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May 7, 2015 By Richard Bowen

The SEC Bites Like a Flea!

The SEC Bites Like a Flea!

According to Gary Aguirre, the SEC Whistleblower, “when you’re talking to people and asking them to change their culture, you might as well be talking to a piece of granite and asking it to transform itself into a piece of sculpture.”

Aguirre spoke recently at the Institute for Excellence in Corporate Governance at the University of Texas at Dallas, where I teach. We compared notes about the parallels between his “five year war” against the SEC and mine. And the toxic environment we were both in.

According to Aguirre, and I concur, the SEC which is supposed to have control over financial institutions has instead been captured by the very ones they are supposed to be regulating. They are very lenient on those they are supposed to control and the banks have a stranglehold on Congress as well as the regulatory agencies. We agreed the situation is out of control.

Gary, an attorney was practicing in San Diego.  In 2000 he went back to law school and after earning his second law degree applied for and received a public service job with the SEC, where he became the lead investigator on an insider trading case involving Pequot Capital Management. While he saw continued abuses, there had not been a case against insider trading in 25 years!

Aguirre went after this case and thought there was a good chance of  getting a conviction. Suspecting the leaked information came from John J. Mack, a Wall Street titan and major contributor to the 2004 campaign of President George W. Bush, Aguirre wanted to subpoena Mack, but supervisors told him Mack had too much “political clout” and the case would not be pursued. The case was postponed.

Aguirre complained to a superior about the preferential treatment being given Mack and was fired without warning. A Senate investigation later found his termination to have been an illegal reprisal.

In May 2010, Pequot Capital settled its insider trading charges with the SEC for $28 million and a month later, the SEC settled the wrongful termination suit filed by Aguirre for $755,000. Aguirre returned to private practice in San Diego in 2008, specializing in securities law. He has emerged as a major critic of the SEC, calling it an agency that was set up to protect the public from Wall Street, but now protects Wall Street from the public.

In 1934, when FDR signed the SEC Act, FDR asked what kind of law this will be? Legend has it that he was told, “It will be a good bill or bad, Mr. President, depending on the men who administer it.” It turns out it is no law at all.

[tweetthis twitter_handles=”@RichardMBowen”]The inmates (SEC) are running the institution.[/tweetthis]

According to Aguirre, the media describes the SEC as Wall Street’s Cop, but the truth is, “the SEC roars like a lion and bites like a flea” – a quote he attributed to Harry Markopolous, a financial fraud investigator who blew the whistle on Bernie Madoff’s ponzi scheme.

On that he is spot on. The inmates are running the institution.

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Tagged With: Gary Aguirre

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Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

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"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
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"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
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"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
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Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

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Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

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