BATTLE HEATING UP: SEC, GOLDMAN AND OTHERS DESTROYING DOCUMENTS

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FROM MARKET WATCH

SEC may have destroyed documents, senator says

Grassley: Agency may have got rid of Goldman, Madoff documents

By Ronald D. Orol, MarketWatch

Updates to include SEC settlement with Aguirre

WASHINGTON (MarketWatch) — The Securities and Exchange Commission may have destroyed documents and compromised enforcement cases involving activity at large banks and hedge funds during the height of the financial crisis in 2008, according to allegations made by a lawmaker on Wednesday.

“From what I’ve seen, it looks as if the SEC might have sanctioned some level of case-related document destruction,” said Sen. Chuck Grassley, Republican of Iowa, in a letter to the agency’s chairman, Mary Schapiro.

Sen. Chuck Grassley

“It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what timeframe, and to what extent its actions were consistent with the law.”

Agency staff “destroyed over 9,000 files” related to preliminary agency investigations, according to a letter sent in July to Grassley, the top Republican on the Senate Judiciary Committee, and obtained by MarketWatch.

The allegations were made by SEC enforcement attorney, Darcy Flynn, in a letter to Grassley. Flynn is a current employee, and according to the letter, received a bonus for his past year’s work.

Flynn alleges the SEC destroyed files related to matters being examined in important cases such as Bernard Madoff and a $50 billion Ponzi scheme he operated as well as an investigation involving Goldman Sachs Group Inc. GS -3.96%   trading in American International Group credit-default swaps in 2009.

Flynn also alleged that the agency destroyed documents and information collected for preliminary investigations at Wells Fargo & Co. WFC -5.23% , Bank of America Corp. BAC -5.93% , Citigroup C -7.89%  , Credit Suisse CS -9.28%  , Deutsche Bank DB -7.79%  Morgan Stanley MS -6.17%  and the now-bankrupt Lehman Brothers.

The letter goes into particular detail about Deutsche Bank, the former employer of current SEC enforcement chief Robert Khuzami as well as former enforcement chiefs Gary Lynch and Richard Walker.

The allegations that the SEC destroyed documents were first reported by the Rolling Stone magazine in a report Wednesday.

An SEC spokesman did not return a request for comment. However, according to the Rolling Stone article, the SEC told the National Archives and Records Administration that the commission “is not aware of any specific instances of the destruction of records from any other MUI.”

The SEC added that it “cannot say with certainty that no such documents have been destroyed over the past 17 years.” Read Grassley’s letter to the SEC

Flynn’s lawyer, Gary Aguirre, was a former SEC attorney. Aguirre was fired in September 2005 as he was investigating allegations of insider trading at the major hedge fund Pequot Capital Management.

11 Responses

  1. […] in CA, on August 18, 2011 at 12:57 pm said: Nancy Drew or Mary Cochraine–I think we all know how to manuever around in LivingLies to […]

  2. […] BATTLE HEATING UP: SEC, GOLDMAN AND OTHERS DESTROYING DOCUMENTS Posted on August 18, 2011 by Neil Garfield […]

  3. SEC DOES NOT ‘CONTROL’ DOCUMENTS TO BE DESTROYED DO THEY? ARE THEY THE ‘DOCUMENT CUSTODIAN’? OF THE LITERAL AGREEMENTS? WHAT DOCUMENTS ARE NOT RECORDED ON SECINFO.COM? ONES PRIOR TO 1995?

  4. Abbey because I choose to put on the SEC information related that SEC Experts now aware of which are direclty related to the economic disaster.. Thank you. Mary and Nancy

  5. Nancy Drew or Mary Cochraine–I think we all know how to manuever around in LivingLies to find Neil’s posts. It is rather redundant to post links to his already posted commentaries.

    His site is very easy to manuever and he has a ‘search’ area at top right of the page.

    I know you mean well, but it is rather redundant.

  6. NOTE: DOCUMENTS BEING DESTROYED DIRECTLY RELATED TO ‘TRUSTEES’

    TRUSTEES responsbile for nationwide sale and resale of real estate loans.

    TRUSTEES responsible for nationwide purchse of mortgage notes and reselling servicing rights c/o Master Servicer.

    One ‘loan trust’ the TRUSTEE responsible for all of the ‘collateral’ transferred in and out of the trust.

    Very clean line of business moving electronically on intergrated network all of the TRUSTEES’ vendors, providers, affilaites transactions in which consumer complaints reveal any ‘issues.’

    FEDERAL RESERVE birds eye view of all complaints by individual consumers and commercial consumers via OCC and OTS for the SEC would have to contact the OCC and/or OTS to review evidence

  7. http://livinglies.wordpress.com/2011/08/17/start-with-the-wrong-assumption-end-up-with-the-wrong-result/
    START WITH THE WRONG ASSUMPTION — END UP WITH THE WRONG RESULT

  8. http://livinglies.wordpress.com/2011/08/17/aztec-foreclosure-corp-antics-analyzed/
    Aztec Foreclosure Corp Antics Analyzed

  9. EXTRA-Ordinary Powers vested by CONGRESS under Article I, Congressional Branch makes laws and vests powers.

    EXTRA-Ordinary Powers Vested To:
    FEDERAL RESERVE

    Congress prevents enforcement of laws by Executive Branch under Article II vested powers to enforce laws by

    Congress vested Jurisdiction over unlawful business acts to Attorney Generals

    Exception: related to FEDERAL RESERVE

    Will ‘TRUSTEE’ with national assocaition and federal association affixed to their ‘brand label’ be protected under the latest attempt to enforce stautory laws of the USA?

    President Obama how much do you want to get reelected?
    As Commander-In-Chief I mean no disrepsect to you personally. Your ‘office’ has powers to bring into the light of day who harmed economy.

  10. DOCUMENTS DESTROYED FOR BENEFIT OF ‘TRUSTEE’

    AND HOW DID TRUSTEE’S KNOW WHICH DOCUMENTS TO DESTROY?

    ALL ‘INVESTIGATIONS’ OF ALL COMPLAINTS OF ‘CONSUMERS’ C/O OCC & OTC C/O FEDERAL RESERVE!

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