Sunday, November 1, 2009

Still More Squiddery: The SEC's new Chief Enforcer.

When it comes to "Squiddery" , the activities of everyone's
favorite financial cephalopod Goldman Sachs, it seems the
story never ends.

Two weeks ago Wall Street was set on its ear when the
SEC announced the appointment of the new Chief
Operating Officer of its Enforcement Division,
Adam Storch.

Now comes word that Mr. Storch will be the
"Managing Executive" of the entire SEC enforcement
division, reporting directly to Enforcement Chief Robert
Khuzami and SEC Head Mary Shapiro.

Wow - I'm impressed. Is Mr. Storch a former prosecutor?
Or a hyper-powerful securities lawyer doing some public
service? Or a veteran banking or securities regulator at
the peak of his career?

Well, no. Mr. Storch is 29 years old, a graduate of SUNY
Buffalo, with a bachelor's degree in accounting and
finance, and some graduate work (but not a degree)
from NYU's Stern School of Business. And, he's a CPA.

And his most important qualifications? He's a former
Vice President at Goldman Sachs. Prior to that, he had
been an audit junior at Deloitte and Touche.

Hmm. Seems a decent and clean young man. Just
right for a line examiner or auditor. If he keeps his
nose clean, might even become an examination senior.

The kind of young kid that if I were SEC Chief, I'd
hire five hundred more of , specifically for a general
investigation of all Squid activities.

But Chief Operating Officer of Enforcement?
Managing Executive? You've got to be kidding.

First of all, that position should require a law degree.
With 10+ years experience in either the U.S. Attorney's
Office, IRS Enforcement Division, NY Attorney General's
Office, or similar regulatory, enforcement, or prosecutorial

But that's not going to happen. And once you understand
Mr. Storch's role, you'll understand why.

His job is to be a minder. Specifically, to mind Mr.
Khuzami and Ms. Shapiro on behalf of his boss,
Chief Squid Lloyd Blankfein.

His job is to alert Chief Squid of any intention these
worthies might have of making any move against
Squid Central on issues such as HFT, dark pools,
front-running, scalping, naked shorting, inside trading,
squeezing, or any other activity that most of us might
regard as market manipulation.

In addition, his job is to make sure that The Squid's
franchise is protected. Self-dealing market manipulation
is The Squid's exclusive franchise - both Timmy at Treasury
and Bennie at the Fed said so. That means any poachers -
Galleon for example - need to be prosecuted to the fullest
extent of the law. We can't have unauthorized competition.

After all, what's good for The Squid is good for the
country - capece?

And you don't want to get into an argument with
Washington about that. That could be a career-limiting move.
So let's get along, go along, and do what Daddy Squid tells us.

And who knows, there just might be spots for you guys
at 85 Broad when this is all over, if you do as I say.

No comments:

Post a Comment