Audit contributing editor Felix Salmon, writing this morning about Channel 4 reporter Krishnan Guru-Murthy’s tough questioning of Larry Summers, asked, “Has Summers ever been asked questions like this, on camera, by an American reporter?
It seems unlikely. Our interviewers tend to be less Guru-Murthy than Charlie Rose.
Rose has a new interview in Bloomberg BusinessWeek with the SEC’s head of enforcement, Robert Khuzami about the agency’s response to the financial crisis. Rose’s questions actually include one about whether Wall Street “played a big role in creating the financial crisis,” one that he allows Khuzami to dodge:
I don’t mean to duck the question, but at the end of the day we’re not about that. I saw a lot of the commentary back and forth after the case was filed, and folks of different political persuasions seemed to cite the case as evidence of support for their position. But we’re not about who caused it or didn’t. We have a narrower mission: Did they lie to investors in what they told to them about their subprime exposure?
Rose’s question on whether Wall Street banks helped cause the crisis, along with one asking “Why have there been so few suits against Wall Street CEOs?” are thrown out there without pointing out the elephant in the room: Khuzami was a top lawyer at one of the firms that caused the crisis before he came to the SEC.
He was Deutsche Bank’s top U.S. lawyer for five years during the bubble and “oversaw a group of lawyers at his old firm, Deutsche Bank AG, that was closely involved in developing collateralized debt obligations,” as The Wall Street Journal reported in 2010. The Journal also said this:
As part of that job, he worked with lawyers who advised on the CDOs issued by the German bank and how details about them should be disclosed to investors.
CDO production and sales are at the heart of the crisis and Deutsche was one of the biggest issuers of these toxic securities. Now he heads SEC enforcement. Hello?
This giant conflict of interest goes almost unmentioned by the press much of the time but it’s particularly egregious, if totally unsurprising, from Rose here. We in the States need much more of the nondeferential questioning of the powers that be that they get in Britain.
Perhaps BusinessWeek can give Rose’s column to Krishnan Guru-Murthy.
Further Reading:
Fraud Without Fraudsters; Fraud Without “Fraud.” The SEC’s settlement with JPMorgan Chase on a Magnetar deal
The SEC’s Khuzami and That Citigroup Settlement: An anonymous letter adds to questions about a wrist slap.
It'd be nice if someone would ask the SEC why the discrepancy in prosecutions:
http://blogs.reuters.com/bethany-mclean/2012/01/17/a-tale-of-two-sec-cases/
"Juries are sometimes told that in the eyes of the law, all Americans are created equal. But if that’s the case, then why does the Securities and Exchange Commission’s treatment of former top Fannie and Freddie executives seem to be so much harsher than its treatment of Citigroup and its senior people for what appear to be similar infractions?"
Not that I mind Freddy and Fannie executives being prosecuted when there's evidence that they broke the law, but why the focus on some evidence to the exclusion of much else?
unless you want to create the perception that the wrongdoing at freddy and fannie were all that mattered.
#1 Posted by Thimbles, CJR on Mon 30 Jan 2012 at 11:40 AM
Ryan writes: "We in the States need much more of the nondeferential questioning of the powers that be that they get in Britain."
padikiller responds: LOL!
Unless we're talking about Solyndra of course.. When it comes to Solyndra, we need to make sure that the press doesn't put too much heat on the Gubmint's doling out of "capital" (translation - "money borrowed from taxpayers to slide to "green energy" boondoggles funded by Dem donors).
"Venture capitalists give startups capital in the unlikely hope that their companies will turn into the Next Big Thing. For every Google that makes it megabig, there are hundreds of companies that lose their investors’ money or muddle along. More than half of the firms backed by venture capital go bust and investors lose their money.
One firm going bust doesn’t mean that the program is a failure. Indeed, firms going bust was baked into the cake here: DOE knew from the beginning that some of the firms it funded would go bust. That’s the nature of what it’s doing."
"Then there’s the idea that the failure of one company proves that the government can’t allocate capital—as if every place it puts money goes bust.
Yeah... Nothing "deferential" to the Gubmint in the "reporting" here in Chittumland, is there?
Oh... or MF Global of course... When it comes to coverage of MF Global, we need "cautious, hedged" coverage to make sure that readers understand that "this kind of thing isn't illegal".. Don't want to blame anyone for THAT measly $1.2 billion, after all.. Hey, you win some, you lose some, right?
Now, on the other hand... If some disgruntled, fired, ex-employee who's locked in the middle of litigation against a former "Wall Street" employer, issues a press release with the uncorroborated claim that some unnamed person in some unspecified position with the "Wall Street" company made some unpleasant or inappropriate comment at some unspecified place and at some unspecified time - and if this unattributed comment can possibly be construed to cast the "Wall Street" employer in a bad light -- well then Hell..
Time to spin up the turbines on the Chittum 5000 Black Helicopters and drive them into Full Whisper Mode to aid the witch hunt that "should" be initiated on the basis of this rock-solid evidence!
These CJR "watchdogs" (who can no longer be called "commies" under Pravda's... er, I mean CJR's new comment censorship policy) are nothing but Gubmint lapdogs...
#2 Posted by padikiller, CJR on Mon 30 Jan 2012 at 04:02 PM