We mentioned this morning that Securities and Exchange Commission Chairman Mary Schapiro was in town speaking to business journalists gathered on the SMU campus. Turns out, during her speech she mentioned something that rings a bell: The failure of the Fort Worth office to shut down Allen Stanford's Ponzi scheme years before the feds finally took action. As you may recall, investors swindled by Pete Sessions's pal filed suit against the SEC only weeks ago in Dallas federal court. We'll get back to that in a second.
Anyway. Said Schapiro, who took the gig in late 2008: What we had here was a failure to communicate. Or, more specifically, the proverbial ball was dropped because of "escalating issues. It was about training our people. It's about how do you focus on what's important and what presents risks to investors, rather than what gets us numbers in the column of examinations done."
Now, back to that suit. With a tip of the cap to Bloomberg News, you'll find on the other side the SEC's motion to dismiss the litigation brought by those who blame the feds -- and, very specifically, Dallas attorney Spencer Barasch, a former SEC enforcement chief in Fort Worth who did some work for Stanford -- for allowing their money to go adios. It was filed yesterday at the Earle Cabell, and long story short, the SEC says, tough, that's the way investigations go:
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Federal securities laws give the SEC broad discretion in deciding whether to investigate possible violations and, when wrongdoing is suspected, take enforcement action. This discretion is subject to important policy considerations, including how to best use limited agency resources to enforce the nation's securities laws. The discretionary function exception therefore bars Plaintiffs' claims.