SEC staff watched porn as economy crashed; Senate panel: Ratings agencies rolled over for Wall Street; SEC Ignored Stanford Ponzi Scheme For 12 Years

What was the SEC doing when Bernie Madoff was stealing billions and the economy crashed? Here are a few reports.

SEC staffers watched porn as economy crashed

CNN is reporting SEC staffers watched porn as economy crashed

“During the past five years, the SEC OIG (Office of Inspector General) substantiated that 33 SEC employees and or contractors violated Commission rules and policies, as well as the government-wide Standards of Ethical Conduct, by viewing pornographic, sexually explicit or sexually suggestive images using government computer resources and official time,” said a summary of the investigation by the inspector general’s office.

More than half of the workers made between $99,000 and $223,000. All the cases took place over the past five years.

A regional office staff accountant tried to access pornographic websites nearly 1,800 times, using her SEC laptop during a two-week period. She also had about 600 pornographic images saved on her laptop hard drive.

Separately, a senior attorney at SEC headquarters admitted to downloading pornography up to eight hours a day, according to the investigation.

“In fact, this attorney downloaded so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office,” the inspector general’s report said.

SEC Knew About and Ignored Stanford Ponzi Scheme

Please consider IG report: SEC knew of Stanford scheme since 1997.

The Securities and Exchange Commission knew since 1997 that R. Allen Stanford likely was operating a Ponzi scheme but waited 12 years to bring fraud charges against the billionaire, the agency inspector general said Friday.

An SEC enforcement official who helped quash investigations of Stanford’s business later legally represented him, according to a new report by the agency watchdog.

The SEC didn’t bring charges against Stanford until February 2009, when it alleged a $7 billion fraud. SEC Inspector General David Kotz said in the report that “institutional influence” in the enforcement division was a factor in the agency’s repeated decisions not to conduct a full investigation.

The IG’s office did find evidence, however, that “institutional influence” within the enforcement division contributed to the repeated decisions not to conduct a thorough investigation of Stanford, the report says. Senior agency officials in the Fort Worth office believed they were being judged on the number of cases they brought, and told their enforcement staff that novel or complex cases — as opposed to “quick-hit” cases — were discouraged, the IG’s inquiry found.

The findings were the latest in a string of black eyes for the SEC, following a series of reports issued by Kotz’s office last year that chronicled in detail how the agency bungled five investigations of financier Bernard Madoff’s business between June 1992 and December 2008. Madoff’s multibillion-dollar fraud, which could be the biggest Ponzi scheme in history, destroyed thousands of people’s life savings, wrecked charities and jolted investor confidence during the worst days of the financial crisis.

The SEC’s civil fraud charges filed last year against Stanford accused the brash billionaire, a larger-than-life figure in the Caribbean, of luring investors with promises of improbable high returns on the CDs and other investments.

Last June, Stanford was indicted and jailed on Justice Department charges that his international banking empire was really a pyramid scheme built on lies, bluster and bribery. Stanford is disputing the charges, which in the criminal case could send him to prison for up to 250 years if convicted.

The new IG report was in sharp contrast to one issued on Kotz last July, which found that the SEC had fulfilled its duty to pursue alleged wrongdoing by Stanford. The SEC’s decision to halt its investigation of Stanford in April 2008 came in response to a request by the Justice Department, and the agency didn’t breach its obligation, the earlier report found.

Ratings agencies rolled over for Wall Street

Inquiring minds are reading Senate panel: Ratings agencies rolled over for Wall Street

A Senate panel investigating the causes of the nation’s financial crisis on Thursday unveiled evidence that credit-ratings agencies knowingly gave inflated ratings to complex deals backed by shaky U.S. mortgages in exchange for lucrative fees.

The Senate Permanent Subcommittee on Investigations will hold a detailed hearing on Friday, where its chairman, Sen. Carl Levin, D-Mich., will introduce e-mail records in which executives from Standard & Poor’s and Moody’s Investors Service acknowledge compromising the integrity of ratings to win business from big Wall Street firms