The corporate watchdog has received just 168 complaints alleging corporate fraud in the first 6½ months of the program’s existence, according to data the SEC provided to The Post through a Freedom of Information Act request. The tally is from July 22, 2010, when the program was launched, through Feb. 2, 2011. At that rate, the SEC is receiving less than one tip a day — hardly the flood that led the agency to delay staffing the program while it pleaded with lawmakers for more funding. [NYP]
As fun as this must be for the SEC, for some reason there are a few people that would like to discuss the SEC’s reaction to a Ponzi scheme whose alleged perp will likely die awaiting trial.
Even though Mary Schapiro can’t believe this timing (!), fine, she’ll humor you. But don’t interrupt again. They are trying to God’s work (and maybe win over some voters).
The following is a statement from SEC Chairman Mary L. Schapiro regarding SEC Office of the Inspector General (OIG) Report 526 — “Investigation of the SEC’s Response to Concerns Regarding Robert Allen Stanford’s Alleged Ponzi Scheme”:
“This report recounts events that occurred at the Commission between 1997 and 2005. Since that time, much has changed and continues to change regarding the agency’s leadership, its internal procedures and its culture of collaboration. The report makes seven recommendations, most of which have been implemented since 2005. We will carefully analyze the report and implement any additional reforms as necessary for effective investor protection.”
In other words, “I’m turning this ship around, and most of your bullshit suggestions are already in place, so how about you take your light your OIG report on fire?”
The man is a forensic sleuth, no question. Is he a hero? What’s a hero? Could he train young SEC grasshoppers to be fraud detecting machines like him? Probably. David Weidner — among others — isn’t enthused, especially with Harry’s idea about who should play him in a movie (Hanks, Damon, Cage).
And we’ll just go on record to say that we aren’t on board for Marks to take over either. Forget about our constant griping about the pipe dream that is accounting rule convergence and how HM’s input won’t likely amount to squat. That’s not what’s important.
What’s important to remember is that the man cannot control his bodily functions. As you may recall, the ACFE named Markopolos as their Fraud Examiner of the year and he spoke at their big to-do in Vegas where he admitted that he regularly soiled himself while investigating Bernie Madoff. This is unacceptable.
Look, maybe this isn’t a big deal for some of you but if the man wants to be in the big chair he can’t be changing his undies every couple of hours when he’s trying to crack a big case. Do you think Mary Schapiro has drawer full of extra VS? NO. WAY. So before you jump on the Marks bandwagon for the next Chair of Enforcing the Financial Universe, let’s not forget that when he gets nervous, he’ll be extra unpleasant to be around.
We hope! Remember how James Kroeker said how the Commission was “turning our focus back to the proposed roadmap”? No? Well, he did. And apparently he was serious because the SEC is having a meeting tomorrow about said roadmap. The whole time we’ve been reading about this map to godknowswhere, we just figured it was a figment of our imagination.
But a meeting! A meeting to decide whether or not the SEC will publish a statement! That’s somewhat encouraging, isn’t it? Here’s exactly what’s on the docket for the Sunshine Act Meeting:
“The Commission will consider whether to publish a statement regarding its continued support for a single-set of high-quality globally accepted accounting standards and its ongoing consideration of incorporating International Financial Reporting Standards into the financial reporting system for U.S. issuers.”
Okay, so if we’re reading this right, this particular sit-down will be to decide whether or not the Commission will put out an official statement regarding global accounting standards and if IFRS is good enough for us here in the US of A. Since everyone seems to be doubting the SEC’s ability to play nice with the rest of the world on the whole issue, they figured a hippie-ish sounding meeting should help calm everybody down.
We can only foresee two outcomes from this meeting: 1) the SEC decides that they will publish a statement (after more meetings) and give an approximate date that the statement will be released and it will be delayed for an indeterminable amount of time, or 2) the Commission decides it will not publish a statement that the IASB can take its self-righteous double-entry accounting attitude back to London-town and we’ll just do whatever the hell we want. THE END.
SEC to Meet Wednesday on IFRS Roadmap [Web CPA]
SEC considers reaffirming commitment to global standards [Accountancy Age]
A little afterthought on Carlo di Florio’s new gig as the director of the Office of Compliance and Inspections and Examinations (“OCIE”). And no, we’re not caving to the request of some to go ape over the revolving door that is every financial regulatory agency.
Our thought is this man has absolutely no pressure heading into his new job. None. Look at the track record of his predecessor:
Lori Richards, who had headed OCIE since its creation in 1995, left the SEC last August. She was one of several high-level officials, including the enforcement director, who departed the agency after Schapiro took the helm in January 2009.
Kotz has detailed how the SEC bungled five investigations of Madoff’s brokerage business between June 1992 and December 2008, when the financier confessed to his sons that he was operating a fraudulent scheme. Top SEC officials have pledged to fix the problems and said they have made major changes.
So essentially he’s following 13 years of utter incompetence.
Plus, according to the Commission, Carlo was a dynamo at P. Dubs helping them build their “corporate governance, risk management and regulatory compliance practice[s]” and was a top dog for “[investigating] corporate fraud, corruption, conflicts of interest and money laundering.” So if he’s the jim-dandy they say he is, he’ll be finding fraud in his sleep. The SEC is in total rebuilding mode and he’s following over a decade of failure so is there anything he could possibly do to screw this up? A few decent busts a year and this guy will go down in history like Eliot Ness.
Well played, Carlo. Well played indeed.
Head of SEC Inspections Office Named [AP via NYT]
Kroeker reiterated earlier statements that he and SEC Chair Mary Schapiro had made, indicating the SEC was turning its attention this fall to the proposed IFRS roadmap. When asked about the date, Kroeker said, “There will be follow-up on the roadmap this fall.” Asked to define the word “fall,” he noted that the season ends on Dec. 21.
Fall ended at 12:47 pm EST today. Anyone seen this map?
How’s this for awkward: Mary Schapiro makes $162,000 as the big chief at the SEC. The Chairman of the PCAOB makes $672,676 a year and board members get $546,891. And just so you know, B to the H to the O makes $400k.
The Berg says that, “Salaries for PCAOB members exceed the pay for most public officials to make the jobs competitive with the private sector,” which probably explains it but cripes. That’s good scratch for sitting in meetings all day and continually telling auditors how much they suck at their jobs.
The whole subject came up in the article because Schape and Co. are trying to find a permanent chairman to replace interim chair Dan Goelzer and two retiring board members.
The lead horse is Kurt Schact, the managing director of the CFA Institute’s Centre for Financial Market Integrity. Mr. Schact has a JD and BS in chemistry from the University of Wisconsin. Candidates for the two soon-to-be vacated board seats include one CPA, Helen Munter (Deloitte) and two former SEC attorneys, Linda Griggs and John Sturc.
Does anyone see a problem here? Does anyone think for one minute, that the PCAOB will be better off with fewer auditors guiding the ship? There must not be a single qualified auditor in the entire universe that could possibly want to chair the PCAOB. Thankless job to be sure but at least the money is decent.
Anyway, the good news is that arguments for Free Enterprise Fund v. PCAOB will be heard at the SCOTUS next week. Maybe we’ll all get lucky and this appointment crap will become meaningless.
SEC Said to Consider CFA’s Schacht to Lead U.S. Auditor Board [Bloomberg]
See also: CFA Institute’s Schacht May Chair PCAOB [Web CPA]