Elizabeth Warren is working: GAO Investigations

The U.S. Government Accountability Office plans to scrutinize changes at the U.S. Securities and Exchange Commission, including any led by the White House or Elon Musk's Department of Government Efficiency, according to a letter sent to Democratic lawmakers on Capitol Hill. The GAO, Congress' nonpartisan research arm, told Sens. Elizabeth Warren and Mark Warner it will review the SEC's recent efforts to cut staff, end leases and consolidate its work.

  MSN

We'll see how far they get.  Who's in charge at the GAO?

The SEC has undergone big changes since President Donald Trump took office and Republicans took over the agency, scrapping high-profile cases, reorganizing staff and reining in enforcement staff's ability to kick off formal probes.

[...]

The SEC's budget is set by Congress, but the funding comes from transaction fees imposed on the financial sector and not taxpayer dollars, according to the agency.

[...]

The commission is also facing an exodus, with hundreds of staff taking resignation offers.

So, the "investigation" could take years, right?

The top watchdog agency on Capitol Hill said Tuesday that it will investigate Trump administration cuts to a key program at the U.S. Department of Housing and Urban Development.

[...]

Warren was joined on the request by fellow Democratic U.S. Sens. Alex Padilla, of California, Rapahel Warnock, of Georgia, Tina Smith, of Minnesota, and Cory Booker, of New Jersey.

[...]

The U.S. Government Accountability Office’s investigation into cuts to cuts to fair housing enforcement at HUD came at the request of a group of lawmakers led by U.S. Sen. Elizabeth Warren, D-Mass.

[...]

Plans by Musk and Trump to “cut 80% of HUD’s fair housing staff would harm families across the country who have experienced housing discrimination, whether it be a landlord refusing to make repairs to accommodate someone’s disability, or a Black family whose home is being appraised lower than it should. I look forward to closely following the results of GAO’s investigation,” Warren [said].

[...]

In a March 28 letter, the watchdog office confirmed that the request was “within the scope of its authority,” and that “staff with the required skills will be available shortly to initiate an engagement.”

  Mass Live

"Shortly".

Crypto unleashed

 

Unleashing money laundering as well.  Crypto is the favored currency for illegal transactions, and the Trump grift.  And President Musk.

The idiot who bought the banana for $6.2 million.

Justin Sun’s involvement here takes this beyond the realm of mere amusement and into something potentially far more insidious: a yearslong saga of alleged activities like abusing employees, skimping out on international law, evading transparency requirements, and plagiarizing white papers, along with reports of government investigations, and sucking up to President-elect Donald Trump for the sake of rewiring American financial regulation as we know it.* It’s a literal pay-for-play, with Sun announcing just one day after the banana stunt that he would invest $30 million in Trump’s crypto scheme, World Liberty Financial, and bail it out of financial insolvency, earning an advisory role with the firm in the process.

[...]

There are many reasons why Justin Sun is so notorious within the crypto world, even though he remained mostly unknown to the wider public before now. So let’s break down why this whole thing stinks … kinda like a rotting banana.

So, what’s Justin Sun’s whole deal?

  Slate

Continue reading.

Santos saga continues: financial crime?

A month after the Securities and Exchange Commission filed a lawsuit in 2021 accusing a Florida-based company of operating a Ponzi scheme, one of the firm’s account managers assured an anxious client that his money was safe.

The client, a wealthy investor named Andrew Intrater, had been lured by annual returns of 16 percent and had invested $625,000 in a fund offered by the company, Harbor City Capital — in part because he trusted and admired the account manager, an aspiring politician named George Santos.

[...]

The letter of credit did not exist, the S.E.C. would later tell a court. The $100 million that Mr. Santos told Mr. Intrater that he had personally raised for Harbor City did not exist either, the commission said. Nor, seemingly, did the close to $4 million that Mr. Santos claimed he and his family had invested in Harbor City.

Mr. Santos’s representations form the basis of a sworn declaration that Mr. Intrater gave the S.E.C. in May 2022, as part of its Harbor City investigation.

[...]

Mr. Intrater told the S.E.C. that the representations influenced his decision to invest in Mr. Santos’s business and political endeavors — an allegation that could leave Mr. Santos vulnerable to criminal charges.

[...]

He shared with The New York Times text messages that he exchanged with Mr. Santos, as well as documents and the declaration that he had given to the S.E.C. — all outlining the ways in which he said Mr. Santos had misled him.

[...]

Although Mr. Santos claimed to have raised $100 million for Harbor City, S.E.C. documents say the firm had only raised a total of $17 million. And while Mr. Santos said that he and his family had invested millions of dollars because of Harbor City, financial disclosures filed during his 2020 run for Congress show that he earned just $55,000 that year, and had no assets.

[...]

According to court documents filed by the S.E.C., Harbor City told investors that it had discovered a way to make guaranteed money by investing in digital marketing and advertising.

But Harbor City was not doing any such investing, and only a small part of the $17 million it raised was used for legitimate business expenses, the government claims. The company, according to civil charges filed by the S.E.C., was instead engaged in a Ponzi scheme, using investments from new clients to make payments to older investors.

[...]

Mr. Intrater became one of Mr. Santos’s more generous patrons. In addition to his investments in Harbor City funds, first reported by The Washington Post, he donated more than $200,000 to Mr. Santos’s election campaign, associated political committees and a New York PAC that he would later learn was controlled by Mr. Santos’s sister.

[...]

Mr. Santos, who was not named in the S.E.C. suit, has publicly said he had no knowledge of wrongdoing at Harbor City.

[...]

Mr. Intrater is a private equity investor perhaps best known for his financial ties to Viktor Vekselberg, his cousin. Mr. Vekselberg is a Russian oligarch whose U.S. assets were frozen in 2018 by the Treasury Department because of his ties to the Kremlin.

[...]

Mr. Intrater is also known for his relationship with Michael D. Cohen, Donald J. Trump’s onetime personal lawyer; Mr. Intrater’s firm, Columbus Nova, signed Mr. Cohen to a $1 million consulting contract when the businessman was looking for new investment opportunities in 2018.

  NYT

I think you can judge the legitimacy of Mr. Intrater's activities themeselves by the connections he has to well-known shady characters.

...but hey, do what you want...you will anyway.

SEC ruling

The Securities and Exchange Commission was created as part of Franklin Roosevelt's New Deal program to protect investors and maintain fair markets.  Not that it always does the best job, but the GOP doesn't want it regulating or prosecuting anything.

[GOP] advocates of limiting government’s size have a traffic cop theory of the state, featuring a minimalist state focused on safety and security.

Many believe that government is at best superfluous and at worst a drag on a free market. It has long been their aim to cut taxes to “starve the beast.”

Grover Norquist, who founded Americans for Tax Reform in 1985 at the urging of President Reagan, declared in 2001: “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”

  The Conversation

...but hey, do what you want...you will anyway.

Aaaaaaaaaaand...another failure

Oooops.

How to fire Mueller? Change the rules.

The Supreme Court is set to hear a seemingly minor case later this month on the status of administrative judges at the Securities and Exchange Commission, an issue that normally might only draw the interest of those accused of stock fraud.

But the dispute turns on the president's power to hire and fire officials throughout the government.

[...]

Trump's Solicitor Gen. Noel Francisco intervened in the SEC case to urge the high court to clarify the president's constitutional power to fire all "officers of the United States" who "exercise significant authority" under the law.

"The Constitution gives the president what the framers saw as the traditional means of ensuring accountability: the power to oversee executive officers through removal," he wrote in Lucia vs. SEC. "The president is accordingly authorized under our constitutional system to remove all principal officers, as well as all 'inferior officers' he has appointed."

  LA Times

I think we all know who the inferior officer is here.

The justices said they would focus only on how the SEC in-house judges are appointed. But Francisco is asking them to go further and rule on the "removal" issue.

[...]

In addition to representing the administration before the Supreme Court, Francisco, a former law clerk for the late Justice Antonin Scalia, could be in line to oversee the Mueller inquiry if Deputy Atty. Gen. Rod Rosenstein is fired.

[...]

Francisco points to two provisions of the Constitution as giving the president very broad authority. One says the president shall appoint ambassadors, judges and "all other officers of United States." The other says the president "shall take care that the laws be faithfully executed."

[...]

Francisco's defense of broad presidential power is likely to win favor with Chief Justice John G. Roberts Jr. and the court's other conservatives. In 2010, Roberts spoke for a 5-4 majority that struck down a provision in the Sarbanes-Oxley Act, which created an independent public accounting board at the SEC whose members could be fired only for "good cause."

Roberts said shielding these "officers of the United States" from presidential control was unconstitutional.

[...]

On Friday the court agreed to Francisco's request to participate in the April 23 argument so he can advocate for a ruling on the president's removal power.

I'd like to put a question to those justices - in particular, Justice Roberts. Are they themselves considered "officers of the United States" and, if so, how do they feel about any future president having the power to fire them at will?

...but hey, do what you want...you will anyway.

Isn't that called insider trading?

And isn't it illegal?

In a little-noticed SEC filing submitted on February 22, 2018, [billionaire investor and longtime Trump confidant Carl] Icahn disclosed that he systematically sold off nearly 1 million shares of Manitowoc Company Inc. Manitowoc is a “is a leading global manufacturer of cranes and lifting solutions” and, therefore, heavily dependent on steel to make its products.

The filing came just seven days before a White House event where Trump announced his intention of imposing a 25 percent tariff on steel imports.

[...]

Before February, Icahn was not actively trading Manitowoc stock. According to regulatory filings, he did not buy or sell any shares of Manitowoc between January 17, 2015 and February 11, 2018.

[...]

Manitowoc stock plunged, losing about 6 percent of its value. [...] As of 10:20 a.m. Friday, the stock had lost an additional 6 percent.

[...]

Icahn, a billionaire investor with far-flung holdings, is a close associate of Trump — who invoked Icahn’s name repeatedly on the campaign trail. Once in office, Trump installed Icahn as a “special adviser,” although Icahn did not not unwind his business entanglements before accepting the position.

Icahn resigned in August, in advance of a New Yorker article which detailed how he used his position in the White House and his connection to Trump to protect his investments.

[...]

In an interview on CNBC on Thursday, Icahn appeared to acknowledge at least occasional ongoing conversations with Trump, saying the two had not had “much” interaction in the last four to five months.

  Think Progress

He may have resigned, but he's obviously still using his relationship for the same purpose.

...but hey, do what you want...you will anyway.

Deconstructing America - Part whatever

Of course they have.

From February through September, the agency, now headed by Wall Street lawyer Jay Clayton, collected $127 million in corporate civil penalties in 15 cases, according to a POLITICO review of SEC data. That compares with $702 million in 43 cases from February through September 2016.

  Politico

What a boon to Wall Street.

...but hey, do what you want...you will anyway.

Draining the Swamp - Part Whatever

Jay Clayton, Donald Trump's choice to head the SEC, is slated to appear before the Senate Banking Committee Thursday. In that hearing, he may be asked about some pointed questions about his personal holdings.

Clayton is already an unusual choice, given that he's slated to be a primary regulator of Wall Street while a chunk of his family income will continue to come from Goldman Sachs, where his wife Gretchen works.

  Matt Taibbi

Actually, as Republican administrations go, that's a typical choice, not an unusual one.

Although he will have to recuse himself from enforcement cases involving Goldman, he will not have to sit out of a broad range of other regulatory decisions that affect the company.

[...]

In Clayton's absurdly baroque Form 278 financial disclosure – if you want to feel like your financial life is meager and uncomplicated, take a look at this staggeringly long list of income sources for the former Sullivan and Cromwell mainstay – he lists, under "other assets and income," a series of entries involving a company called WMB Holdings.

[...]

But WMB, and a company called CSC – with which it appears to have a connection – is a company of a very particular type, known well to white-collar investigators.

"It's a corporate formation company," says Jack Blum, an expert on white-collar crime and money laundering who is best known for his investigation of the BCCI scandal. "You call them up, and 20 minutes later you've got a Delaware corporation. I'm exaggerating, of course, but that's what they do."

[...]

The worst-case scenario is a string of shell companies that end in an opaque offshore haven. "That's when the trail becomes impossible to follow," says Blum. Investigators who try to follow money into offshore banking havens have almost no hope of getting answers there, he says.

[...]

"If you want to launder money, evade tax or hide assets from a spouse, you can do it."

Clayton's family seems to have a serious interest in this firm. He lists a series of family trusts containing WMB holdings, most producing high annual dividends.

[...]

The endnote claims Clayton has no beneficial interest or control in these holdings, but that his wife and/or children have a "beneficial interest."

And surely he can't benefit from his wife's or his children's benefits.

Even if WMB and CSC are completely above-board, it's a strange sort of investment for the top cop on the financial beat. It will be interesting to see if he sheds some light on his holdings when he's questioned this week.

...but hey, do what you want...you will anyway.

Even Drudge?

Draining the Swamp

Trump picking as SEC chief someone who once represented Goldman, Sachs may be the least surprising story of 2017: https://t.co/a7F7x2zAEp

— Matt Taibbi (@mtaibbi) January 4, 2017

...but hey, do what you want...you will anyway.