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Congressman Gary Ackerman Beats Down the SEC


During hearings on the Bernie Madoff scandal today, Gary Ackerman unleashed on the members of the SEC for failing to protect investors and detect fraud.

Barked Ackerman: "You couldn't find your backside with two hands if the lights were on!"

Watch it, AFTER THE JUMP...

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  1. good on ackerman. we need more staight-talking pols.

    Posted by: nic | Feb 5, 2009 6:20:16 PM

  2. Like most regulatory agencies, the SEC relies heavily on self-reporting to spot abuse. That is, the companies have to file reports and submit them to the SEC, which then files them away until someone opens a case file against the company (due to an outsider raising a red flag with evidence, for example). In the Madoff case, the case file was never opened despite the raising of red flags. The likely reason is that Madoff was too influential and powerful for anyone to make a credible claim that a case file should be opened. You just don't want your hands on the hot potato when word comes down from on high to stop it. That, and no post-52 career on Wall St. in consulting if you attack potential future bosses.

    Posted by: anon | Feb 5, 2009 6:33:24 PM

  3. They should have asked me to their party - - I can find all kinds of backsides and frontsides with the lights off or on - and I don't need my hands to do it!!

    Posted by: David B. | Feb 5, 2009 7:08:18 PM

  4. They should have asked me to their party - - I can find all kinds of backsides and frontsides with the lights off or on - and I don't need my hands to do it!!

    Posted by: David B. | Feb 5, 2009 7:08:28 PM

  5. They should have asked me to their party - - I can find all kinds of backsides and frontsides with the lights off or on - and I don't need my hands to do it!!

    Posted by: David B. | Feb 5, 2009 7:08:32 PM

  6. Great, except the good Congressman has apparently never heard the phrase "a day late and a dollar short." Congress has no basis for crowing or grand-standing. They sat on their hands just like everybody else while pricks like Madoff, Abramoff, etc gorged themselves. Congress has been AWOL on every major issue of the last decade. This latest financial scandal is no exception.

    Posted by: Clay | Feb 5, 2009 7:30:02 PM

  7. Once again, a congressman blaming everyone but themselves. Like Lieberman holding hearings on Enron after he was the one on the banking committee who shot everything down to regulate them - Like the idiot, weird Barnie Frank acting like he had nothing to do with the meltdown. Read below from The hypocrisy is mind numbing, and why do NY and Mass produce such god awful politicians?

    It's far too easy to blame the SEC for the Bernie Madoff fiasco- or anything else. In fact, it's way too convenient. And, Rep. Gary Ackerman (D-N.Y.) yesterday blaming the SEC for undermining the confidence Americans have in the financial markets is outrageous.

    Mr. Ackerman, how dare you.

    It is the SEC's job to investigate and enforce- yet they do so under, and within, the laws and regulations set forth by Congress. Period.

    It is Congress that created FASB 157 "mark-to-market" accounting, which is primarily responsible for crashing the markets- and which led to the Republicans getting crushed in the elections. (And this is an entirely other sordid matter, which I call 'FASB-gate'. Republicans are you listening?)

    It is Congress that still does not insist on re-instating the "up-tick" rule - a rule that would not enable stock short-sellers to easily conduct bear raids on stocks and pound their stock prices into the pavement. This was also an important part of the market crash. In fact, it would even be a better idea to disallow shorting on the bid. And, with great foresight, the SEC has already published my idea on their website. It's been up there for almost 10 weeks. Have you Congressional lawmakers even seen it?

    It is Congress that has allowed generations of Wall Street executives and lobbyists to operate, unchecked, within a culture of greed and arrogance - arrogance that allowed the monolithic investment firms to gamble with the taxpayers' money and lose billions due to incompetent trading and reckless investment decisions- only to then have these same firms come running back to the same taxpayers to be bailed out- and using their insider proxies on the Hill to do so.

    It is Congress that, to this day, has never provided the SEC with sufficient funding and manpower to be able to effectively investigate and enforce the markets.

    It is Congress that set up the rules for the mortgage market- and let their own mortgage children, Fannie Mae (FNM) and Freddie Mac (FRE), wield havoc within the mortgage industry right under their noses.

    It is Congress that let hedge funds run wild, manipulating every market on the planet. And continue to do so.

    It is Congress that failed to regulate the un-Godly dark world of the derivatives market.

    It is Congress that seems to only tackle any or all of the above once it becomes politically-correct to placate their tax-paying constituents- and only seems to even begin making a legitimate attempt at it- if there is a "TV-op" attached in the process.

    And, it is Congress which loves to grand-stand on national television before taxpayers and levy blame on everyone but themselves for what is wrong.

    I feel sorry for the SEC. All these years, they have done the best they can with what they've had to work with. They've been strangled all the way.

    Just once I'd love to see Congressional representatives sitting where the SEC was sitting today and grilled repeatedly for all of the incompetent 'ambulance-chasing'-style law-making they have effected- and continue to do.

    This great country is great despite Congress. And can be greater, if just once, Congress could act before a crisis occurs- and not only after a crisis occurs.

    Congress: instead of pointing fingers at everyone else- investigate and enforce yourselves.

    The taxpayers demand it.

    Posted by: Anon | Feb 5, 2009 8:31:16 PM

  8. Most people do not realize this, but most wall street traders are buying/selling to just make a quick short-term profit and generating commissions for these sales.

    Most people don't know that if you rely on commissions to pay for your BMW's and Jaguars and the Megamansions, you'll do anything to lie and cheat to get where they are.

    Most people don't realize that most stocks/bonds you hold will give you a reward (based on dividends, short-term and long-term gains) based on how long you hold these funds. But instead everyone is looking for a quick way to get a profit to feed their crack-addicted lives.

    Most people don't think of investing for the long haul and that's probably why we are in this mess. Can't always blame it on congress, yes, they should have had tougher regulations, but it is the push by Wall Street bigwigs to get their traders to run up commissions that we taxpayers have to pay in fees.

    It's really that simple...

    Posted by: Scott in Philly | Feb 6, 2009 9:18:12 AM

  9. so, in the end, tell your Wall Street friends to stop buying/selling based on their moods or the latest fads or rumors that a company is a hot "buy" or that Steve Jobs has died three times. It doesn't help us other investors who's been saving for years in their 401k's, IRA's, 403b's, etc; all to lose their money because of the greed on the trading floor.

    Please, just tell them to think and improve the mess we are in.

    Posted by: Scott in Philly | Feb 6, 2009 9:26:20 AM

  10. Yes I agree that Congress, ESPECIALLY the GOP who explode like daylighted vampires at the thought of regulation, bear responsibility, but the truth is, something SO TRANSPARENTLY BAD as Madoff's deals, shoved in the SEC's faces by the whistleblower did not move them to investigate further. The leg-work had been done, they just needed to prove it. If they had an inkling (due to the heads up they had gotten), they could have gone to Congress for more funding if they needed it and you can bet they most likely would have gotten it.

    I don't feel sorry for the SEC, they failed in their task MISERABLY. They were supposed to bring this to Congress' attention and investigate it.

    The blind GREED that markets have been driven by here for so long, has finally brought the country to a cliff...

    That greed is what has finally, at painful cost to us all, hopefully been tamed.

    Posted by: CK | Feb 6, 2009 9:33:29 AM

  11. It is time for Americans to wake up and be !

    Posted by: John Brady | Feb 7, 2009 3:12:39 AM

  12. Why didn't the SEC follow up on tips about Madoff's operation and uncover his fraud? The fact that somebody was able to run such a large scheme for so long on a continual basis without somebody catching makes you wonderif Madoff was able to grease the squeaky wheels both within his own organization and out?

    If that is the case than the fraud as shocking and pervasive as it is already known to be is more pervasive and shocking than previously thought.

    Posted by: Dan D. | Feb 7, 2009 10:53:55 AM

  13. Congressman Gary Ackerman's good friends, the Zises Brothers, will sue near 200,000 Americans this year for credit card default using the trade name "Unifund" registered with the Ohio Secretary of State (The trademark documents are available on-line and free.) Since the trademark "Unifund" is owned by a partnership, Credit Card Receivables Fund and ZB Limited Partnership, proceed checks to "Unifund" can be deposited into an account at the Israeli Discount Bank (IDB) for ZB Limited Partnership and/or Credit Card Receivables Fund without being declared as income for Unifund CCR Partners (...hey State of Ohio, I think you will want your cut). My guess is that it is about a 90% skim for the past 25 years.
    The Zises Brothers doing this skim are the same Zises Brothers of Integrated Resources; a tax shelter scam that went bust some time ago. They are experts is avoiding income tax, and this scam is no different. In most states, Unifund is not registered with the Secretary of State as a tax paying business enterprise. That is because State code specifically excludes the filing of a collection lawsuit from the definition of “doing business". The legal theory goes along the lines that collection lawsuits are "loss mitigation" and not an inherently profit making enterprise. The IRS has similar rules that the Zises Brothers entities abuse to avoid declaring income.
    The Zises Brothers have applied this tax avoiding principle to a business they have where the principle activity is to sue for profit...HUGE profits. Unifund has a contract with Asta Funding dba Palisades Collections to sue people on behalf of Asta Funding for a percentage of the judgment. This contract is for the purchase of bad credit card debit from Citibank and is funded, in part, by the Israeli Discount Bank for nearly $900M. Copies of the contracts can be purchased on-line. Much of it is available in publicly traded Asta Funding quarterly statements. One of them specifically rewards Unifund with a 50% premium for collecting "outside the Statute of Limitations". Hey FBI, sounds like a violation of the RICO Act to me.
    Now, where does the money go after it gets to ZB Limited Partnership. Well, ZB Limited Partnership at 767 3rd ave NY, NY is registered with the Ohio Secretary of State as a Foreign Corporation (doc available on-line and free) out of Delaware. You can search the Delaware Secretary of State database for legal entities, and you will find scores of filings by the Zises Brothers, including ZB Limited Partnership and Credit Card Receivables Fund, Inc. You will have to pay a fee for a copy of the document. Anyway, ZB Limited Partnership is owned by ZB/CCR Corp. (another account at the IDB). By the way, 31% of the Israeli Discount Bank is owned by the Israeli Government, and has been fined $12M for failing to implement anti-money laundering regulations.
    The ZB/CCR Corp filing with the Delaware secretary of State has an interesting mailing address "C/O Forest Hill Capital, 800 Second Ave., New York, NY 10017". Forest Hill Capital is the old name for Family Management Corp (FMC), another IDB account; the same Zises Brothers company that manages the Congressman's money. So, now we know where the Unifund skim goes. But, this is where the trail gets very interesting.
    Numerous business databases, including Manta, have a company known as Associated Capital, L.P. or A Capital or ACAP at 767 3rd Avenue 16th Floor, NY, NY. That is the same address as ZB Limited Partnership in the Ohio trademark filing (first one). Associated Capital was the single biggest contributor to funds supporting activity against the recently enacted finical and banking reforms. Gary, what sweetheart amendments did you get to save Associated Capital for the Zises Brothers?
    It is a sure bet that the single biggest FMC investment is with Associated Capital. Does Associated Capital actually make any money? Or is it principal function to loose money, lots of money, for its clients (such as ZB/CCR Corp.)? If they loose so much, where does it all go? Let me shed a little light on the answer to this question:
    "This Schedule 13G is being filed jointly by Associated Capital, L.P., a Delaware limited
    partnership (”Associated”), its general partner, A Cap, Inc., a New York Corporation (”A Cap”), Jay H. Zises, the President and a director of A Cap, Selig A. Zises, Vice President, Treasurer and a director of A Cap, Nancy J. Frankel-Zises, a director, Vice President and Secretary and the sole stockholder of A Cap, and Associated Capital Offshore, L.P., a Cayman Islands limited partnership (”Associated Offshore”). Associated, A Cap, Jay H. Zises, Selig A. Zises, Nancy J. Frankel-Zises and Associated Offshore are hereinafter sometime referred to collectively as the
    “Reporting Persons”. The business address of Associated Offshore is c/o Goldman Sachs(Cayman) Trust, Limited, P.O. Box 896, George Town, Grand Cayman, Cayman Islands, British West Indies. The business address of each other Reporting Person is 477 Madison Avenue, 14th Floor, New York, New York, 10022. Jay H. Zises, Selig A. Zises and Nancy J. Frankel-Zises are each United States citizens."
    I find it very interesting that the Israeli Discount Bank on 5th avenue in New Youk has semi-autonomous branches in Zurich Switzerland, Uruguay, Brazil, Chile and the Cayman Islands. Congressman Gary Ackerman, did you "loose" any money with FMC?

    Posted by: kgfkfyfkkjg | Jul 25, 2010 11:45:54 PM

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