The Associated Press.....Texas Financier R. Allen Stanford
The Securities and Exchange Commission fraud case against Goldman Sachs may be settled before it ever sees a courtroom. Yet intentionally or not, the SEC has already secured at least one victory in the court of media opinion.
Last Friday, the same day that the government unexpectedly announced its Goldman lawsuit, the SEC's inspector general released his exhaustive, 151-page report on the agency's failure to investigate alleged fraudster R. Allen Stanford. Mr. Stanford was indicted last June for operating a Ponzi scheme that bilked investors out of $8 billion. He has pleaded not guilty.
Guess which of these two stories was pushed to the back pages? The SEC did its part by publishing the Stanford report so deep in its Web site that more than a few of our readers had trouble finding it. Yesterday, the SEC management's response to the report was available on the agency's homepage, yet it provided no links to the report itself.
Little wonder. The report is damning for an SEC that wants the public to believe it has turned the corner after the Bernie Madoff disaster. The commission has made young Fabrice Tourre of Goldman Sachs a household name for his debatable disclosures to institutional investors. But many individual investors will be more interested in learning the story of Spencer Barasch. He's the SEC enforcement official who sat on various referrals to investigate Allen Stanford AND THEN, AFTER LEAVING THE SEC, PERFORMED LEGAL WORK FOR....ALLEN STANFORD.
In its own way, the Stanford calamity is arguably worse than the SEC's Madoff bungle. In the Madoff case, passionate outsider Harry Markopolos could find no one at the SEC who took the time to understand the scam, cared enough and had enough authority to shut down the fraud. In the Stanford case, we see numerous SEC insiders over many years urging—at times begging—the enforcement staff to take action, to no avail.
The examination staff at the SEC's district office in Fort Worth, Texas reviewed the Stanford Group's operations in 1997, concluded that its sale of certificates of deposit likely constituted a Ponzi scheme, and referred the matter to SEC enforcement staff. Mr. Stanford kept on selling his seemingly too-good-to-be-true CDs, so SEC examiners investigated again in 1998, 2002 and 2004. Each time, they concluded that the Stanford operation was a probable Ponzi scheme and urged SEC action. Each time, the enforcement staff failed to act.
Along the way, SEC enforcers also ignored warnings from the daughter of an elderly investor in the Stanford scheme, the Texas State Securities Board, an anonymous insider in the Stanford operation, and U.S. Customs, which suspected that the Stanford organization was laundering money. The SEC at times would open preliminary investigations. When the Stanford Group declined to provide information, the inquiry would end.
Particularly tragic is that almost all of the $8 billion that Mr. Stanford collected from investors was gathered after the SEC's first round of inquiries, so if SEC enforcers had acted on the first referral from their colleagues, this alleged fraud would be measured in millions of dollars, not billions. Later, some investors increased their investments with Stanford Group after they learned that the SEC had investigated in 2005 and took no action. They viewed it as a clean bill of health.
In the wake of its Goldman lawsuit, the SEC is being hailed for returning to a "tough" enforcement line, but this is deceiving. The contrast between the SEC inspector general's report on Stanford and the zeal of the SEC's pursuit of Goldman Sachs is far more revealing about why the agency fails to stop genuine fraudsters.
While taking testimony and conducting interviews with dozens of agency staffers on Stanford, SEC IG David Kotz asked the enforcement staff how it could possibly have failed to prosecute someone who was believed by so many others to be running a fraud. The staff told him that senior SEC management did not favor the pursuit of Ponzi schemes and other frauds that were difficult to investigate and time-consuming to prosecute. He was also told that management favored "quick hits" and "Wall Street" cases.
This makes perfect sense when you think about the political incentives. Why do the painstaking work of tracking down actual criminals when you can score favorable headlines with a drive-by lawsuit against a large public company that will have a strong incentive to settle quickly?
In other words, the SEC is a dreadful failure in fulfilling its core mission of protecting individual investors, as the Stanford and Madoff cases show. But the SEC is very good at nailing politically correct targets like Goldman years after the fact on charges that have little or nothing to do with the investing public. On the Goldman case, by the way, the news broke yesterday that the SEC commissioners split 3-2 on whether to bring the lawsuit—a rare partisan split on such a prominent case and further evidence of its thin legal basis.
In the cases of Stanford and Madoff, thousands of small investors lost their life savings. In the case of Goldman, some masters of the financial universe lost money on what they knew was a calculated gamble. Which did more societal harm?
The SEC's Impeccable Timing
The Goldman suit helped to hide the IG report on the Stanford debacle.
THE WALL STREET JOURNAL
APRIL 20, 2010
BARRY SOETORO aka BARACK HUSSEIN OBAMA
He is not eligible to be
President of the United States
because he is not a Natural Born Citizen
as required by Article Two, Section One, Clause Five of the United States Constitution.
This is a fact REGARDLESS of
where he was born (Mombassa, Hawaii, Chicago, Mecca or Mars).
He is not eligible
because he was not born of
BOTH OF WHOM WERE UNITED STATES CITIZENS
AT THE TIME OF HIS BIRTH
as required by the Constitution.
Barack Hussein Obama Jr. is not eligible to be President of the United States because – according to public admissions made by him – his “birth status was governed” by the United Kingdom. Obama further admits he was a citizen of the United Kingdom and Colonies at birth.
Since Barack Hussein Obama Jr. was, if born in the state of Hawaii, a dual citizen, who – according to his own State Department – owed allegiance to the Queen of England and United Kingdom at the time of his birth – he cannot therefore be a “natural born” citizen of the US according to Article 2, Section 1, Clause 5 of the US Constitution.
His father, who did not live in the United States for more than a couple of years, was a subject/ciitizen
of Kenya/Great Britain at the time of Barack’s birth and afterwards, AND further, as Barack himself admitted on his website during the 2008 campaign, Barack was therefore born SUBJECT TO THE GOVERNANCE OF GREAT BRITAIN.
Here is a direct quote from Obama's "Fight the Smears/Fact Check" 2008 website:
‘When Barack Obama Jr. was born on Aug. 4,1961, in Honolulu, Kenya was a British colony, still part of the United Kingdom’s dwindling empire. As a Kenyan native, Barack Obama Sr. was a British subject whose citizenship status was governed by The British Nationality Act of 1948. That same act governed the status of Obama Sr.‘s children…’ “
The FACT that he was not born of TWO US CITIZEN PARENTS is all that matters. The question of his birth certificate is a distraction (a distraction fostered by Obama’s supporters?) that ought not to occupy our time and resources. BUT if you are really convinced of the value of the COLB (certificate of live birth) that Obama posted on his website, see this:
Also, it is possible that he is not a United States
citizen at all through his mother if he was born in Kenya, as three witnesses have testified. The reason is because his mother could not pass her US citizenship on to her son because she did not live continuously in the United States for five full years after her fourteenth birthday as required by the US immigration law in effect during that period of time.
Check it out:
Also, an excellent introductory primer on Obama Presiidential Eligibility is to be found at:
His usurpation can only be corrected (1) by Congress through his Impeachment and Removal [something which will never happen in a Congress controlled by Pelosi/Reid], or (2) it can be
corrected by his resignation, which could happen if the public presssure on him to resign becomes great enough, or (3) by his removal by the United States Supreme Court affirming a Quo Warranto decision of the United States Federal District Court for the District of Columbia [which process Attorney General Eric Holder would never allow to even begin] or (4) by an amendment to the Constitution,
which will never happen because that again would require the agreement of a Congress controlled by Pelosi/Reid.
HERE IS THE QUESTION WHICH EVERY AMERICAN CITIZEN SHOULD BE ASKING HIS OR HER CONGRESSMAN AND SENATORS
“During the 2008 election, then Senator Obama published a statement at his website which said that his birth status was ‘governed’ by the British Nationality Act of 1948. Can you please tell me, and the American people, how a person governed - at birth - by British law, can be a natural born citizen of the United States and thus constitutionally eligible to be President of the United States?”
If you really want to understand the difference between the technical terms natural born citizen, native born citizen, naturalized citizen and just plain citizen, go to:
And if you really want to understand why it is necessary for a man to be a natural born citizen of the United States in order to be President of the United States, read the essay by Leo Donofrio at:
- Leo Rugiens