The housing bubble popped five years ago. The securitization market went haywire four years ago, shortly after the derivatives market started going crazy. Bear Stearns, choking on toxic CDOs, went down three years ago.
Today, March 4, 2011, we get this headline from Bloomberg:
CDO, CDS Fraud Probes to Be 2011 Priority, Prosecutor Says
This is great and all. But what have these guys been doing for the last five years besides prosecuting high-end prostitution services (sorry, I just watched Client-9, and you should too).
Here’s the lede:
U.S. criminal investigators will step up probes into possible fraud involving collateralized debt obligations and credit default swaps, a top federal prosecutor in New York said.
Christopher Garcia, chief of the Securities and Commodities Fraud Task Force in the U.S. Attorney’s Office in Manhattan, told white-collar criminal-defense lawyers at a conference today that his office will spend this year investigating possible fraud involving CDOs and CDSs.
Hey, what’s the statute of limitations on securities fraud, anyway?
Clock’s ticking, Mr. Garcia.
And it’s ticking for everybody else, too. Boy, you look up and it’s already been four years this spring since the toxic securities markets dried up on Wall Street.
I’m no lawyer, obviously. Am I right that we’ve only got about one more year until everybody on Wall Street will be home free for good?
UPDATE: No, I was not right on that last question. Thanks to Padikiller for pointing out in comments that the five year statute of limitations is for civil cases. Criminal securities fraud has a ten-year limit.
But Mr. Garcia is with the SEC, which only prosecutes civil cases. The Department of Justice has shown little interest in prosecuting this stuff, with one notable exception and failure. So if Garcia wants to actually get money from anybody, he’d better get on the ball.
UPDATE: The first rule of corrections is: Don’t be stupid and have to correct your correction.
I just broke that one. Padikiller again points out that I’m wrong about Mr. Garcia. He is with the Securities and Commodities Fraud Task Force of the U.S. Attorney’s Office in Manhattan, not the SEC. So, the clock isn’t ticking on Garcia.
Apologies for the boneheaded mistakes.
Surely the statute of limitations could be extended.
Not that it would pass - but it would be fun to see Wall Street's allies howl in protest.
#1 Posted by murph, CJR on Fri 4 Mar 2011 at 07:00 PM
This is par du course for the SEC to slow walk investigations until they eventually get done, to pacify petitioners, but done after the point of doing them has expired. As Taibbi put it in his "No one is going to jail" piece:
http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?page=3
"Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive — not handcuff the guy or impound his yacht, mind you, just talk to him. In the course of doing so, he finds out that his target's firm is being represented not only by Eliot Spitzer's former top aide, but by the former U.S. attorney overseeing Wall Street, who is going four levels over his head to speak directly to the chief of the SEC's enforcement division — not Aguirre's boss, but his boss's boss's boss's boss. Mack himself, meanwhile, was being represented by Gary Lynch, a former SEC director of enforcement.
Aguirre didn't stand a chance. A month after he complained to his supervisors that he was being blocked from interviewing Mack, he was summarily fired, without notice. The case against Mack was immediately dropped: all depositions canceled, no further subpoenas issued. "It all happened so fast, I needed a seat belt," recalls Aguirre, who had just received a stellar performance review from his bosses. The SEC eventually paid Aguirre a settlement of $755,000 for wrongful dismissal.
Rather than going after Mack, the SEC started looking for someone else to blame for tipping off Samberg. (It was, Aguirre quips, "O.J.'s search for the real killers.") It wasn't until a year later that the agency finally got around to interviewing Mack, who denied any wrongdoing. The four-hour deposition took place on August 1st, 2006 — just days after the five-year statute of limitations on insider trading had expired in the case.
"At best, the picture shows extraordinarily lax enforcement by the SEC," Senate investigators would later conclude. "At worse, the picture is colored with overtones of a possible cover-up.""
I'd be nice if, as a part of Financial Reform, these cheesy short statute of limitations periods were tripled to match other crimes which are much less complicated to prosecute.
#2 Posted by Thimbles, CJR on Fri 4 Mar 2011 at 10:30 PM
In the colossal cluster fk that banking has become, where does one place the blame? The banking industry itself had contributed over $10 BILLION over the last decade on "contributions" to both parties, as to continuously disband and repeal all meaningfull and structurally important regulation.
Conspiracy to commit fraud, strict liability for failed financial products and instruments, wire fraud and obstruction of justice, RICO - all come to mind.
At http://www.WallStreetClassAction.com we organize a class action against the banks, the ratings agencies and other financial institutions involved in staging the colossal securitization fraud and subsequently crashing the economy and resulting in over $5 Trillion in asset losses in the US alone.
We realize that our own government is effectively a captured entity, so no criminal indictments will be forthcoming. But WE THE PEOPLE will hold the fraudsters accountable.
Sign up on our site, we already have more than 3,000 users within last 2 days. UNITED WE STAND
www.WallStreetClassAction.com
#3 Posted by Wall Street Class Action, CJR on Mon 7 Mar 2011 at 09:14 AM
I mean, why bring Eliot Spitzer's name into this -- "...being represented not only by Eliot Spitzer's former top aide..." Is that supposed to lend deep dark scandal and titillation to or something? Seems like he's a couple of layers removed here. Or are you implying that Spitzer somehow has a hand in the delay? I don't get that kind of innuendo. It sounds conspiracy-theoristish to me.
#4 Posted by James, CJR on Mon 7 Mar 2011 at 09:55 AM
Ryan has his facts wrong (as usual).
Now look what he's done! He has Thimbles wetting his britches for nothing.
Ryan (mis)cites the federal statute of limitations (18 U.S.C 1658) for PRIVATE CIVIL fraud actions, which is 5 years.
However, the federal statute of limitation (18 U.S.C. 3293) for CRIMINAL PROSECUTION in bank fraud cases is 10 years.
“No person shall be prosecuted, tried, or punished for a violation of, or a conspiracy to violate – (1) Section 215, 656, 657, 1005, 1006, 1007, 1014, 1033, or 1344; (2) Section 1341 or 1343 [mail and wire fraud], if the offense affects a financial institution; or (3) Section 1963 [(RICO) racketeer influenced and corrupt organizations], to the extent that the racketeering activity involves a violation of Section 1344 [bank fraud] – unless the indictment is returned or the information is filed within 10 years after the commission of the offense,” 18 U.S.C. 3293
But hey... Why let the mere facts get in the way of another CJR, "black helicopter", anti-capitalist fairy tale, right?
#5 Posted by padikiler, CJR on Mon 7 Mar 2011 at 12:38 PM
Thanks padikiller. You're right that the criminal state of limitations for financial fraud is ten years. I've dodged the black helicopters and updated the post.
#6 Posted by Ryan Chittum, CJR on Mon 7 Mar 2011 at 03:19 PM
Ryan digs himself a deeper hole: "But Mr. Garcia is with the SEC, which only prosecutes civil cases. The Department of Justice has shown little interest in prosecuting this stuff, with one notable exception and failure."
padikiller tolls the Reality Bell: B U L L S H I T
Christopher L. Garcia is, in fact, an Assistant U.S. Attorney employed by the U.S. Department of Justiceas its Chief of the Securities and Commodities Fraud Task Force
http://www.justice.gov/usao/nys/pressreleases/March10/criminaldivisionappointmentspr.pdf
He is not now, nor was he ever, employed by the SEC.
FUTHERMORE, Ryan... If you are going to make the ridiculous claim that "Wall Street" is "running out the clock" based on the statute of limitations... You owe it to the readers to explain that these statutes do not apply to equitable claims, like injunctions or disgorgement of fraudulently obtained funds. You also need to inform your readers that the statutes of limitations are tolled in many other circumstances - meaning that civil actions can still be brought in many cases more than five years after the fraud occurs.
But hey! Why let mere factual background cloud up this anti-capitalist wet dream anymore than it already has, right?
For Pete's sake!.. You guys will do ANYTHING to keep the commie nonsense alive, won't you?
Do you understand the importance of your job, Ryan? Do you get it? Do you feel any need to approach your reporting objectively?
It certainly doesn't appear that you do. You seem to have given up misrepresentation for sheer fabrication.
#7 Posted by padikiller, CJR on Mon 7 Mar 2011 at 06:45 PM
Ayyyyy,
You're right again, padikiller. That's a boneheaded mistake on my part. I'll fix this now. Thanks for catching meon this. Duly embarrassed.
#8 Posted by Ryan Chittum, CJR on Mon 7 Mar 2011 at 08:34 PM
Why is paddy a) defending the inaction of the SEC when before he was criticizing the government for being unable to enforce its own rules?
http://www.cjr.org/the_audit/cnbc_pushes_the_financial-terr.php#comments
b) why is he labeling one's desire to prosecute fraud, like Goldman's selling of securities to customers which they called crap in internal emails, as commie nonsense?
c) why is he being such a jerk about it?
Yes, there is the possibility of prosecuting these cases criminally, but not if the under staffed and under equipped SEC does not prepare a rock solid case to hand over to the FBI and the Justice Department. And recovery of funds is not an option for fraud victims after five years, the liability for which being much easier to establish in civil cases.
According to this:
http://www.washingtonpost.com/wp-dyn/content/article/2010/04/30/AR2010043001336_2.html
Wallstreet has to be feeling very confident it can get away with the whole mess by virtue of having too many cases of fraud for the understaffed SEC and FBI to tackle within a 5 year time frame, and the bar for criminal prosecutions set too high for the gun shy enforcers to risk more high profile failures. The evidence is there, but its highly technical evidence involving complex instruments which have to be communicated to a jury lacking the expertise to evaluate guilt based upon it. Criminal trials take a long time to get through and wont have the civil prosecutional evidence to use as background. More in a bit
#9 Posted by Thimbles, CJR on Mon 7 Mar 2011 at 09:06 PM
This section in particular
http://en.wikipedia.org/wiki/SEC_Rule_10b-5
is both essential for sanctioning criminal and fraudulent behavior, recovering loses as a result of that behavior, and is easier to establish and - after which - refer to the justice department for further investigation.
And it has a 5 year statute of limitations.
The whole government response to this fraud epidemic has been underwhelming:
http://www.huffingtonpost.com/william-k-black/the-role-of-the-criminal_b_802115.html
#10 Posted by Thimbles, CJR on Mon 7 Mar 2011 at 09:18 PM
If only this mess were a "mistake" Ryan, all would be good and forgivable.
The REALITY is that there is an anti-capitalist/liberal/commie drive in your head that guides you to deliberately and maliciously fabricate nonsense and present it as fact to your readers.
In this case, you committed the following acts of journalistic malpractice:
1. You took the undeniable REALITY (cast in the light most favorable to your obvious anti-capitalist prejudice) - namely that the federal government MAY be dragging its feet in prosecuting fraud claims related to the financial meltdown - and turned it on its head into an anti-capitalist "Wall Street is Running Out the Clock" story. You attempted to shift the blame from the get go - from the inefficient and moribund government regulators asleep at the switch to the unnamed "Wall Street" bad actors who have some sort of unspecified control of the SEC. The plain REALITY (there's that inconvenient word again) is that "Wall Street" has no power over government regulators. But damn the truth, as far as you're concerned. It ain't the government's fault, it's all "Wall Street's" fault. You lede says so.
2. Despite your concession that you are "no lawyer" (given as an afterthought, after your unfounded accusations), you engaged in a detailed (and misguided) legal analysis of the application and ramifications of a specific law, and presented your readers with a conclusion regarding this irrelevant law that is not only false, but is indeed politically or ideologically motivated. This is inexcusable. PERIOD.
3. When confronted with incontrovertible evidence of your malfeasance, you fabricated libel, sliming a public official to salvage your story and impugning his integrity in the process, rather than simply coming clean and admitting that the premise of your story was a concoction of your own prejudice.
Dude.. This isn't cool...
If you want to bear the mantle of a "professional journalist".... You need to walk the walk... Not just talk the talk.
Do your damned job, or get a job slinging cheeseburgers at your local TGIY Friday's.
#11 Posted by padikiller, CJR on Mon 7 Mar 2011 at 09:52 PM
Thimbles:
You can huff... You can puff..
But you can't change the Reality here.
Ryan's article was premised upon (and linked to) a CIVIL statute of limitations that is inapplicable to criminal prosecutions....
Ryan fabricated a claim that particular person was employed by the SEC when that person was never (in actual FACT) so employed...
That's just how it is there, Thimbles.
It's the (conceded) REALITY.
Deal with it. Dance around it. Ignore it. Deny it. Whatever.
It isn't going anywhere.
#12 Posted by padikiller, CJR on Mon 7 Mar 2011 at 10:07 PM
"I mean, why bring Eliot Spitzer's name into this -- "...being represented not only by Eliot Spitzer's former top aide..." Is that supposed to lend deep dark scandal and titillation to or something? Seems like he's a couple of layers removed here. Or are you implying that Spitzer somehow has a hand in the delay? "
Missed you there James. You were hiding.
Taibbi wrote the shpeil above and he's an admirer of Spitzer's regulatory chops, so what I think he's getting at is not the involvement of Spitzer, but that "Aguirre was contacted by the bank's regulatory liaison, Eric Dinallo, a former top aide to Eliot Spitzer". This establishes that the bank has good connections, that it hires former regulators to work with regulators, and that those regulators know that the deals offered to former regulators are open to them if they smooth the waters instead of stir them up.
#13 Posted by Thimbles, CJR on Mon 7 Mar 2011 at 10:09 PM
What Ryan got wrong was that Garcia was working for the SEC and that the criminal prosecutions had a statute of limitations of 5 years not ten.
Not fabricated, got wrong. It happens. To you, it happens a lot so try not to be so puffed up about it.
What isn't wrong is that there is a 5 year statute of limitations on civil cases and that the SEC is slowly getting around to looking at it, as are all the regulatory agencies.
From above:
http://www.huffingtonpost.com/william-k-black/the-role-of-the-criminal_b_802115.html
"Financial regulators are essential to prevent this kind of error by senior prosecutors. The regulators have to serve as the Sherpas for the criminal justice system to succeed against epidemics of control fraud. The FBI cannot have hundreds of agents expert in many hundreds of industries. The regulators have to do the heavy investigative lifting. They have the expertise and greater staff resources. The regulators also have to serve as the guides. Their criminal referrals have to provide the roadmaps that allow the FBI to conduct successful investigations. The regulators played this role successfully at key times during the S&L debacle, filing thousands of criminal referrals that led to over 1000 priority felony convictions. During the current crisis the OCC and the OTS - combined - made zero criminal referrals. None of the federal regulatory agencies appear to have enforced the regulatory mandate that federally insured depositories file criminal referrals - and noncompliance with that requirement was and is the norm. There is no indication that the FBI has demanded that the regulators enforce their rules.
Absent guidance and support from the regulators, the FBI turned to the worst conceivable source of guidance and support - the trade association of the "perps" -- the Mortgage Bankers Association (MBA). The MBA, predictably, defined its members as the victims of mortgage fraud. The MBA invented a nonsensical definition of mortgage fraud which made accounting control fraud impossible. All fraud supposedly fell into one of two categories: "fraud for housing" or "fraud for profit." The MBA members are, in fact, victims of accounting control fraud. The mortgage banks, however, do not set MBA policy. The CEOs of the mortgage banks determine MBA policy and they are not about to tell the FBI that they are the primary source of the epidemic of mortgage fraud. Similarly, they are not about to make criminal referrals, which might cause the FBI to investigate why some lenders made loans that were overwhelmingly fraudulent. MBA members virtually never made criminal referrals even though they made millions of fraudulent loans. Why don't the victims make criminal referrals and help the FBI protect them from the frauds?"
The regulators are waiting out the clock and the FBI and criminal investigators are relying on experts from the industry to supply the details of their criminality.
If the SEC was pushing cases through like they had some urgency, then the probability of criminal prosecution would be greatly increased as deals would get made with lower tier traders to provide evidence against upper tier ones. Furthermore, " Bringing many hundreds of enforcement actions, civil suits, and prosecutions causes huge changes in the way a crisis is perceived. It makes tens of thousands of documents detailing the frauds public. It generates thousands of national and local news stories discussing the nature of the frauds and how wealthy the senior officers became through the frauds. All of this increases the saliency of fraud and increases demands for serious reforms, adequate resources for the regulators and criminal justice bodies, and makes clear that elite fraud poses a severe danger. Collectively, this creates the political space for real reform, vigorous regulators, a
#14 Posted by Thimbles, CJR on Mon 7 Mar 2011 at 10:40 PM
Oh, I see what you were getting at now. Thanks for the clarification, Thimbles.
#15 Posted by James, CJR on Mon 7 Mar 2011 at 10:46 PM
Padi,
Now you're just trolling. I didn't fabricate anything. I didn't libel anyone. I made two fact errors--and fixed them as soon as I saw you pointed them out. Thanks.
And if it's anti-capitalist to be hard on Wall Street, then a lot of (non-Wall Street) businessmen out there are downright Marxists. Hell, even folks I know on Wall Street are hard on Wall Street.
#16 Posted by Ryan Chittum, CJR on Mon 7 Mar 2011 at 10:53 PM
The Spitzer thing is diversion.
The simple REALITY is that:
1. The SEC is screwing up... (as it must do, being a governmental regulatory agency) Government agencies ALWAYS screw up, relative to private enterprise. (CAVEAT - As I always have, I will concede, as our Founders did, that a limited, inefficient government role is necessary in specific and narrowly defined areas).
2. The federal government (despite being insanely and overly staffed with overpaid people who should be, but aren't, prosecuting crimes in the financial sector) isn't doing a damned thing to prosecute the plain commission of crime.
3. The answer to our societal problem, according to people line Thimbles, is to expand the role of government. According to these people, the problem is that that government regulatory agencies are "understaffed" and "underequipped" Translation? Throw more money at a dysfunctional system and it will fix everything. Evidence of this contention? None.
#17 Posted by padikiler, CJR on Mon 7 Mar 2011 at 10:55 PM
Ryan wrote: "I didn't fabricate anything. I didn't libel anyone. I made two fact errors"
padikiller responds: OK, Ryan... Then give us the source of your (false) claim that Christopher L. Garcia worked for the SEC.
There are only two possibilities here, Ryan...
One... You came across bad information and regurgitated this false information here that Mr. Garcia works for the SEC... Or..
Two... You fabricated this false claim in response to my criticism...
Which is it?
If you are claiming that you didn't fabricate the claim that Christoper L. Garcia is (or once was) employed by the SEC, then explain to your readers EXACTLY how you (erroneously) came to the (false) conclusion that he was engaged in some nefarious plan to stonewall justice at the behest of "Wall Street". This explanation will necessarily requite the exposition of the sources of your (admittedly false) information.
Let's see it, Ryan. Of course you can't provide a single shred of evidence that anyone other than yourself fabricated the (maliciously false) claim that Mr. Garcia was employed by the SEC. This little bit of politically-motivate fiction was product of your own mind - a knee-jerk reaction to the unanticipated exposure to REALITY that I shone upon the nonsense you posted here. A typical liberal adverse reaction to a Reality Infusion.
You need to Cowboy Up, Ryan. You've been busted (twice, so far) in the fabrication department.. Let it go.
Admit your failings, and repent... Commit to actually practice "real journalism" and go with it. Dealing with facts (instead of fabricating them) and presenting all sides of controversial issues is the way to go!
Pal.. The Emperor has no clothes. You need to deal with the REALITY here. You made this whole thing up. PERIOD.
#18 Posted by padikiller, CJR on Mon 7 Mar 2011 at 11:25 PM
"The federal government (despite being insanely and overly staffed with overpaid people who should be, but aren't, prosecuting crimes in the financial sector) isn't doing a damned thing to prosecute the plain commission of crime."
That's because the federal government and the financial sector are aligned, not opposed. This is because the second a guy from a regulatory agency isn't aligned, he's rooted out as a commie anti-capitalist and tossed to the streets for someone who will play nice. Ideologically and financially, the finance industry is too big.
Which brings us to the opposition:
Underequiped and understaffed:
http://www.cjr.org/the_audit/press_buries_the_gaos_damning.php
http://www.cjr.org/the_audit/mcclatchy_takes_on_the_secs_to.php
#19 Posted by Thimbles, CJR on Mon 7 Mar 2011 at 11:34 PM
and desperate for "green" pastures
http://www.cjr.org/the_audit/ft_buries_the_lede_on_exsec_of.php
#20 Posted by Thimbles, CJR on Mon 7 Mar 2011 at 11:37 PM
Thimbles wrote: "This is because the second a guy from a regulatory agency isn't aligned [with "Wall Street"], he's rooted out as a commie anti-capitalist and tossed to the streets for someone who will play nice."
padikiller responds: OK Thimbles... The SEC has nearly 4000 employees,,,,
Give us the names of 40 of them (1 percent of the workforce) who have been "tossed to the streets" because of a refusal to be "aligned with "Wall Street".
Can't do it?
Come up with the names of 20 people... (Half a percent)
How about 4 people (a tenth of a percent)?
You are full of crapola here.
Nice try,,. No cigar.
#21 Posted by padikiller, CJR on Mon 7 Mar 2011 at 11:50 PM
The false claim that Christopher L. Garcia worked for the SEC is undeniably a fabrication - it certainly didn't fabricate itself, nor was it engendered through any means other than articificially.
Thus, there are two, and only two, possibilities here.
Some human being other than Ryan fabricated the false claim that Christopher L. Garcia works for the SEC filing civil cases, and Ryan repeated this false claim... or.....
Ryan fabricated this false claim himself.
As to the root of this fabrication, assuming, as it appears, that Ryan fabricated it, then the questions are how and why did it happen?
The lede Ryan quoted made it clear that Garcia works as a U.S. Attorney. Is it possible that a former WSJ reporter (like Ryan) can come to the patently false conclusion that U.S. Attorneys work for the SEC? Not likely. At least I hope not - understanding the distinction between criminal prosecutors and civil regulators is a rather fundamental competency for anyone charged with reporting on the enforcement of financial regulation.
Given the timing, it appears more likely that, when confronted with evidence of his sloppiness, Ryan has a tendency to make things up instead of coming clean.
This story was yellow journalism from the beginning. The only fact presented was that DoJ is cracking down on fraud. From this one fact, Ryan twisted the story into a fairy tale of corporate greed and impunity, jumping to a false conclusion about the wrong statute without providing the necessary background on the complexities of statutes of limitations and the myriad exceptions to them.
Where are the editors at CJR? Somebody needs to ride herd on these "watchdogs".
#22 Posted by padikiller, CJR on Tue 8 Mar 2011 at 08:01 AM
Padi,
This is where I warn you to quit the trolling.
#23 Posted by Ryan Chittum, CJR on Tue 8 Mar 2011 at 11:16 AM
Ryan...
Define "trolling".
Does it mean "writing things you don't like to read"?
Does it mean "criticizing anyone at CJR"?
Does it mean "responding to comments of others in way that is critical of the reporting at CJR"?
And what is with this "warning" of yours? Is this some sort of a threat? If so, of what, exactly?
Is this Pravda, circa 1963, or CJR? Or is there a difference?....
#24 Posted by padikiller, CJR on Tue 8 Mar 2011 at 11:36 AM
I think you know what trolling is. You're accusing me of "fabricating" things and "has a tendency to make things up instead of coming clean" --lying-- about two fact errors, one made in the process of "coming clean" about the first!
We welcome criticism here--that's what we do. But if you keep libeling on here I'll ban you. That's the warning.
#25 Posted by Ryan Chittum, CJR on Tue 8 Mar 2011 at 11:51 AM
Ryan...
You're awfully thin-skinned here.
Nobody is accusing anyone of lying.
However, SOMEBODY made up the false claim that Christopher Garcia prosecutes civil cases for the SEC. If it wasn't you, then who was it? It didn't make itself up.
It doesn't take an intent to lie to make a false claim - it can be simple (or gross) negligence.
But your "errors" all seem to swing toward the liberal/progressive/anti-capitalist side of the balance. THIS is the problem as I see it. Your article began with enough of a stretch - that "Wall Street" is somehow "running out the clock" on government regulators - and both of your errors (including the false claim) were rendered in support of this contention.
Everybody makes mistakes, but a "professional journalist" should be splitting these factual mistakes both ways - and I would argue that a columnist making an argument or pitching a position should go the other way - professionalism demands that anyone who sets out to make an argument (and is thus guided by his own ideology) give more care to those statements that support his contention than would normally be given in merely factual reporting.
#26 Posted by padikiller, CJR on Tue 8 Mar 2011 at 03:21 PM
Man paddy, bad sport. U mad about your pet politifact story shot down? Still?
http://www.cjr.org/the_audit/politifact_shows_a_fox_host_is.php
Lame. Errors happen, they get corrected, people move on. It's not like the correction is buried either, like it was in your $85,000 error link previous. How does one go from "Ha Ha! Your a conspiracy theorist! Ha Ha! Black helicopters..OOOOOooooo!" to "Chittim is a member of the liberal cabal attempting to overthrow the capitalist system and now he is fabricating QUOTES to mae his case. I saw George Soros disembark from Ryan's padded office in Victor Navasky's black helicopter! HE had a file marked GARCIA under his shoulder! Beware. The communist lies, they SLITHER FORTH!"
Occam's razor dude. Once again, you've failed to use it.
#27 Posted by Thimbles, CJR on Tue 8 Mar 2011 at 06:00 PM
@Thimbles -- I have never accused Ryan of fabricating quotes.
I wrote that he fabricated the claim that a particular person worked on civil cases for the SEC in order to salvage the theme of his article.
Now there is no question that this claim was fabricated - the particular person in fact never worked for the SEC a day in his life. The questions are HOW did it get fabricated and WHY did it get fabricated?
I never claimed that this fabrication was the result of any intent to deceive. I have no doubt that Ryan honestly believed this person worked for the SEC when posted the claim. However, the intent doesn't matter much to the reader who gets false information. One man has his arm chopped off by a vicious thug... Another in a simple car accident. The intent of the perpetrator or the negligent driver doesn't really matter much to either of these guys who are minus an arm.
The elephant in the room here isn't the fact that Ryan screwed up and relied on the wrong information in his argument... anyone could have done it. I've done it.
It's bigger than that. It's systematic. It's the fact that he took a headline about an announcement from DOJ cracking down on fraud (so they claim, anyway - I'm with Ryan in my underwhelming anticipation that anything will come of it) and constructed an argument to suit his own anti-Wall Street agenda using fallacious reasoning and false information. If you're going to make a political argument, you should be held to an even higher standard than if you're just reporting balls and strikes.
And if you're going to base a Wall Street-bashing argument on the application of statutes of limitations - you owe it to the readers to provide the background and to at least acknowledge opposing views. What do these statutes mean? What is their effect? Are there ways around them? Clearly that didn't happen here.
And once Ryan's mistake had been pointed out we come to the next, and by far the biggest, problem in his second "update" - it isn't the fact that Ryan (honestly) made up a claim that the person involved worked civil cases for the SEC - this mistake is a false conclusion that resulted from mere oversight or sloppiness (again, something we all are guilty of occasionally) - it is instead the fact that he strove to defend his original position at all in the first place, instead of reconsidering his premise given the fact that the corrected information blew his original thesis out of the water.
When the facts break bad, it's time to reevaluate. Doctors do it all the time. So do lawyers. So do engineers. If journalists want to be "professionals", they need to do it, too. This process obviously didn't happen here, and it still hasn't happened. Instead, Ryan, like many of colleagues, respond with a "circle the wagons" mentality. They are loathe to explain the nature of their mistakes and resent having them laid bare in public. Witness the present, where Ryan threatens to ban a critic for "libel" instead of addressing the nature of his mistake in detail. I can see ignoring the critic. I can see arguing with the critic. I can't see censoring the critic.
And this is plain journalistic malpractice. A disservice to the readers and to the profession.
PERIOD
#28 Posted by padikiller, CJR on Tue 8 Mar 2011 at 07:10 PM
Padi,
fab·ri·cate/ˈfabriˌkāt/Verb
1. Invent or concoct (something), typically with deceitful intent.
"make things up" implies intentional deceit, too.
And by the way, my last correction was to a post last week where I said wrongly that Gen Xers couldn't get Social Security when they're 62. James, a liberal, was not too happy about that one.
#29 Posted by Ryan Chittum, CJR on Tue 8 Mar 2011 at 08:59 PM
I'm no liberal, @Ryan. Don't throw me in front of the loonies to fend off the liberal bias, please.
In fact, I believe I was very respectful in requesting a correction. What difference does it make what my politics are?
Not meaning to pile on.
#30 Posted by James, CJR on Tue 8 Mar 2011 at 09:36 PM
Damn. ...fend off the accusations of liberal bias....
#31 Posted by James, CJR on Tue 8 Mar 2011 at 09:39 PM
Ryan...
What do you want me to say instead of "fabrication"?
"Ryan negligently published a falsity through accidental means in order to defend his ideological position after his error was exposed"?
"Ryan inadvertently jumped to a false conclusion and mistakenly and unintentionally published a "boo-boo" after a mean, nasty right-wing Teabagger guy pointed out that the premise of his story was shot to Hell"?
Will either of these restatements of the reality assuage your indignation or make you feel better? If so, go with it.
You're toying with semantics and dodging the crux of the matter.
The problem here isn't that you screwed up on the facts.
The problem here is the WAY you screwed up on the facts. You set out to write another anti-"Wall Street" screed, and you went fishing for anything you could find to substantiate your thesis. This is just the Reality. Trouble is, you got busted by me and now you are quibbling over dictionary definitions to avoid dealing with the fact that your premise is controverted by the facts. If it gets you through the night, you can choose any adjectives, adverbs or nouns you want that accurately describe what really happened - namely that you (negligently and unintentionally) gave your readers a bunch of bullshit to defend your nonsensical position.
Your bias is plain and undeniable. You own it. I have my own biases, so I don't begrudge you yours. You've made it clear to your readers that you pin the financial meltdown on "Wall Street" (instead of the government or the citizens of this country). I disagree, but so what?
However, you can't have it both ways, Dude... You can't be a "professional journalist" and simultaneously be the next greatest leftist visionary. You can be both, without question.. But NOT simultaneously. When you punch the clock in the journalism business, you either need to leave your ideology at the door to report the facts or be straightforward with your readers and cognizant of any prejudice your own bias may engender as you argue a position.
#32 Posted by padikiller, CJR on Tue 8 Mar 2011 at 09:41 PM
Or how about this explanation: Ryan has a family and lots of other distractions in his life, sees a story about a guy at the Security and Commodities Fraud Commission, remembers that the statue of limitations on securities fraud is 5 years, and publishes a blog before taking out the garbage.
He comes back, finds out "OMG I screwed up on criminal versus civil" and makes a correction, qualifying it with a reference to Garcia's job at the Security Commission whatnot, and then hangs up the laundry.
Comes back, realizes "OMG, Garcia works for the DOJ. Ah Cripes.", graciously thanks you despite your rude attitude, and continues on with his work.
Now, if this were a published article in the NYtimes, then maybe an editor would have checked and caught every fallacy before it got published, but this is a blog. If it were a published article, we would have to wait a week between posts. Since it's a blog, we get it now - faults and all - and correct it on the go. It happens, not on purpose, but due to the frequency of updates despite other pressures on one's time.
And at least it doesn't happen on purpose, like in the crap you defend from O'keefe and Breitbart. Pretty scuzzy approach padi.
#33 Posted by Thimbles, CJR on Tue 8 Mar 2011 at 10:20 PM
Thimbles wrote: Or how about this explanation: Ryan has a family and lots of other distractions in his life... ...He comes back, finds out "OMG I screwed up on criminal versus civil" and makes a correction, qualifying it with a reference to Garcia's job at the Security Commission whatnot...
Now, if this were a published article in the NYtimes, then maybe an editor would have checked and caught every fallacy before it got published, but this is a blog.
padikiller responds: See... There are a few problems here, Thimbles
1. There is no such actual thing in Reality Land as a "Security Commission whatnot". This is a non-existent federal agency. A fiction of your own apologistic vision of Ryan's hypothetical state of mind. Ryan, being a former WSJ reporter in Reality Land, either knows that this mythological federal agency of yours isn't real, or should have known it
2.. "This is a blog"? Are you serious, Thimbles? In the context of paid reporters at the Columbia Journalism Review? You are equating cjr.org with breitbart.com? Seriously? If you are.. I'm with you. It's the Wild Wild West, but I'm surprised to find you willing to make such a concession. I doubt the "watchdogs" here would concur.
3. What does my attitude have to do with anything? What the difference does this make?
#34 Posted by padikiller, CJR on Tue 8 Mar 2011 at 10:55 PM
As a guy who's visited since this enterprise was called "Campaign Desk" - before it got rolled into the cjr website, I can say yes, I'm serious.
There are articles that get posted here and published in the CJR magazine, and there are blogs.
It's not controversial.
#35 Posted by Thimbles, CJR on Tue 8 Mar 2011 at 11:10 PM
Did you know Felix Salmon blogs here? Like Ryan?
http://www.cjr.org/the_audit/felix_salmon_is_the_columbia_j.php
Big whoopity deal.
#36 Posted by Thimbles, CJR on Tue 8 Mar 2011 at 11:13 PM
man, James, now I have to correct a comment about a correction made in a comment about a double correction? i'm just gonna hang it up for the week.
And yes, Padi. As Thimbles says, this is a blog. Which is why that first correction was of a question asking if I was right about the five-year statute of limitations. I wouldn't have done that in a news story, obviously.
That's not to excuse fact errors, especially the second one there. But the form is different. It's faster and there's less time and editing spent on each post. That's balanced by the fact that we can correct things immediately rather than wait two months for the next issue of the mag to come out.
#37 Posted by Ryan Chittum, CJR on Wed 9 Mar 2011 at 12:28 AM
Yeahh, ain't your week, Chittum, for sure. But, you know, thanks for hanging in there. As I said, I wasn't trying to pile on.
#38 Posted by James, CJR on Wed 9 Mar 2011 at 01:45 AM
So where are we?
What standards should the readers expect here?
According to CJR's Mission Statement, readers should expect the same standards here as they do in print...
"Both online and in print, Columbia Journalism Review is in conversation with a community of people who share a commitment to high journalistic standards in the U.S. and the world."
#39 Posted by padikiller, CJR on Wed 9 Mar 2011 at 10:43 AM