@aol.comTo: Petrole.Daniel@oig.dol.govCC: shapiro.howard@oig.dol.govSent: 3/11/2010 5:41:03 A.M. Eastern Standard TimeSubj: Re: Request to OIG
Mr. Petrole,
Leaving the settlement aside for a moment. Congress charges your agency with protecting the workers of this country. Specifically, it charges you to ensure that certain programs are administered and carried out without interference or political agendas.
Sadly, your comment below illustrates why the American people are fed up. You are in Washington to serve the people of this country. It's a sad state of affairs when the agency charged with protecting the workers of this country believe we are better protected when civil servants, like yourself, put politics before your actual mandate.
This is not a legal issue. This is a systematic breakdown of your agency and all you focus on is CYA. I purposely let your e-mail sit in my in box for the past week with the hopes of establishing some dialogue with you and your agency. Sadly, it did not happen.
Thank You,
Peter Sivere "
Posted here by
Investigative Blogger
Investigative Blogger
Thursday, March 11, 2010
Long Island Congressional Candidate Cited for Giving Up JPMorgan Whistleblower
""George Demos is a Republican Congressional Candidate from Eastern Long Island whose Web site bears the slogan "Fighting for Freedom," and touts his service as an enforcement lawyer in the New York office of the Securities and Exchange Commission. A bio says that he "handled some of the SEC's most significant investigations," including that of Ponzi scheme artist Bernard Madoff, and "worked tirelessly on the cases that never made the headlines."
But one case that never made headlines was his own: Demos' campaign Web site and public statements omit any reference to a report last March of the SEC's Inspector General (IG), which found he had improperly disclosed protected, nonpublic information about a whistleblower to the counsel for that whistleblower's employer, a major Wall Street bank, JP Morgan Chase.
The IG's charges of misconduct grew out of an SEC probe that began in 2003 of JPMorgan and other big financial institutions suspected of illegal market practices.
Demos has denied he did anything improper, and his campaign declined to comment on the matter. But documents obtained by the Project On Government Oversight (POGO) -- a non-partisan non-profit based in Washington -- confirm that Demos was the staff attorney who was cited in the IG report for violating SEC rules.
The IG referred the case to the agency's management for possible disciplinary action, but the SEC took no action. Soon after that, Demos quietly resigned from his job and launched his bid for a seat in the House of Representatives.
But the confidential information that Demos disclosed was used by a JPMorgan lawyer against one of the bank's own employees, a whistleblower who had alerted the SEC to possible wrongdoing by his employer, according to the report and other documents, some released under the Freedom of Information Act.
The significance of the case goes beyond politics.
In response to widespread public anger over Wall Street abuses and a weak economy, the SEC and its latest chairman, Mary Schapiro, have pledged repeatedly to protect whistleblowers and pay more attention to their reports of illegality and market abuse.
The Madoff case itself involved a whistleblower whose information the SEC had largely ignored, and a financial analyst at a prominent Wall Street company said last year that he, too, had trouble getting phone calls returned by the SEC after informing the agency his employer might be breaking the law. In response, the SEC has launched a program to cope with the hundreds of thousands of tips it receives every year, but progress has been painfully slow.
Meanwhile, the SEC also appears to be brushing aside or delaying action on the recommendations of its own IG, and not just in the Demos matter. In response to a recent Freedom of Information Act request submitted by POGO, the SEC has said that since 2007 there have been more than 200 recommendations from its IG on which the agency has either taken no action, or on which action was still pending.
Demos is a 33-year-old politically wired attorney who attended Fordham Law School. According to his campaign Web site, his donor list includes wealthy Wall Streeters and others, who have given him more than $300,000 since October.
His bio includes stints in the District Attorney's office in Suffolk County, Long Island, and service as enforcement lawyer at the SEC from 2002 to 2009.
He was involved in the campaigns of former New York Gov. George Pataki and former Sen. Alfonse D'Amato, and is now in a field of candidates, including Chris Cox, an attorney and the grandson of former President Richard Nixon, who are seeking the GOP nomination in New York's 1st Congressional District, a swing district. The seat is currently held by Tim Bishop, a Democrat, who is considered vulnerable in November.
The SEC IG's findings did not identify Demos by name when they were included in the watchdog's semi-annual report to Congress last year. But documents obtained by POGO, including internal SEC materials and related correspondence, make clear that Demos' conduct lay behind the section of the report on the JPMorgan whistleblower, who worked as a mid-level compliance officer in New York.
According to a redacted version of the report, the whistleblower, whose name is Peter Sivere, first came to the SEC with what he described as "confidential" evidence of the bank's alleged failure to disclose material sought in the SEC probe.
The SEC was investigating a practice known as market timing, which can be illegal. It typically involves trading that favors short-term buyers and sellers to the detriment of long-term shareholders like retirees.
After the whistleblower's initial e-mail contact with the SEC in June 2004, Demos replied to him, confirming, among other things, that the agency's probe was "confidential."
Several major institutions, such as Bank of America and Alliance Capital Management, later reached settlements in similar SEC inquiries, but JPMorgan was never charged with a violation, and this week had no comment.
In July 2004, Sivere brought an employment claim against JPMorgan before the Occupational Safety and Health Administration. He contended that the bank began threatening his job after he had gone to the SEC. JPMorgan strongly disputed Sivere's allegations.
OSHA issued a preliminary finding in favor of the whistleblower, saying there was "reasonable cause to believe" that he had faced retaliation, and that his "preliminary reinstatement" was warranted. Not long after, Demos informed JPMorgan's counsel that Sivere had initially sought a cash payment from the SEC for information he was offering the agency, apparently in hopes of benefiting from a well-publicized SEC program to elicit information from tipsters.
The lawyer for JPMorgan then used Sivere's confidential request for a bounty to question his whistleblower credentials, and informed OHSA that he had asked for money. Apparently concerned that this had damaged his case, despite the initial finding in his favor, Sivere then dropped his complaint against JPMorgan and settled the case.
A well-known Washington securities lawyer who did not want his name used in a discussion of the sensitive case explained that "whistleblowers are often unfairly disparaged for requesting payments, even though U.S. law specifically authorizes rewards to certain informants." JPMorgan has denied any impropriety. It ultimately fired Sivere in October 2004.
In October 2008, the SEC's IG launched its own investigation in response to information from Sivere. Its final report provided a description of what it said was Demos' improper disclosure, as well as an earlier, internal SEC examination of the matter.
Demos, when first questioned by an SEC supervisor, "did not admit" to the improper disclosure, the IG report says, though he did concede he might have been responsible, saying he "did not remember."
Based on that inconclusive evidence, Demos' SEC superior drew no definite conclusion about whether Demos had made the disclosure. Even so, he formally "counseled" Demos in late 2005 about the importance of keeping protected information within the agency, the IG said.
The IG later interviewed Demos' SEC superior and others at the agency. The IG also contacted lawyers for JPMorgan, including one to whom the disclosure had been made. That lawyer readily identified Demos as the source of his information, according to documents.
As the IG report concludes, Demos "not only gave . . . JPMorgan permission to use the non-public information about an informant against him [in the OHSA proceeding], but actually encouraged such use."
The IG found that Demos' disclosure was a violation of SEC rules, which severely restrict the release of confidential information obtained in the course of an investigation.
The failure of Demos' campaign to let prospective voters know about any of these events may not be surprising, but only days after he launched his run for Congress on Oct. 13, 2009, candidate Demos sent a two-page letter rebutting charges of ethical misconduct in the SEC matter that had surfaced in another forum: the Departmental Disciplinary Committee of the New York State Supreme Court Appellate Division, which reviews and investigates ethical complaints against lawyers.
Upset that the SEC was doing nothing in response to its own IG's disciplinary referral, the New York ethics complaint naming Demos was filed by Sivere, the fired whistleblower. Demos' letter in response to that complaint argued that it was "entirely without merit."
The complaint has yet to be resolved, but could result in a finding of no wrongdoing or penalties ranging from censure to disbarment.
In his letter to the Supreme Court's Disciplinary Committee, Demos concedes that information about the whistleblower may have been released, but only in line with SEC "regulations and policies." Demos' statement appears to be at odds with the IG's finding.
His letter also attacks the protected status of the whistleblower's information, arguing that the one time JPMorgan employee "was owed no duty of confidentiality or loyalty by the Commission [SEC] or me" -- another statement that contradicts the IG's conclusions.
Michael Smallberg is an investigator at the Project On Government Oversight (POGO). Adam Zagorin is Journalist in Residence at POGO. POGO is a non-partisan, non-profit government watchdog group based in Washington, D.C.""
Source
http://www.politicsdaily.com/2010/01/28/long-island-congressional-candidate-cited-for-giving-up-jpmorgan/
I do not believe that the SEC even Tries to Check on Reports or Tips... I believe that the SEC, Mary Schapiro looks at who the "Names" and "Players" are and decides from there whether to look into it or not.. the Iviewit Trillion Dollar Stolen Patent Case Shows this VERY Well... as the SEC, Mary Schapiro knows full well of a Massive Shareholder Fraud and they DO NOTHING.. they don't even seem to acknowledge it has been reported...
more on the iViewit Stolen Patent at
www.Iviewit.TV and www.DeniedPatent.com
and More on Mary Schapiro Click Here
the Obama Administration Brags about new laws to protect Whistleblowers... Laws seem to be in place but in the Real World Whistleblowers are Treated as Criminals and their Lives are turned upside down...
But one case that never made headlines was his own: Demos' campaign Web site and public statements omit any reference to a report last March of the SEC's Inspector General (IG), which found he had improperly disclosed protected, nonpublic information about a whistleblower to the counsel for that whistleblower's employer, a major Wall Street bank, JP Morgan Chase.
The IG's charges of misconduct grew out of an SEC probe that began in 2003 of JPMorgan and other big financial institutions suspected of illegal market practices.
Demos has denied he did anything improper, and his campaign declined to comment on the matter. But documents obtained by the Project On Government Oversight (POGO) -- a non-partisan non-profit based in Washington -- confirm that Demos was the staff attorney who was cited in the IG report for violating SEC rules.
The IG referred the case to the agency's management for possible disciplinary action, but the SEC took no action. Soon after that, Demos quietly resigned from his job and launched his bid for a seat in the House of Representatives.
But the confidential information that Demos disclosed was used by a JPMorgan lawyer against one of the bank's own employees, a whistleblower who had alerted the SEC to possible wrongdoing by his employer, according to the report and other documents, some released under the Freedom of Information Act.
The significance of the case goes beyond politics.
In response to widespread public anger over Wall Street abuses and a weak economy, the SEC and its latest chairman, Mary Schapiro, have pledged repeatedly to protect whistleblowers and pay more attention to their reports of illegality and market abuse.
The Madoff case itself involved a whistleblower whose information the SEC had largely ignored, and a financial analyst at a prominent Wall Street company said last year that he, too, had trouble getting phone calls returned by the SEC after informing the agency his employer might be breaking the law. In response, the SEC has launched a program to cope with the hundreds of thousands of tips it receives every year, but progress has been painfully slow.
Meanwhile, the SEC also appears to be brushing aside or delaying action on the recommendations of its own IG, and not just in the Demos matter. In response to a recent Freedom of Information Act request submitted by POGO, the SEC has said that since 2007 there have been more than 200 recommendations from its IG on which the agency has either taken no action, or on which action was still pending.
Demos is a 33-year-old politically wired attorney who attended Fordham Law School. According to his campaign Web site, his donor list includes wealthy Wall Streeters and others, who have given him more than $300,000 since October.
His bio includes stints in the District Attorney's office in Suffolk County, Long Island, and service as enforcement lawyer at the SEC from 2002 to 2009.
He was involved in the campaigns of former New York Gov. George Pataki and former Sen. Alfonse D'Amato, and is now in a field of candidates, including Chris Cox, an attorney and the grandson of former President Richard Nixon, who are seeking the GOP nomination in New York's 1st Congressional District, a swing district. The seat is currently held by Tim Bishop, a Democrat, who is considered vulnerable in November.
The SEC IG's findings did not identify Demos by name when they were included in the watchdog's semi-annual report to Congress last year. But documents obtained by POGO, including internal SEC materials and related correspondence, make clear that Demos' conduct lay behind the section of the report on the JPMorgan whistleblower, who worked as a mid-level compliance officer in New York.
According to a redacted version of the report, the whistleblower, whose name is Peter Sivere, first came to the SEC with what he described as "confidential" evidence of the bank's alleged failure to disclose material sought in the SEC probe.
The SEC was investigating a practice known as market timing, which can be illegal. It typically involves trading that favors short-term buyers and sellers to the detriment of long-term shareholders like retirees.
After the whistleblower's initial e-mail contact with the SEC in June 2004, Demos replied to him, confirming, among other things, that the agency's probe was "confidential."
Several major institutions, such as Bank of America and Alliance Capital Management, later reached settlements in similar SEC inquiries, but JPMorgan was never charged with a violation, and this week had no comment.
In July 2004, Sivere brought an employment claim against JPMorgan before the Occupational Safety and Health Administration. He contended that the bank began threatening his job after he had gone to the SEC. JPMorgan strongly disputed Sivere's allegations.
OSHA issued a preliminary finding in favor of the whistleblower, saying there was "reasonable cause to believe" that he had faced retaliation, and that his "preliminary reinstatement" was warranted. Not long after, Demos informed JPMorgan's counsel that Sivere had initially sought a cash payment from the SEC for information he was offering the agency, apparently in hopes of benefiting from a well-publicized SEC program to elicit information from tipsters.
The lawyer for JPMorgan then used Sivere's confidential request for a bounty to question his whistleblower credentials, and informed OHSA that he had asked for money. Apparently concerned that this had damaged his case, despite the initial finding in his favor, Sivere then dropped his complaint against JPMorgan and settled the case.
A well-known Washington securities lawyer who did not want his name used in a discussion of the sensitive case explained that "whistleblowers are often unfairly disparaged for requesting payments, even though U.S. law specifically authorizes rewards to certain informants." JPMorgan has denied any impropriety. It ultimately fired Sivere in October 2004.
In October 2008, the SEC's IG launched its own investigation in response to information from Sivere. Its final report provided a description of what it said was Demos' improper disclosure, as well as an earlier, internal SEC examination of the matter.
Demos, when first questioned by an SEC supervisor, "did not admit" to the improper disclosure, the IG report says, though he did concede he might have been responsible, saying he "did not remember."
Based on that inconclusive evidence, Demos' SEC superior drew no definite conclusion about whether Demos had made the disclosure. Even so, he formally "counseled" Demos in late 2005 about the importance of keeping protected information within the agency, the IG said.
The IG later interviewed Demos' SEC superior and others at the agency. The IG also contacted lawyers for JPMorgan, including one to whom the disclosure had been made. That lawyer readily identified Demos as the source of his information, according to documents.
As the IG report concludes, Demos "not only gave . . . JPMorgan permission to use the non-public information about an informant against him [in the OHSA proceeding], but actually encouraged such use."
The IG found that Demos' disclosure was a violation of SEC rules, which severely restrict the release of confidential information obtained in the course of an investigation.
The failure of Demos' campaign to let prospective voters know about any of these events may not be surprising, but only days after he launched his run for Congress on Oct. 13, 2009, candidate Demos sent a two-page letter rebutting charges of ethical misconduct in the SEC matter that had surfaced in another forum: the Departmental Disciplinary Committee of the New York State Supreme Court Appellate Division, which reviews and investigates ethical complaints against lawyers.
Upset that the SEC was doing nothing in response to its own IG's disciplinary referral, the New York ethics complaint naming Demos was filed by Sivere, the fired whistleblower. Demos' letter in response to that complaint argued that it was "entirely without merit."
The complaint has yet to be resolved, but could result in a finding of no wrongdoing or penalties ranging from censure to disbarment.
In his letter to the Supreme Court's Disciplinary Committee, Demos concedes that information about the whistleblower may have been released, but only in line with SEC "regulations and policies." Demos' statement appears to be at odds with the IG's finding.
His letter also attacks the protected status of the whistleblower's information, arguing that the one time JPMorgan employee "was owed no duty of confidentiality or loyalty by the Commission [SEC] or me" -- another statement that contradicts the IG's conclusions.
Michael Smallberg is an investigator at the Project On Government Oversight (POGO). Adam Zagorin is Journalist in Residence at POGO. POGO is a non-partisan, non-profit government watchdog group based in Washington, D.C.""
Source
http://www.politicsdaily.com/2010/01/28/long-island-congressional-candidate-cited-for-giving-up-jpmorgan/
I do not believe that the SEC even Tries to Check on Reports or Tips... I believe that the SEC, Mary Schapiro looks at who the "Names" and "Players" are and decides from there whether to look into it or not.. the Iviewit Trillion Dollar Stolen Patent Case Shows this VERY Well... as the SEC, Mary Schapiro knows full well of a Massive Shareholder Fraud and they DO NOTHING.. they don't even seem to acknowledge it has been reported...
more on the iViewit Stolen Patent at
www.Iviewit.TV and www.DeniedPatent.com
and More on Mary Schapiro Click Here
the Obama Administration Brags about new laws to protect Whistleblowers... Laws seem to be in place but in the Real World Whistleblowers are Treated as Criminals and their Lives are turned upside down...
Subscribe to:
Posts (Atom)