SEC wasn't quite sleeping under Christopher Cox's leadership. They were watching porn!

I had written here that Christopher Cox, former head of the SEC under the Bush Administration, should have been brought up on charges of incompetence and criminal behavior for all the problems related to the SEC during the years 2007 and 2008. The headlines today reveal just how bad things were under Cox's leadership. Here's the headline: "GOP ramps up attacks on SEC over porn surfing."

and now a few excerpts:

"WASHINGTON – Republicans are stepping up their criticism of the Securities and Exchange Commission following reports that senior agency staffers spent hours surfing pornographic websites on government-issued computers while they were supposed to be policing the nation's financial system."

" it was "disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking action to help stave off the events that put our nation's economy on the brink of collapse.

In addition here's some other juicy tidbits:

• A senior attorney at the SEC's Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of hard drive space, he burned the files to CDs or DVDs, which he kept in boxes around his office. He agreed to resign, an earlier watchdog report said.
• An accountant was blocked more than 16,000 times in a month from visiting websites classified as "Sex" or "Pornography." Yet he still managed to amass a collection of "very graphic" material on his hard drive by using Google images to bypass the SEC's internal filter, according to an earlier report from the inspector general. The accountant refused to testify in his defense, and received a 14-day suspension.
• Seventeen of the employees were "at a senior level," earning salaries of up to $222,418.

A Congressman from California said he expects the head of the SEC, Mary Schapiro and her team, are "very focused on" the issue. Schapiro has been parrying GOP complaints about the Goldman Sachs lawsuit, which agency officials hoped would mark a new era of tougher oversight of Wall Street. They followed high-profile embarrassments including the failure to catch Ponzi kings Bernard Madoff and R. Allen Stanford.

Republican lawmakers also accused the SEC of being influenced by politics. The SEC's commissioners approved the Goldman charges on a rare 3-2 vote. The two who objected were Republicans. Schapiro is a registered independent who has been appointed by presidents of both parties.

So you see, there is much to charge Christopher Cox with given this probe. He surely deserves it and I am pressing Congress to hold hearings and subpoena Mr. Cox to testify. And boy do I hope they file charges of some kind so he has to spend some jail time!

If you are interested in reading my earlier Blogs on Christopher Cox, click here and here, or here and if you are interested in reading the entire news story above from Yahoo, click here.

It's time for all to focus on SEC Chairman Christopher Cox!

Back on November 23rd, I wrote that we need the SEC to reinstate the "Uptick Rule" to prevent those who short the market and stocks to do so at this time which will exacerbate the problems. It is in part why Citigroup stock fell so sharply and why it was bailed out a week or so ago. The quote back then was, "One of the reasons Citi finds itself in this situation is the loss in their stock value at $3.94. One thing which would help is if the SEC re-instituted its Uptick rule to prevent continued shorting of the stock by speculators. It was the worst decision in SEC recent history to abandon the rule. Many have called for the head of Christopher Cox, head of the SEC and a Bush appointment. It seems too late for that but Cox could reinstitute the Uptick rule and help minimize a further slide in the share price. I just don't have any confidence in him doing that. It would be admitting he made a mistake and that is something the Bush Administration will not consider."

Well it is time for all to put the light back on SEC Chairman Cox, because what he is doing by not re-instituting the Uptick Rule is to give favored interest (he worked for the international law firm of Latham and Watkins) where the law firm defended many Hedge Fund cronies. The Hedge Funds are getting their payback and favored interest, as long as the Uptick Rule has been made void. Hedge Funds are not regulated and they like it that way and use firms like Latham and Watkins to help keep it that way. So let's all write to our Congressional leaders and local newspapers calling for Cox's head and possible indictment. He was appointed by President Bush and is in his final days in this Administration but one could argue what he has done is criminal and minimally requires more investigations by Congress.

You see my friends these people can take the markets down further below to 7,000 at any moment and they will clean up with your Retirement accounts going lower in value. This rule needs to be put back in play as soon as possible. Wake up to Chairman Cox and do some research on his background and see who are his special interest buddies. He most likely will return to work for this Hedge Fund firm in 60 days. Putting him in as SEC Chairman was like putting the fox in charge of the hen house or putting Chemical company management, Mining executives and other toxic producers in charge of the EPA.

THe financial crisis slowly plods along. We're lucky it is giving experts time to think about solutions!

Main Street media is reporting that the government is considering a bailout of Citigroup. Citigroup also has already received a $25 Billion package from the TARP funds, so many wonder what Treasury is now considering as its options. Citi lost its bid for Wachovia to Wells Fargo. While at the same time the Administration and those of the Obama Administration are trying to calm and stabilize markets here and abroad. All this while many are ambivalent about a bailout of the Auto Industry and specifically GM. This is leading to our friends abroad in Europe and Asia wondering whether the U.S. is going to have an unfair advantage over rivals, many of which are made in those regions.

They will not let Citigroup fail. So right now it's all about speculation. One of the reasons Citi finds itself in this situation is the loss in their stock value at $3.94. One thing which would help is if the SEC re-instituted its Uptick rule to prevent continued shorting of the stock by speculators. It was the worst decision in SEC recent history to abandon the rule. Many have called for the head of Christopher Cox, head of the SEC and a Bush appointment. It seems too late for that but Cox could reinstitute the Uptick rule and help minimize a further slide in the share price. I just don't have any confidence in him doing that. It would be admitting he made a mistake and that is something the Bush Administration will not consider.

But in spite of it all, I believe this week ahead will be good for the markets. I'll state why tomorrow. Come back then.

Testimony in the Oversight and Gov't Reform Committee

Testimony is being obtained today from former Fed. Reserve Chairman Alan Greenspan, SEC Chairman Christopher Cox, and former Treasury Sec. John Snow. This Committee is headed by its Chairman Rep. Henry Waxman (D) of California, but the quote of this day was by Minority Chairman Rep. Tom Davis (R) when he said to SEC Chairman Christopher Cox,

"The failure (by the Congress) to regulate the Credit Default Swap Market basically resulted in legalizing gambling (in those markets)."

They knew this Financial crisis was coming in 2004

This is a NY Times article and a must read as to how we got in this financial mess. Readers will be as surprised as I was. Here are a few excerpts and a link to the entire article:

"How could Mr. Cox (SEC Chairman) have been so wrong?

Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary."

To read the entire article click here.