The SEC Admits... Chris Cox Screwed Up Lehman, Never Again.
YO! SEC! I have something for you. You've been copied on bazillions of emails and I'm sure you have a crack team all over this but psssst Overstock OMG! Get on that. Please. Otherwise all this shit about "it's Chris Cox's fault" and "I have no idea what you're talking about, I inherited this mess" goes directly out the window and you motherfuckers are fighting for your job like Bernanke was not that long ago. Hit him up, he'll tell you.
U.S. Securities and Exchange Commission Chairman Mary Schapiro on Wednesday acknowledged that the agency's oversight of Lehman Brothers Holdings may have been inadequate during a critical period when the company may have masked its losses.
The SEC wasn't aware of an accounting method, dubbed Repo 105, that allegedly allowed Lehman to hide some of the risks it took before collapsing in 2008, Ms. Schapiro told the House Appropriations Subcommittee on Financial Services.
The House Financial Services Committee, meanwhile, announced Wednesday that it will hold a hearing on the recent report from a bankruptcy court accusing Lehman of routinely hiding $50 billion in debt from the public.
The SEC was the consolidated supervisor of Lehman during 2007 and 2008 as a result of Lehman's participation in a voluntary oversight program that existed under former SEC Chairman Christopher Cox. That program was dismantled about a year and a half ago, Ms. Schapiro said.
Ms. Schapiro took the helm of the SEC just over a year ago.
"It was inadequately staffed almost from the very beginning. It was a bit insular and stove-piped," she said.
"This program really required more of the banking regulators' sort of approach," Ms. Schapiro said, adding that the SEC was "ill-suited, because of our disclosure and enforcement mentality, to really convert to being a prudential regulator."
K, fast forward to a year and a half after the total collapse of Lehman, the SEC is getting (likely) daily emails from Sam Antar about Overstock.com and still nada from the "investor protection" brigade. But boneheads like Sean David Morton are way up on the SEC's list of bad ass financial criminals. A psychic v a crook? STOP REARRANGING THE DECK CHAIRS ON THE TITANIC AND DO YOUR JOB!