Drew Bowden

Three Former SEC Officials Write Letter to SEC Chief Mary Jo White Asking Her to Stop Protecting Corporate Cronyism

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In early 2013, before Mary Jo White was confirmed as the head of the Securities and Exchange Commission (SEC), I wrote a post predicting she would be a bankster codling fraud in the post, Meet Mary Jo White: The Next SEC Chief and a Guaranteed Wall Street Patsy. Here’s an excerpt:

Obama’s nominee to head the SEC, Mary Jo White, is just another gatekeeper appointed to make sure no one ever goes after the Wall Street crime syndicate.  As I have written about many times in the past, Obama does not nominate anyone to a high position of power in government who will not behave like a good little lapdog for Wall Street.

Despite Obama’s propagandist statement about how “you don’t want to mess with Mary Jo,” her background implies she will function as a useful servant to the financial oligarchs.  Forget for a second about that fact at her recent firm Debevoise & Plimpton LLP her clients included the usual suspects such as such as JPMorgan Chase & Co. (JPM), Morgan Stanley (MS), and UBS AG, but she is actually known as the prosecutor who popularized the “slap Wall Street on the wrist” approach.

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Caught on Tape – SEC Director Grovels for a Private Equity Job for His Teenage Son While Speaking on Panel

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The following video clip will make you extremely sick to your stomach. Not that we didn’t already know the U.S. economy is nothing more than a rigged oligarch shell of its former self, but to see SEC Director of the Office of Compliance Inspections and Examinations, Andrew Bowden, grovel for a job for his son in front of a private equity industry audience certainly represents a new low.

If you recall, Andrew Bowden was first brought to your attention last year in the post, SEC Official Claims Over 50% of Private Equity Audits Reveal Criminal Behavior, which discussed how Mr. Bowden admitted in a talk that “more than 50 percent of private equity firms it has audited have engaged in serious infractions of securities laws.” This sort of honesty is never rewarded within a crony, corrupt economic system that depends so heavily on regulatory capture for riches. As such, he quickly recognized the gravity of his error, and has since decided to get on his hands and knees and pucker up to the private equity industry whenever possible.

Nowhere was this more apparent than at a recent event at Stanford Law School, where Mr. Bowden ended his resounding endorsement of the private equity industry by begging the audience to one day give his son a job. At this point the audience burst into laughter and someone can be clearly heard yelling “I would love to hire your son by the way.” More laughter.

The joke’s on us.

Watch the video below:

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New Jersey’s Debt is Downgraded by Fitch as Chris Christie Funnels Pension Money to Private Equity and Hedge Funds

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Screen Shot 2014-09-08 at 2.25.48 PMDavid Sirota must be commended for his incredible work this year exposing the insidious relationship between public pension funds and “alternative asset managers,” namely private equity firms and hedge funds. It is the private equity component that has captured my attention the most due to the industry’s notoriously opaque and seemingly illegal fees.

One example I highlighted earlier this year was: Leaked Documents Show How Blackstone Fleeces Taxpayers via Public Pension Funds. The reason this relationship between public pension money and private equity is so incredibly important is because so many in the private equity world are so incredibly shady. Let’s not forget what SEC official Drew Bowden said back in May:

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SEC Official Claims Over 50% of Private Equity Audits Reveal Criminal Behavior

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Last week, Yves Smith of Naked Capitalism penned a fantastic piece leveraging a talk by SEC official Drew Bowden. Mr. Bowden heads the SEC’s examinations unit, and at a private equity conference he explained that “more than 50 percent of private equity firms it has audited have engaged in serious infractions of securities laws.” What is so incredible about the talk, is that while Bowden goes into details of shady practice after shady practice, he ultimately admits that the SEC isn’t being particularly aggressive with the private equity industry because “we believe that most people in the industry are trying to do the right thing, to help their clients, to grow their business, and to provide for their owners and employees.”

Yes, go ahead and read that again. The industry regulator is assuming that private equity firms are trying to do the right thing, despite the fact that audits demonstrated to a tune of greater than 50% the opposite to be true.

Private equity managers are some of the savviest people in finance and they know exactly what they are doing. What the SEC is basically admitting, is that private equity firms are also “too big to regulate” and, of course, “too big to jail.” After all, every single person at the SEC is likely angling for a big payday at a PE firm via the revolving door. Of course they aren’t going to regulate.

Meanwhile, if you are just an average citizen, you will be prosecuted to the fullest extent of the law if you commit even the most minor infraction. This sort of behavior led to the death of prodigy Aaron Swartz, the incarceration of political prisoner Barrett Brown, a swat team raid on a young kid in Peroia, Illinois for a parody Twitter account, the firing of a constriction worker for not paying for a $0.89 soda refill. This list goes on and on. Yet private equity crimes, which likely run into the billions collectively, are treated with kid gloves. As I have maintained many times before, this is how the social fabric of a society dies.

From Naked Capitalism:

At a private equity conference this week, Drew Bowden, a senior SEC official, told private equity fund managers and their investors in considerable detail about how the agency had found widespread stealing and other serious infractions in its audits of private equity firms.

In the years that I’ve been reading speeches from regulators, I’ve never seen anything remotely like Bowden’s talk. I’ve embedded it at the end of this post and strongly encourage you to read it in full.

Despite the at times disconcertingly polite tone, the SEC has now announced that more than 50 percent of private equity firms it has audited have engaged in serious infractions of securities laws. These abuses were detected thanks to to Dodd Frank. Private equity general partners had been unregulated until early 2012, when they were required to SEC regulation as investment advisers.

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