http://www.asensio.com/

How obvious can it be?

The SEC holding a roundtable on NSS with the capos of NSS.

From Matt’s column today is this excerpt about Wednesday’s SEC roundtable on NSS, followed by Kaufman’s press release.

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Kaufman and Isakson Statement on Tomorrow’s SEC Roundtable on Short Selling

September 29, 2009

WASHINGTON, D.C. – Sens. Ted Kaufman (D-DE) and Johnny Isakson (R-GA) released the following statement in advance of the Securities and Exchange Commission’s (SEC) roundtable on short selling tomorrow.

“Tomorrow’s SEC roundtable is long awaited, but it is clear that the panel is stacked against the need for restrictions on naked short selling. In the recent financial decline, there was abusive short selling enabled by the repeal of the 70-year-old uptick rule and a lack of so-called pre-borrow or hard locate requirements.

The recent bull market, however, has lulled us into a false sense of security. If we do not enact these proposals – the uptick rule and either a pre-borrow or hard locate requirement – the same people who drove down certain stocks in the past will just do it again.

We need to focus on giving the SEC’s Enforcement Division the tools to end naked short selling once and for all.”

http://kaufman.senate.gov/press/press_releases/release/?id=aa7bc6d1-f21c-4e8d-b500-7123247c5c9b

http://www.economicpolicyjournal.com/2009/09/us-government-gold-manipulation.html

Private fed wanted to manipulate gold prices while the government treasury didn’t. Guess who won out, Wallstreet or democracy?

Inspector general lists post-Madoff changes at SECFont size: A | A | A1:45 PM ET 9/29/09 | Marketwatch
WASHINGTON (MarketWatch) — The Securities and Exchange Commission’s inspector general on Tuesday recommended that the agency’s enforcement and inspections divisions make changes to how it handles tips and complaints, after it failed to follow up on detailed information and missed exposing the biggest fraud in the regulator’s history: the $50 billion Ponzi scheme perpetrated by Bernard Madoff.

The SEC should “require tips and complaints to be reviewed by at least two individuals experienced in the subject matter prior to deciding not to take further action,” according to one of 20 post-Madoff recommendations made by the SEC’s inspector general.

Tuesday’s report comes after SEC Inspector General David Kotz issued a detailed report on Sept. 2 about how the agency fumbled its various investigations into Madoff’s funds — in particular, how the agency failed to follow up on three versions of a complaint that well-known investor Harry Markopolos brought against Madoff in 2000, 2001 and 2005.

Based on that report, Kotz is making a series of recommendations about how the agency’s enforcement division could improve its programs to make sure another massive Ponzi scheme doesn’t happen again.

In addition to having at least two experienced persons review each tip and complaint, the report also seeks to have the SEC set up a more sophisticated system for handling incoming information. The system would require documentation of why a complaint “was or was not acted upon.”

Kotz also recommends that the agency establish and annually review guidelines that require all complaints that appear to be credible to be followed up with “in-depth” interviews to assess the validity of the claims.

Lack of experience

Responding to concerns that SEC investigators of the Madoff scam did not have sufficient experience, Kotz said the agency should put in place procedures to ensure that investigations are assigned to teams, where one individual has “specific” knowledge of the subject matter, such as Ponzi schemes.

This recommendation responds in part to one point discussed in the Sept. 2 report, which revealed that the majority of a 2005 investigation into Madoff was performed by a staff attorney who had recently graduated from law school, and only joined the SEC 19 months before she was assigned the investigation. The attorney had never been the lead staff attorney on any investigation before, the report said.

Inspection failure

Kotz also retained FTI Consulting Inc. to complete a review of the agency’s Office of Compliance, Inspections and Examinations — known as OCIE, the agency unit responsible for evaluating complaints and for periodically examining the books of institutions registered with the agency.

In 2003, for example, the unit didn’t “properly evaluate” a complaint from “highly credible sources” about problems with Madoff’s fund, according to the report. Madoff was registered with the agency and his funds were subject to — and received — periodic inspections.

FTI also had 37 recommendations, according to the report, including one that would have the SEC set up a collection system for gathering tips and complaints. The group also recommended that all tips considered by the inspections office are vetted within 30 days of being received, with any examinations of funds that take place because of the tips commencing 60 days after the complaint is received.

In a recommendation similar to Kotz’s proposal for the enforcement division, FTI also recommends that the inspections team document all interviews they complete and log all examinations into a tracking system.

The group also sought to establish guidelines for searching and screening news articles and other information from industry sources that may indicate securities-law violations by investors and broker-dealers.

“The protocol should include flexible searching capability to help identify specific areas of risk or concern and should include access to all relevant industry publications. The protocol should also include adequate screening criteria to eliminate unnecessary results and/or to more narrowly define a search in order to generate sufficient results,” according to the FTI report. “The screening criteria and any changes should be documented and the protocol should be reassessed regularly to determine if any modifications are appropriate.”

9:40-11 a.m. – Panel 1
Controls on “Naked” Short Selling: Examination of Pre-Borrow and Hard Locate Requirements

William Conley, Goldman Sachs
Peter Driscoll, Security Traders Association
Dr. Frank Hatheway, NASDAQ OMX Group
William Hodash, The Depository Trust & Clearing Corporation
Paul Lynch, State Street Corporation
Michael Mendelson, AQR Capital Management
Dennis Nixon, International Bancshares Corporation
William O’Brien, Direct Edgeks,
Thomas Perna, Quadriserv, Inc.

Could the SEC be more transparent?

Why don’t they just say, “Brought to you by Golden Slacks”?