Insight and investigations from our expert reporters
All too often, the U.S. Securities and Exchange Commission gives its critics plenty of ammunition to complain about.
The SEC’s spectacular failure to detect the massive Ponzi scheme being run by Bernie Madoff is only the most high-profile miss by the agency. Over the years, the nation’s top securities cops have been slow to police abusive trading by hedge funds and spread of complex structured products–including subprime ones–churned out by Wall Street banks.
But it appears when it comes to handling tips and complaints from the public, the SEC may be learning from its mistakes and getting its act together. A new computerized database for processing tips about corporate and securities fraud is winning praise from some of the SEC’s most vocal critics. The SEC’s new approach is even making a believer out of Madoff tipster Harry Markopolos.
For more on the SEC’s new database and its closer partnership with the SEC read our story here.
Action in March by federal bank regulators wasn’t enough to scare banks away from the way they handled foreclosures. Reuters found that big banks that service mortgage loans continue to use robo-signers, file false documents and mislead courts in their efforts to take houses from homeowners delinquent on their mortgages.
The findings point to the need for a widespread audit of mortgage documentation by federal bank regulators, a step they have so far strongly resisted. The pervasive use of questionable documents in foreclosures suggests that the cause is deeper than just corner-cutting by mortgage loan servicers. It suggests that to a large extent, original lenders never turned over the required ownership documents when pools of new mortgages were securitized and sold to investors. Investors may have spent billions to buy mortgages they never received.
Back in December, a Reuters investigation examined the ties between economists who testify to Congress on financial regulation and big financial institutions.
A Reuters review of 96 testimonies given by 82 academics to the Senate Banking Committee and the House Financial Services Committee between late 2008 and early 2010 — as lawmakers debated the biggest overhaul of financial regulation since the 1930s — found no clear standard for disclosure.
Steven Barnett, professor of communications at London’s Westminster University, spoke for a lot of people when he said of the news: ”Astonishing. I’m completely gobsmacked. Talk about a nuclear option.”