Protecting Those Responsible

Aug 19th, 2011

Well, this is bad. Carre Johnson reports for NPR:

"A staff member at the Securities and Exchange Commission has complained to Congress that thousands of investigative documents have been destroyed by the agency.

Longtime SEC staffer Darcy Flynn says some of those missing papers relate to huge investment banks under the spotlight for their role in the 2008 mortgage crisis.

Flynn is asking Congress to protect him from retaliation after blowing the whistle on document destruction that he says stretches back for 20 years. Some of the missing files involve early-stage inquiries the agency made into the workings of Goldman Sachs, Bank of America and Lehman Bros.

"The same big banks that delivered us the 2008 financial crisis," says Gary Aguirre, a lawyer in San Diego who brought Flynn's allegations to the attention of Congress.

Aguirre, a former SEC whistle-blower himself, is one of many people who are calling for more accountability on Wall Street and for more action from the SEC.

"I just think that when you've destroyed 9,000 files of investigations, it makes sweeping under the table a lot easier," he says."

One has to wonder whether there was a tone in Aguirre's voice of either fatalism or anger that doesn't wholly translate into print when he made that last remark.

It is worth noting that not one Republican in the 112th congress has recommended de-funding the SEC, much less "auditing" them. The Rs have, however, been fighting to prevent the reestablishment of regulations such as the "uptick rule," without which our markets have been on a rollercoaster for nearly two weeks.