Judging by all the complaints about the Dodd-Frank Act, you might think that Washington over reacted to the financial excesses of a few years ago and that the Feds can now ease up on Wall Street.
In fact, though, bad behavior among America's money men -- and yes, those doing wrong are typically men -- continues onward at a furious pace. Consider just the past month at the SEC:
- On September 19, the SEC charged an Atlanta-based financial advisor, Angelo A. Alleca, with a Ponzi-like scheme that ripped off 200 investors to the tune of $17 million.
- On September 20, the SEC announced action against three insider traders in two separate cases.
- On September 24, the SEC charged Tyco with bribing foreign officials and fined the company $26 million.
- On September 27, the SEC charged Goldman Sachs and former executive at the firm with “pay-to-play” violations involving campaign contributions to then-Massachusetts state treasurer Timothy P. Cahill.
- That same day, the SEC brought another insider trading case against an investment bank analyst.
- On September 28, the SEC charged a financial executive in Minnesota with using investor money as a piggy bank for personal expenses.
- On October 3, the SEC "obtained an emergency court order to freeze the assets of a South Florida man who has been charged with fraudulently offering investments in oil drilling projects." This scam artist was a repeat offender, operating under an assumed name after a previous SEC fraud action against him.
- Also on October 3, the SEC charged two hedge fund managers with misleading and defrauding investors, including one, Hausmann-Alain Banet, who "stole more than a half-million dollars from a retired schoolteacher who thought she was investing her retirement savings in Banet’s hedge fund." The SEC's press release on this case noted: "Since the beginning of 2010, the SEC has filed more than 100 cases involving hedge fund malfeasance such as misusing investor assets, lying about investment strategy or performance, charging excessive fees, or hiding conflicts of interest."
- Two days later, on October 5, the SEC "charged four brokers who formerly worked on the cash desk at a New York-based broker-dealer with illegally overcharging customers $18.7 million by using hidden markups and markdowns and secretly keeping portions of profitable customer trades."
- On October 17, the SEC charged a "hedge fund advisory firm and two executives with scheming to overvalue assets under management and exaggerate the reported returns of hedge funds they managed in order to hide losses and increase the fees collected from investors."
If you scroll back through the SEC's press release archive for the past year, you'll see that the past month was pretty typical for the agency.
And this is just the SEC. Washington's other top watchdog of the financial world, the Commodities Future Trading Commission, has also been busy. Earlier this month, the CFTC announced that it had:
filed 102 enforcement cases in fiscal year 2012 (FY 12). During the past two fiscal years, the Commission filed a total of 201 enforcement actions, representing a significant increase from past years. The Division of Enforcement (Division) also opened more than 350 new investigations in FY 12, among the highest annual count of new investigations in program history. In addition, the Division obtained orders imposing more than $585 million in sanctions, including orders imposing more than $416 million in civil monetary penalties and directing the payment of more than $169 million in restitution and disgorgement.
So, no, the financial sector hasn't been cleaned up. Not by a long shot.
And what's really scary about the record above is that it doesn't include all the frauds that are going undetected or are beyond the resources of the Feds to pursue. The watchdogs may be busy, but with more capacity, they could be even busier.
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