– Editorial Market Commentary –

August 5, 2010 (FinancialWire) (Investrend Forums Syndicate) (By Bud Burrell) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — The original Freedom of Information Act (known hereafter as “FOIA”) was passed in 1966 to be effective in 1967, over the strong objections of the President Lyndon Johnson. The intent of the legislation was to improve transparency of the public into the operations of the US Government. It has been amended many times, and with time, the bureaucracy of our Federal Government had made it more and more expensive and time consuming to get anything important out of such requests.

Last week, as part of the Financial Reform Act, the SEC was “exempted” from the requirements of the FOIA. I guess this is more of the vaunted promises of this Administration to give the public greater transparency into the actions of the US Government’s most powerful agencies. The SEC has been an egregious abuser of requests for information made of that agency whether pertaining to civil or criminal matters for decades, the latter which they have previously claimed exemptions for as a federal police agency.

Over the past ten years, the SEC and its partner in crime, the DTCC, have stone-walled very effectively the requests for access to records that could show that others had violated federal laws, or that they themselves were guilty of acting as co-conspirators in the commission of monstrous trillion dollar frauds on the public, banks, hedge funds, investment managers, and more, many times with the support of Congress.  Certainly the most egregious example of this is the conduct of Congressman Barney Frank and Senator Christopher Dodd in protecting grotesque criminality, material misrepresentation, malfeasance and more by Fannie Mae and Freddie Mac, with whom both had inappropriate relationships.

Now the SEC claims that it will only be required to address requests for information from Congress alone, and not from any others. This is shameful, and it negates the original underlying principal of the FOIA. Intended originally to shine a bright light into the darkest corners of our own Government, it has effectively blinded inquiry into this agency and its minions across the Board. This needs to be challenged constitutionally, all the way to the Supreme Court. We no longer have a mature and independent, unbiased media to probe these arrogant mandarins, their revolving doors into and out of the major law firms, major broker dealers, big banks, and other self-regulated organizations including the exchanges, and more. So how will this scum be lighted up?

This come on the heels of stinking deals with Goldman Sachs, Bank of America, and more, in which the SEC settled enormous securities fraud cases for pittance amounts for multi-billion dollar frauds that stripped assets of the American public with US Government cooperation and silence.

I had held out hope that the SEC would be shuttered by the Financial Reform Act, not practical with the lobbying horsepower of SEC Practice Lawyers, Tort Lawyers, and securities industry proto-persons. The SEC shook off these flies like a horse swatting flies from its hindquarters. They will keep laughing all the way to their individual Banks, no exception. And corrupt Congressmen and Senators will continue to engage in material conflicts of interest and self-dealing involving the SEC, FINRA, DTCC, et al, ad infinitum, ad nausea. They sow the very seeds of their own ultimate destruction by other than traditional legal means. May God see them treated the way they have treated others.

Many cases have needed critical information particularly on trading to make their fraud cases against the entities the SEC is mandated to protect. It has been almost impossible to get such information except in a couple of cases, and then only when a Federal District Court Judge issued a subpoena for the needed information. The SEC has made every attempt to make such information as obscure as possible, mixing up the records, omitting key documents, and more. They and their officials should have been jailed for contempt many times, and yet, it has never happened. There is no question a dishonest set of double standards have been applied to protect these appointed officials from being held to the same standards as plaintiffs.

Thousands of companies have been “desaparecido’d” into the black maw of our soiled public markets. Only a handful of these companies’ cases have been able to get to Court to get justice, and only one has ever been allowed to get in front of a Jury. The SEC is clearly terrified of the judgment of a trial jury. They have told so many lies to so many people so many times that they have started to believe their own gags. In the process of their repeated lies, trillions of dollars have been stolen from millions of investors in these thousands of companies, all while those who should have protected us slept well and ate heartily at the trough of the criminal perpetrators.

I am too close to this to have been left unmarked. I will never let a US company go public in our markets, not without yelling and screaming at them. No one company can protect themselves from so many criminals hungry for their perception of their due.

As I have said before, there will be a reckoning here, sooner or later. I like to envision the criminals coming back as 9 legged sea cockroaches. Om Pade Mum.

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Source: Investrend Weblogs (http://www.investrendweblogs.net/bburrell/).

(Go to http://www.financialwire.net/?s=brrllbby for other recent commentaries by Bud Burrell.)

Bud Burrell’s experience spans a diverse spectrum, including service with the U.S. Military in the Special Forces, as a Finance Officer and as a Project Finance & Accounting Officer. Burrell also pursued studies in fine arts, the Renaissance, Russian history, and Chinese culture. Following years of working on Wall Street, he worked with specialty and derivative money management consulting and research and development in IT and AI.  Since then, Burrell has worked globally with major development stage companies from the IT, energy, alternative energy, bio-pharma, and general technology arenas, as well as on counterfeiting and financial fraud scandals.

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